I figured this question would have been asked here before, but I couldn't find it so here goes. Do you think Rev. Rul. 79-237 still applies in this post-PPA environment and NC and amortization payments are pro rated through the plan termination date?

If 79-237 applies, I will lobby Mo. Senator Kit Bond. It's unfair (I voted for Obama) that 79-237 would still apply whereas 77-2 no longer applies. Or does it? Assuming that the plan will be made sufficient to make full distributions at termination, this is a matter of academics, that is unless your client is being prosecuted for Medicare fraud, in which case you'd better get it right, whatever right is.

May I suggest for your next caveat: "You can't practice billards on a ping-pong table and then expect life to behave rationally." (andy t. a.)

I don't think you would "prorate" the TNC. I think it would be based on whatever actually accrued from the BOY to DOPT or freeze. I'm less sure about the shortfall amortization - prorating makes sense, which it why it probably isn't right.

Personally, I don't think 79-237 made much sense in the first place. Why pro rate the NC in the year of term? If the benefit was accrued, why not fund for it? That being said, I don't see how PPA changed 79-237 and I don't know that anyone really does.

http://benefitslink.com/boards/index.php?s...c=37756&hl=

And to expand upon that conversation - the purpose of the pro-ration was due to the termination creating a short plan year. After further discussion with others I came to the conclusion that termination no longer creates a short plan year therefore there is no pro-ration.

When did termination ever create a short year?