Boy val/aftap

[Draper55]

I don't do many boy vals and generally do not advocate pfcb creation but here is my question:

Client has no minimum required contribution for 2014 but contributes 100k during 2014. During 2014 client loses 35% in asset value even with the 100k cont due to risky stock losses. no credit balance as of 1/1/14. I do the 1/1/15 val and req min now about 250k and AFTAP>60 but <80. If client elects to create pfcb by making an election before 9/15/15 to use the excess 14 conts, then should or must i redo the 1/1/15 val(maybe just reflect it when i do the '15 SB?) and must i redo the 2015 AFTAP or only if it moves out of the 60-80 range? Sorry if this is too basic for you boyers. plan has two participants, one hce and one nhce....

thanks for any responses...

[tymesup]

Valuation must reflect PFB, which must reflect election to add to PFB.

Check 430 regs whether AFTAP must be reissued.

Client might benefit from your guidance on whether to create PFB.

[FAPInJax]

Valuation must reflect PFB. Basically, the 1/1/2015 valuation cannot be completed until 2014 is wrapped up. The AFTAP from 2014 carries over to 2015 and drops 10% at 4/1. What was the number from 2014?

[david rigby]

By all means, create the PFB balance if you think it may be needed. Give yourself/plan flexibility.

The question about "...should or must I redo the 1/1/15 val..." is a standard of practice issue. For what it's worth, my opinion is that proper actuarial documentation will lead you to issue a revised report, but you might be able to issue a shorter revision, focused only on that purpose. It appears this plan is not audited, but (I suggest) your documentation should be sufficiently clear and complete that an auditor would be able to follow along and accept your report(s).

Perhaps review ASOP 41, and review other actuarial literature (such as Contingencies, The Actuary, CCA Journal, etc.) to see if others have contributed commentary.

[StormShadow]

I would redo the val and redo the AFTAP. Redo the val per previous posts (and I'm assuming the minimum required will change, so you would want to redo the val, right?). Redo the AFTAP because it's usually easier for me to generate a new AFTAP than add an attachment to Sch SB, Line 15 for "Reconciliation of difference between valuation results and amounts used to calculate AFTAP".

As an aside, if the 2015 AFTAP was certified before adding the 2014 excess contribution to the PFCB, then later adding to the PFCB causes the 2015 AFTAP to go below 60% - that is not considered an immaterial change (i.e. it is a material change) and may have qualification issues.