er struggling to fund 2008 plan

[abanky]

I have a client who has a 12-17 to 12-16 plan year.

For the 2008 plan year, they have a contribution of 440k and are saying there is no way that they can make it.

They want to terminate the plan as soon as possible.

They are pbgc covered. 2 hces and 1 nhces.

We are past the deadline to apply for a MRC waiver....

is there anyway for them to get rid of the 2008 contribution?

Any suggestions?

[Andy the Actuary]

(1) Adopt different interest assumptions

(2) Adopt asset smoothing

(3) Apply credit balance if feasible

(4) Change valuation date from EOY to BOY

Some or combination of above may help

[abanky]

what if none of that helps... most of the mrc is based upon a very high target normal cost.

[Effen]

Although I agree that Andy's suggestions should help lower the 2008 requirements, they will also have a 2009 required contribution as well. Some of the things you do to lower the 2008 requirements will only serve to raise the 2009 requirements.

You really need to look at both years at the same time and come up with the best combination over a two year period.

Are either of the HCE's the principle owner?

Also, there is no quick termination when the PBGC is involved. You have to comply with their time lines.

[abanky]

The HCEs are a married couple who owns the company

[My 2 cents]

If the valuation date is the first day of the plan year, it's not too late to switch for the 2008 valuation to the October 2008 full yield curve (but that won't help when you get into the 2009-10 plan year valuation, when the normal segment rates would be more favorable, and nothing will come close to what you can do for the 2008-09 plan year).