Quarterly Contributions After Short Plan Year

[Andy the Actuary]

A 50,000 participant DB plan has a 12/1-11/30 plan year. The plan year will change to the calendar year effective 1/1/2012 so that there will be a one-month short plan year 12/1/2011-12/31/2011. The Plan had a funding short-fall as of 12/1/2010 so quarterlies are due for the short plan year and the 2008 proposed regulations say use 1/12 of the 2010-11 MRC to determine the short plan year minimum quarterly contribution safe-harbor.

It is now 4/15/2012. We don't yet have the data and can only estimate if there is a funding short-fall 12/1/2011 and thus, do not know if quarterlies apply for the 2012 Plan Year. Worse, the 2008 proposed regulations stipulate that in the plan year following a short plan year, the minimum quarterly contribution is simply 90% of the current year MRC and the 100% last year safe-harbor does not apply.

Apart from just estimating a high contribution for the 4/15/2012 first quarterly installment for the 2012 plan year, does anyone know of any guidance to cover this situation?

[Guest robertwa]

I don't think there's any guidance. You just have to make a high estimate of what you think the quarterlies will be based on 25% of 90% of the 2012 minimum and hope they are enough.