Sunrise Sunset

[tuni88]

When will each of the recent pension relief rules we've been living under (MAP21, HATFA, etc.) expire?  Will it be a big deal? 

[C. B. Zeller]

See Table 1 here: https://www.irs.gov/retirement-plans/funding-yield-curve-segment-rates

BBA 2015 extended the 90-110% corridor through 2020. I wouldn't be surprised to see it extended again before then. However the 25-year average now includes 10 years of very low interest rates, this combined with the fact that interest rates are now starting to rise again, means that the HATFA rates are not going to be very much higher than the unadjusted rates for long.

[tuni88]

So calendar year plans, assuming conditions do not change radically between now then, are not likely  to see a significant funding bump upwards going into 2021? 

[C. B. Zeller]

Your guess about the future is as good as mine, but you can see from the table that the 430 rates have been steadily trending down, and the 404 rates have been steadily trending up. So FTs and TNCs for minimum funding purposes have been getting larger, and for maximum deduction purposes have been getting smaller.

In all likelihood, market fluctuations and demographic changes (e.g., a participant with a large AB going from 2nd to 1st segment rate) are going to have more significant impacts on your funding requirements than changes in the segment rate.

[tuni88]

Would appear to be a soft landing then.  The opposite of what happened several years ago when we went from having to make not insignificant annual contributions to making none ever since.