Actuarial Valuation

[ERISAAPPLE]

We have a new client with a defined benefit plan.  The prior actuary did the valuations wrong for several years.  Do you think we need to file amended 5500s, or should we just fix it on the next 5500 and move forward, perhaps with an explanatory note.  Had the valuations been done correctly, nothing would have been different in terms in things like excise taxes, etc.      

[david rigby]

Wrong?  That a pretty broad summary.  I suggest the current actuary discuss with the prior actuary (assuming he/she is available).

[ERISAAPPLE]

Not available.  They did the prior actuarial valuation using the wrong benefit formula.  They misread the plan.  

[C. B. Zeller]

This article on ASPPA's website (Redoing a Schedule SB on a Takeover When You Identify Issues) claims that "The IRS has indicated that it is not necessary to amend a Schedule SB when the changes have no impact on minimum funding" but does not provide a source.

[AndyH]

1 hour ago, C. B. Zeller said:

This article on ASPPA's website (Redoing a Schedule SB on a Takeover When You Identify Issues) claims that "The IRS has indicated that it is not necessary to amend a Schedule SB when the changes have no impact on minimum funding" but does not provide a source.

I ran into a similar situation years ago.  In my case the correct formula was used but the prescribed mortality tables were not.  We called the IRS and spoke to a senior rep (who shall remain nameless).  He said that if the error would have caused a funding deficiency it must be redone, otherwise it would be acceptable to attach something to the SB if the credit balances were being corrected or if something else did not flow through from the prior SB to the current SB.  

Now a formula error is not the same but this may help somewhat.

[ERISAAPPLE]

Thanks everyone.