Andy the Actuary Posted April 20, 2010 Posted April 20, 2010 FT (2008) = $15,000,000 AVA (2008) = $14,000,000 MRC (2008) = $2,000,000 No COB So, projected quarterly contribution of $500,000 required in 2009 Plan frozen 12/31/2008 FT (2009)= $16,000,000 AVA (2009)=$17,000,000 PFB (2009)=$0 No quarterly contributions (of $500,000) made 4/15/2009 or 7/15/2009 In August 2009, determined FT and that MRC (2009) =0 Conclusion is no problem as far as late 2009 contributions since 90% of nada is nada. Any disagreement??? The material provided and the opinions expressed in this post are for general informational purposes only and should not be used or relied upon as the basis for any action or inaction. You should obtain appropriate tax, legal, or other professional advice.
dmb Posted April 20, 2010 Posted April 20, 2010 FT (2008) = $15,000,000AVA (2008) = $14,000,000 MRC (2008) = $2,000,000 No COB So, projected quarterly contribution of $500,000 required in 2009 Plan frozen 12/31/2008 FT (2009)= $16,000,000 AVA (2009)=$17,000,000 PFB (2009)=$0 No quarterly contributions (of $500,000) made 4/15/2009 or 7/15/2009 In August 2009, determined FT and that MRC (2009) =0 Conclusion is no problem as far as late 2009 contributions since 90% of nada is nada. Any disagreement??? Agreed. Ultimately the required quarterly is lesser of 100% of prior year or 90% of current year. I don't think it matters when the actual 2009 funding requirement was determined.
david rigby Posted April 20, 2010 Posted April 20, 2010 Check. I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice.
Andy the Actuary Posted April 20, 2010 Author Posted April 20, 2010 Thank you. So, an employer (at least in 2009/2010) might in some cases be able to avoid the ramifications of blown quarterlies by virtue of an election to use different interest rates or asset averaging. The material provided and the opinions expressed in this post are for general informational purposes only and should not be used or relied upon as the basis for any action or inaction. You should obtain appropriate tax, legal, or other professional advice.
dmb Posted April 20, 2010 Posted April 20, 2010 Thank you.So, an employer (at least in 2009/2010) might in some cases be able to avoid the ramifications of blown quarterlies by virtue of an election to use different interest rates or asset averaging. Agreed again, especially for a plan that froze at 12/31/08 where there will be no normal cost (other than expenses) for 2009. In your example it seems reasonable to assume the 2009 expenses are less than the $1,000,000 excess assets!
Andy the Actuary Posted April 20, 2010 Author Posted April 20, 2010 Thank you.So, an employer (at least in 2009/2010) might in some cases be able to avoid the ramifications of blown quarterlies by virtue of an election to use different interest rates or asset averaging. Agreed again, especially for a plan that froze at 12/31/08 where there will be no normal cost (other than expenses) for 2009. In your example it seems reasonable to assume the 2009 expenses are less than the $1,000,000 excess assets! Reasonable, of course, unless legal fees are being paid out of the Trust. The material provided and the opinions expressed in this post are for general informational purposes only and should not be used or relied upon as the basis for any action or inaction. You should obtain appropriate tax, legal, or other professional advice.
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