MAP-21

[Belgarath]

I think DB plans were created to make sure that work can never be truly enjoyable.

For a plan year 4-1-12 to 3-31-13, what is the deadline to make a MAP election to use MAP-21 rates for just the funding calculations and opt not to use them for determining liabilities? (As I understand it, this is for 2012 plan year only, as 2013 would require MAP regardless, right?) And what, if anything, does this do to any required funding notices? Is there a good source that explains this garbage in English?

Thanks! (P.S. - seems like it is perhaps by the first day of the 10th month, which would be...ugh, math before noon - so by December 31st?)

[Andy the Actuary]

Q E-1: How does the plan sponsor elect to defer the use of MAP-21 segment rates until the first plan year beginning on or after January 1, 2013?

A E-1: (a) A plan sponsor elects to defer the use of MAP-21 segment rates until the first plan year beginning on or after January 1, 2013, by providing written notice to the enrolled actuary for the plan and to the plan administrator. The notice must specify the name of the plan, employer identification number and plan number, and whether the use of MAP-21 segment rates is deferred for all purposes or only for determination of the AFTAP used to apply benefit restrictions under § 436.

(b) The election described in paragraph (a) of this Q&A E-1 is irrevocable, and must be made no later than the deadline for filing the Form 5500, Form 5500-SF, or Form 5500-EZ (including extensions) for a plan year beginning in 2012, or the date the applicable form is actually filed, if earlier. However, the decision as to whether to defer the use of MAP-21 segment rates may have to be made earlier if it affects the application of benefit restrictions under § 436. See Q&A R-1 and R-2 of this notice for information on reporting information on Schedule SB of Form 5500 if the MAP-21 segment rates are applied for a plan year beginning in 2012 for purposes of determining the minimum required contribution under § 430 but not for purposes of determining the AFTAP used to apply the benefit restrictions under § 436.

You raise an interesting point that the election for 2012 (calendar year large plan) could be made as late as 10/15/2013 though the 2012 AFN would be delivered by 4/30/2013. To be in sync, you'd have to know where you were headed by the April 30th deadline or I guess you could reissue the AFN -- an undesirable consequence.

[david rigby]

Andy is quoting the Q&A from IRS Notice 2012-61, which you can read here:

http://benefitslink.com/src/irs/notice-12-61.pdf

[Mike Preston]

Remember, for small plans the AFN is due by the due date of the 5500 filing, or, if earlier the date the 5500 is actually filed, but not earlier than 4/30.