section 404 assets

[Draper55]

Am i correct in thinking that under PPA valuations, assets for section 404 purposes are

always the same as section 430 assets. In other words ,we adjust for contributions made

for the current plan year prior to the valuation date at the effective rate,but there is

no adjustment for contributons made during prior plan years but not previously deducted?

[Andy the Actuary]

Wouldn't 404 assets still be reduced to reflect contributions made but not deducted? If you don't do this, such contributions might never become deductible.

Also, question of how to treat accrued contributions -- i.e., whether or not these should be discounted.

Perhaps, these questions are addressed elsewhere.

[Draper55]

Andy,

prior to the pension protection act, the assets under

404 were adjusted per the 404 regulations for

various purposes one of which was the full funding limitation

under section 412. since the full funding limitaion under 412

does not exist do we automatically apply this construct

to the PPA'06 maximum. I guess it makes sense to allow

them to be deducted currently, but whether they should grow

at the effective rate or the asset return rate is unclear i think.

fortunately i only have one such case.

[Andy the Actuary]

The new 404 employs a definition of FFL under a new 431, which appears to apply only to multi-employer plans.

[Blinky the 3-eyed Fish]

Since 404(o) references assets determined under 430(g)(3), I would be very hesitant to reduce those assets by nondeductible contributions until futher guidance comes out.