These are real #s from the 1/1/07 valuation:

mva=4859962
ava=5665671 (limited to 120% of mva)
credit balance =1295808
RPA CL=6041049
no annuity purchases in last 2 years

To get the 08 presumption:

ava must be limited to 110% of mva so ava becomes 5345958
ava is < 90% of CL so CB must be subtracted
07 AFTAP is (5345958-1295808)/6041049 = 67.0%, so my 08 presumption is 57.0%

To improve 07 AFTAP:

Sponsor must elect to burn the credit balance. This will make the 07AFTAP 88.5% so 08 presumption becomes 78.5%. Benefit payments are restricted. Since the plan's normal form of benefit is a single life annuity, and all optional forms are the equivalent of the SLA, can I say that the payments to the retirees are not affcted by the restriction?

If sponsor contributes approximately 625000 (within the range for 07) can I add that to the ava and improve the 07AFTAP to >90% so mt 08 presumption to > 80%? I think so, but...


Do I have this anywhere near right? Thanks for any and all help.

Well, I will take a shot.

The percentage for 2008 is 88.5 until 4/1/2008 which is when it drops 10 points UNLESS you have recertified the numbers for 2008. There is a special exception for this first year where the actuary may include employer contributions that are reasonably expected to be made MAY be counted in the certification (but I believe this is for the 2008 certification). Therefore, a contribution for 2007 which is made timely can improve the certification for 2008.

I am not sure the contribution can be counted when determining the 2007 percentage.

I will be watching to see if either one of us is close to the 'correct' answer (if there is one <G>).

Is 92% the transitional % for the 2008 determination ? I don't see the 90% in the literature I'm reading but maybe I'm missing something.

I see now the 90% is correct. On a related issue, beyond the 2008 AFTAP, which specifically can use the Actuarial Value of Assets (AVA) within the 90-110% corridor of FMV of assets, is the 2009 and thereafter AFTAP supposed to be based upon actual Fair Market Value of assets ? or can AVA assets still be used ? I'm about 35% through the proposed regs on this and still can't tell.