Quarterly Contributions

[JBones]

If a plan has unreduced assets in excess of the funding target, but the assets drop below the funding target when reduced by COB, is there a funding shortfall causing quarterly contributions to be required? 1.430(j) regulation says that there is a quarterly if there is a funding shortfall and defines funding shortfall using asset reductions under 1.430(f)-1©.

Example:

Plan Year is 2008 calendar with EOY val.

As of val date:

FT - $100,000

COB: $10,000

Assets: $105,000

Assets reduced under 1.430(f)-1©(1) would be $95,000 and there is a shortfall, but assets reduced under 1.430(f)-1©(2) would be $105,000 and there is no shortfall. Are quarterlies required for 2009?

[D Syrett]

My recollection is that the ratio is, from the prior year:

(assets less COB less PFB)/ FT.

So with your fact pattern, qrtlys would be required for 09.

[Mike Preston]

Yes.

[Andy the Actuary]

Congress's punishment for maintaining credit balances.