funding shortfall

[Gary]

For purposes of this post assume no credit balances exist.

430©(6) says that if the funding shortfall is zero all prior bases are considered fully amortized and be zero.

In this calculation for 2010 is the FT computed at 100% or the transitional 96%?

430©(5) exemption of shortfall base:

430©(5)(B) Transition rule: provides that the applicable percentage (i.e. 96% in 2010) of the FT is taken into account for purposes of paragraph (3)(A). Paragraph (3)(A) of section 430© is "the funding shortfall for such plan year". So if the 96% is applied in (3)(A) this could provide a situation (and does) where at 100% of FT plan has a shortfall and at 96% of FT plan has a zero shortfall. And if there is no shortfall all bases are zero.

The above seems to raise a case for using 96% of FT to determine the funding shortfall (not just for purposes of a current year exemption), however, the Schedule SB seems to indicate that the 96% of FT is only applicable in determining if there is a current year exemption and is only applied to funding shortfall if there is NO exemption. So there is the no man's land when there IS an exemption and then the shortfall may (or may not) need to computed using 100% of FT.

thanks.

[Blinky the 3-eyed Fish]

100%. No time to research cites.

[Gary]

Thanks. No worries, we have already cited the cites.