A range certification (80-100%) was certified by 4/1/08 for calendar year plan. The employer will need to waive a portion of the credit balance to reach 80% when actual certification is completed by 10/1/08. In the mean time, client may use balance of credit balance towards 4/15 and 7/15 quarterly requirments. What if, come 10/1, the amount of waived credit balance to avoid benfit restrictions is greater than originally calculated and eats into some of the credit balance that was used toward the quarterly requirements??? How is that handled?? Does employer now become late on quarterly payments?? Any help is appreciated. Thanks.

Since you can't do both, you choose the lesser of two evils -- missed quarterly contributions. If the change is deemed material (and it's hard to understand how it could be deemed immaterial), the penalties for failing to give notice of benefits restrictions can amount to $1,000 per day per participant, so by Oct 1, your client could be bankrupt if the maximum penalty is assessed.

In short, DO NOT LET THIS HAPPEN

Correct me if I'm wrong on this, but aren't elections to use balances for quarterlies irrevocable when made? And, don't the elections have to be made (unless late, I guess) by the quarterly due date? If so, wouldn't that foreclose being able to go back and make changes -- changing the election?

Uner the proposed reg, starting in 2009, those elections must be irrevocable.