Code Section 436

[ScottR]

Hi all,

I'm not clear as to what the following Code Sections mean....

436(f)(3)©

436(i)(2)

Would anyone care to shed some light on them?

Also, am I correct that Section 436(j)(3)(A) means no mandatory burn of COB/PFB if assets/FT is >= 100%? For example, assume assets of $1 million, FT of $990k, COB of $100k, and PFB of $200k. No need to burn any of the COB/PFB?

TIA

.. Scott

[david rigby]

I'll take a shot.

1. don't know. good question.

2. don't know. good question.

3. Yes.

[SoCalActuary]

436 restrictions under b, c, d, or e can apply to either single or negotiated multiemployer plans.

436(f)(3)(A) requires an adjustment to balances if it can remove restrictions.

But 436(f)(3)© says that the restrictions under b, c or e an force a deemed reduction in balances only in the multi-employer plan.

A single employer plan makes a deemed reduction for d, but is not required to make a reduction for b, c or e.

436(i)(1) provides that benefit accruals and distribution options commence after exiting a 436 restriction.

But 436(i)(2) does not require any changes to the accrued benefits or past distributions that were restricted. It only applies the restoration to future activity.

Hope that helps.

[AndyH]

436 restrictions under b, c, d, or e can apply to either single or negotiated multiemployer plans.

436(f)(3)(A) requires an adjustment to balances if it can remove restrictions.

But 436(f)(3)© says that the restrictions under b, c or e an force a deemed reduction in balances only in the multi-employer plan.

A single employer plan makes a deemed reduction for d, but is not required to make a reduction for b, c or e.

436(i)(1) provides that benefit accruals and distribution options commence after exiting a 436 restriction.

But 436(i)(2) does not require any changes to the accrued benefits or past distributions that were restricted. It only applies the restoration to future activity.

Hope that helps.

Do you mean single employer collectively bargained plans instead of multiemployer?

[SoCalActuary]

436 restrictions under b, c, d, or e can apply to either single or negotiated multiemployer plans.

436(f)(3)(A) requires an adjustment to balances if it can remove restrictions.

But 436(f)(3)© says that the restrictions under b, c or e an force a deemed reduction in balances only in the multi-employer plan.

A single employer plan makes a deemed reduction for d, but is not required to make a reduction for b, c or e.

436(i)(1) provides that benefit accruals and distribution options commence after exiting a 436 restriction.

But 436(i)(2) does not require any changes to the accrued benefits or past distributions that were restricted. It only applies the restoration to future activity.

Hope that helps.

Do you mean single employer collectively bargained plans instead of multiemployer?

No. I treat single employer plans the same in this code section, whether negotiated or not. But your question is interesting.

[Effen]

I do not think Section 436 applies to multi-employer plans. They don't calculate Funding Targets or AFTAPs, or even use segmented interest rates.

Single employer collectively bargained - yes. Multi-employer - no.