First time I've encountered this - the FSA interest rate for a plan is higher than 175% of the federal mid-term rate needed to calculate the 412(m) charge. Does this mean that there is no charge for just making the whole contribution on the minimum funding deadline and not making any quarterly contribuitons? Doing the calculation literally would result in a credit, but I don't suppose it would be appropriate to reduce the contribution by not making quarterly contributions. Does anyone know whether it's acceptable to just show zero for 412(m) charges in this situation? All help is greatly appreciated.

Ye olde 412(m)(1) provides an interest charge to the amount of underpayment equal to the greater of the valuation interest rate and 175% of the Federal Mid-Term Rate. Thus, there would be no credit if 175% of FMTR is less than the valuation interest rate. See IRS Notice 89-52.

I think there is a charge, depending on the time of the actual contribution. If the actual contribution is after the end of the plan year, there is no offsetting credit for the time between EOY and actual contrib date.