EOY AFTAP

[Dinosaur]

I am finalizing a December 31, 2009 end of year valuation. A 2009 AFTAP was issued by 9/30/2009 based on 2008 valuation numbers (since an end of year valuation). The client still has not made the 2009 contribution yet. When I send out this 12/31/2009 valuation can we do a revised AFTAP Certification based on the assumption that the minimum contribution will be deposited on 9/15/2010? (we would specify the amount of the contribution in the AFTAP Certification). This AFTAP would include the Funding Target at end of year (includes Target Normal Cost), the COB and PFB would be increased by the effective interest rate to the end of the year and the assets would include the discounted expected contribution. It would be revised again if the contribution is deposited on a different date.

Or would the 2009 AFTAP include the Funding Target (ignoring the accrual (Target Normal Cost) for the year) and actual assets as of 12/31/2009 (no contributions made so far for 2009) and the COB and PFB with interest (effective rate) to end of year. This is the way that it comes out of our valuation system

However, I read that the Schedule SB (line 15) must be the AFTAP certified for the plan year. I assume this would include the 2009 contribution. So if the last AFTAP last certified does not include the 2009 contribution then it is issued again once the 2009 contribution is deposited to match up with the Schedule SB?

[Effen]

There is very little guidance on end of year valuations, especially as it relates to AFTAPs, so I can only tell you what we do. Generally we use the EOY numbers as a proxy for the next day's BOY AFTAP. In other words, for 12/31/08 valuation we would use 12/31 numbers (EOY FT + EOY TNC), but treat it like the 1/1/09 AFTAP for benefit restrictions.

Like with all AFTAPs now, you CANNOT include receivable contributions that have not been deposited as of the certification date. If you are going to certify the AFTAP before they make all of the prior year's contributions, you will need to recertify it once they complete the prior year's contributions.

[SoCalActuary]

There is very little guidance on end of year valuations, especially as it relates to AFTAPs, so I can only tell you what we do. Generally we use the EOY numbers as a proxy for the next day's BOY AFTAP. In other words, for 12/31/08 valuation we would use 12/31 numbers (EOY FT + EOY TNC), but treat it like the 1/1/09 AFTAP for benefit restrictions.

Like with all AFTAPs now, you CANNOT include receivable contributions that have not been deposited as of the certification date. If you are going to certify the AFTAP before they make all of the prior year's contributions, you will need to recertify it once they complete the prior year's contributions.

You will have the OPPORTUNITY to recertify it. If you don't need to, or it causes no change, then don't.