IRS proposed Reg 1.430(f)-1(b) is entitled "Election to maintain balances." In fact, -1(a) provides that "paragraph (b) of this section sets forth fules regarding a plan sponsor's election to maintain a fscob and pfb."

I was of the understanding that the employer must make an election to burn credit balances. However, having to elect to maintain blances creates the convolution that if you must elect to maintain the balance, and you must elect to burn the balance, what occurs if you make no election whatsoever?

Is anyone advising their clients to elect to maintain the FSCOB? I presumed we were simply dealing with some errant wording?

"IRS sets forth fools", or was that "sets forth rules"? We will be scrambling like everyone else to get the election issues right. My understanding in general is that 436 burns are a direct result of the AFTAP measurement event. 430 burns are the logical best choice if quarterly contributions have not been paid (for most plans but not necessarily all plans), and any other credit burns are negotiated between the actuary and the plan sponsor. Then the elections have to be executed by the plan sponsor so they can be reflected in the schedule SB.

Is that your understanding as well?

I'm having my clients elect everything other than the option to pay my invoices. I am not, however, having them elect to maintain the FSCOB as there appears to be no automatic disposition of it if they don't. I've incorporated some wording to have the client apply the FSCOB to 2009. E.g., "To the extent that law permits such election, I elect for the Plan’s Enrolled Actuary to apply $2,772 of the Funding Standard Account Carryover Credit Balance as of January 1, 2009 to satisfy the four quarterly 2009 contribution obligations under IRC Section 430(j). I understand that as of this certification date law neither provides for nor proscribes such an election in respect of IRC Section 430(j) and that if law changes, another election may be required. I give this election unconditionally and understand that they are irrevocable."

PPA law in respect of plan sponor elections work just fine so long as life is timely. This means they will rarely work. And then . . .