Client contributed approx. $50,000 above minimum in 2008 (1st year of plan, BOY val date). But since the funded ratio for 2008 is technically 0% can this prefunding balance not be used to offset the minimum required for 2009?

To clarify, I say 0% funded ration for 2008 because at 1/1/2008 assets were $0 so AFTAP = 0%.

See IRS Reg. 1.430(f)-1(d)(3)(ii). Read carefully.

thanks i dont have access right now but will check it out.

Here's my shot at what it says: If

(1) New plan not the result of merger or spinoff and

(2) Funding Target for first year was zero,

Then, first years funding ratio is deemed to be 80% for purposes of applying PFB in second year. I.e., because funding ratio is indeterminate -- 0 / 0.

Thus, if plan grants past service as of plan effective date and FT>0, you won't be able to use PFB in second year (because funding ratio in first year is calculable and is 0%).

thats what i thought. the plan was effective 1/1/2008 but they granbted 1 year of past service so assets = 0 and FT >0 for 2008 valuation. thanks!!!