Valuation date question

[mphs77]

Company A has a Cash Balance Plan with the standard age 21 and 1 year of service entry requirement. Entry dates are semi annual.

The benefit formulas for the groups involved are % of the determination period Compensation for the Plan Year. A participant must work 1000 hours in the Plan Year to get an allocation.

The prior actuary filed the Schedule SBs with a beginning of year valuation date. Thus, for example, the Plan had a contribution allocation on 1/1/2014 of $x dollars which included John Doe who did not enter the Plan until 7/1/2014.

Seems odd to me, but I am an old dog and not prone to understand new tricks. My preferences are for a beginning of year valuation to be based on the 12 months prior to the valuation date.

Is this anything to be worried about?

Thanks for all guidance provided.

[tymesup]

Here are two ways this could happen:

Suppose John Doe were an employee on 1/1/14. If so, he could have been included in the 1/1/14 valuation even if he wasn't a participant on that date.

Alternatively, the valuation was performed, a minimum contribution was calculated, a maximum deduction was calculated. John Doe entered the plan in 2014, so a contribution was allocated to him. The total contribution was between the minimum and the maximum.

[AndyH]

(3) Anticipated future participants. In making any determination of the funding target or target normal cost under paragraph (b) of this section, the actuarial assumptions and funding method used for the plan must not anticipate the affiliation with the plan of future participants not employed in the service of the employer on the plan’s valuation date. However, any such determination may anticipate the affiliation with the plan of current employees who have not yet satisfied the participation (age and service) requirements of the plan as of the valuation date.

1.430(d)(1)(e)(3)