Election to Apply Balances

[Pension RC]

Does an election to apply the balances to the required minimum or quarterly need to specify the amount applied? Specifically, 

Plan year is 6/1 - 5/31.

6/1/2016 Minimum is $700,000.

Prefunding Balance as of 6/1/2017 is $150,000.

Plan was frozen 6/1/2017.

6/1/2017 valuation is not complete yet, but minimum will surely be much less than $700,000 since there is no target normal cost. It will probably be about $300,000. Therefore, the 9/15/2017 quarterly will probably be about $67,500 (=$300,000 * 90% * 25%).

Can the plan sponsor just elect to apply whatever is needed to cover the quarterly? Should he elect to apply the whole $150,000?

Thanks for any responses!

[My 2 cents]

If the actual amount paid (or covered by election) is to be less than 25% of the prior year's minimum required contribution, unless you have good calculations for the current year, you have to ask yourself "Am I feeling lucky?"

To be on the safe side, in your example pay (or elect) $175,000 (the maximum 2017-18 quarterly installment), and if the actual amount turns out to be $75,000, then you have already taken care of the 2nd quarterly amount due on 12/15/17 and a good chunk of the third (due 3/15/18).  No harm, no foul.  How you cover $175,000 depends on your cash flow situation.  You can use up your prefunding balance (what good is a PFB anyway?) and kick in another $25,000 cash.

I don't think you can elect "whatever is needed".  Under a standing election applicable to quarterlies, you would have to commit to 25% of the prior year's minimum.

[SoCalActuary]

If you are going to maintain balances, then I recommend using the standing election to apply balances and the standing election to add excess contributions to balances.

[Mike Preston]

I'm with you on the standing election to apply balances but not with you on standing election to add excess.  To each his own style, I guess.

[My 2 cents]

16 minutes ago, SoCalActuary said:

If you are going to maintain balances, then I recommend using the standing election to apply balances and the standing election to add excess contributions to balances.

Considering the fact that, in many instances, the primary reason for excess contributions is to improve the AFTAP, it would be counterproductive to have a standing election to add excess contributions to balances.  If the excess contribution is added to the PFB, the assets are reduced accordingly and the extra funds contributed do not increase the AFTAP at all. 

[SoCalActuary]

If you need to burn them, then you can improve aftap.  But if you are primarily using them for expense transfer between years, you must add them in first.

Aftap is only half of the consideration.