Tell me if I am wrong about a calendar year plan. If the 2007 and 2008 AFTAP are not certified, then there are no distribution restrictions until 4/1/2008 under this special rule this year. So, it's a potential advantage to not certifying to the 2007 AFTAP too soon. Of course if the numbers are available and it's clearly underfunded but it's just that no actual certification has been signed, anyone see that as a problem? It seems strange that there is an advantage to burying your head in the sand.

Would agree with your interpretation.

This is tantamount to not having to perform an environmental assessment and clean-up of your contaminated land until you sell it. As long as you own it, you can continue to pollute the watertable. Other than the law permits, what is the rational basis for potentially making a plan more underfunded when you know it can't meet the safe-harbor criteria?

I don't like that example. Thanks to that nuclear waste in my lake, I now have that third eye.

Not sure about rationale, but this is the one I thought of:
Consider a plan that pays full lump sums. Suppose the business owner/management does not want to pay a lump sum to a particular retiring/terminating EE for whatever reason (fear that he/she will use the LS to set up a competing business, etc). By delaying the process of certifying the FTAP/AFTAP, the plan falls below the level at which a LS can be paid.

No doubt, others can contribute additional reasons.

A discussion similar to this occurred during one of the meetings (unrecorded of course). The general gist was that many actuaries felt 'uncomfortable' delaying a certification when the information was available.

During one fo the webcast's Jim Holland mentioned they would take a negative view of anyone intentionally delaying a certification to game the system in this manner. I remember a pretty strong statement to the effect of the individuals involved would have some serious issues to deal with but don't really remember any specifics.

I also heard this, but I would characterize the comment as a bit stronger- as a warning.

Hold on here. To whom did Jim refer? Are we talking about plan sponsor (who "delays" sending census data to the actuary), trustee (who "delays" sending asset information to the actuary), the actuary? What is the authority for saying delay is not permitted?

Unfortunately I did not actually take any notes on this topic, however, here are some of the relevant bullet points on a couple of the presentation slides. Maybe this will jog someone's memory about the details (although I don't think there were many to begin with). A CD-ROM of the webcast can be purchased from the SOA (http://www.soa.org/news-and-publications/p...pub-cd-rom.aspx - look for "PPA–A Review of Recent Guidance Webcast")

Under the Heading "Examinations" (from slides 55 & 57)
- Consider whether there are deliberate delays to favor or disfavor participants
- Will need to look for timely documentation
- On exam, the questions may well turn out to be those of when, how, who, and what followed
- It may turn out to be the case, that the application of benefit restricitions presents fiduciary concerns as well