2009 AFTAPs

[dmb]

I'm just trying to get an idea of what people are doing with regards to certifying 2009 AFTAPS for calendar year plans in the absence of final regulations. Are they being certified and if so on what basis??? Thanks.

[david rigby]

I'm using the proposed regulations. What are you using?

[dmb]

I'm using the proposed regulations. What are you using?

We've been holding off on certifying in hopes of getting funding relief in the form of automatic approval for changes in funding elections from 2009 to 2010 plan years, specifically the interest rate basis.

We are certifying AFTAPs for plans that will be at least 80% under either the seg rates or the full yield curve and if we have to we will recertify later since it won't be a material change. For plans that are over 80% on the FYC and below on the seg rates we have not issued AFTAPs yet.

So if you have certified AFTAPS that are less than 80% based on segment rates and the final regs give automic approval as mentioned above will you be changing your 2009 funding elections and/or AFTAP certification???

[Guest naveen]

Plans not having a certified 2009 AFTAP after 09/30/2009 will result in an AFTAP of less than 60% and the associated benefit restrictions and notices to participants.

[dmb]

Plans not having a certified 2009 AFTAP after 09/30/2009 will result in an AFTAP of less than 60% and the associated benefit restrictions and notices to participants.

I understand that, thanks. My issue is that under the proposed regs i would probably recommend that most of my clients go with one of the segment rates to reduce volatility in the itnerest rate basis and if they do that many of them will be facing benefit restrictions due to an AFTAP of less than 80%. I am then wondering what will happen if the final regs are issued with the provision that employers may change interest rate basis for the 2010 year. I would have then recommended going with the October spot rates for the 2009 valuation and those plans would have no benefit restrictions. I'm wondering if there will be an allowance to recertify even if it resulted in a material change in the AFTAP or if the AFTAP deadline might be extended. I am prepared to issue AFTAPs but am waiting as long as i can (up to 9/30) in hopes the final regs are issued sooner rather than later.