2009 Instructions For Schedule Sb (Form 5500) Single-Employer Defined Benefit Plan Actuarial Information (Page 6 of 11) in pdf

above. Increase the effective interest rate for the applicable

If the plan is subject to the liquidity requirement and has a

plan year by 5 percentage points for any portion of the unpaid

liquidity shortfall for any quarter of the plan year (see ERISA

minimum required contribution that represents a late quarterly

section 303(j)(4)(E) and Code section 430(j)(4)(E)), enter the

installment, for the period between the due date for the

amount of the liquidity shortfall for each such quarter. If the plan

installment and the date of payment. Reflect the increased

was subject to the liquidity requirement but did not have a

interest rate for any portion of the unpaid minimum required

liquidity shortfall, enter zero. File IRS Form 5330, Return of

contribution that represents a late liquidity shortfall installment,

Excise Taxes Related to Employee Benefit Plans, with the IRS

for the period corresponding to the time between the date the

to pay the 10% excise tax(es) if there is a failure to pay any

installment was due and the end of the quarter during which it

liquidity shortfall by the required due date, unless a waiver of

was due. The amount reported in line 19a cannot be larger than

the 10% tax under Code section 4971(f) has been granted.

the amount reported in line 28.

Specific Instructions for Part V — Assumptions

For the purpose of allocating contribution amounts to unpaid

Used To Determine Funding Target and Target

minimum required contributions, any unpaid minimum required

Normal Cost

contribution attributable to an accumulated funding deficiency at

the end of the last plan year before ERISA section 303 or Code

Line 21. Discount Rate.

section 430 applied to the plan (the “pre-effective plan year”) is

Line 21a. Enter the three segment rates used to calculate the

treated as a single contribution due on the last day of the

funding target as provided under ERISA section 303(h)(2)(C)

pre-effective plan year (without separately identifying any

and Code section 430(h)(2)(C) and as published by the IRS,

portion of the accumulated funding deficiency attributable to late

unless the plan sponsor has elected to use the full yield curve.

quarterly installments or late liquidity shortfall installments), and

Enter rates after application of the transition rule provided under

the associated effective interest rate is deemed to be the

ERISA section 303(h)(2)(G) and Code section 430(h)(2)(G)

valuation interest rate for the pre-effective plan year.

unless the sponsor has elected to not have the transition rule

Line 19b. Contributions Made To Avoid Benefit

apply. If the sponsor has elected to use the full yield curve,

Restrictions. Include in this category contributions made to

check the “N/A, full yield curve used” box.

avoid benefit restrictions under ERISA section 206(g) and Code

Special rules for airlines using 10-year amortization

section 436. Adjust each contribution for interest from the date

period under section 402(a)(2) of PPA (as amended). Enter

the contribution was made to the valuation date as described

the information described above to reflect the discount rates

above.

used to determine the target normal cost in accordance with

Line 19c. Contributions Allocated Toward Minimum

Code section 430(h)(2) and ERISA section 303(h)(2). Do not

Required Contribution for Current Year. Include in this

enter the special 8.25% interest rate used to determine the

category contributions (including any contributions made in

funding target under section 402(a)(2) of the PPA.

excess of the minimum required contribution) that are not

Line 21b. ERISA section 303(h)(2)(E) and Code section

included in line 19a or 19b. Adjust each contribution for interest

430(h)(2)(E) provide that the segment rate(s) used to measure

from the date the contribution was made to the valuation date

the funding target are those published by Treasury for the

as described above.

month that includes the valuation date (based on the average of

Line 20. Quarterly Contributions and Liquidity Shortfalls.

the monthly corporate bond yield curves for the 24-month

period ending with the month preceding that month).

Line 20a. Did the Plan Have a Funding Shortfall for the

Alternatively, at the election of the plan sponsor, the rate(s)

Prior Plan Year? In accordance with ERISA section 303(j)(3)

used to measure the funding target may be those published by

and Code section 430(j)(3), only plans that have a funding

Treasury for any of the four months that precede the month that

shortfall for the preceding plan year are subject to an

includes the valuation date. The IRS has indicated that it will not

accelerated quarterly contribution schedule. For this purpose, a

challenge the use of the monthly yield curve based on interest

plan is considered to have a funding shortfall for the prior year if

rates published by the IRS for the month including the valuation

the funding target reported on line 3d, column (2) is greater

date or any one of the immediately preceding four months, for

than the actuarial value of assets reported on line 2b, reduced

plan years beginning in 2008 and 2009.

by the sum of the funding standard carryover balance and

prefunding balance reported on line 13, columns (a) and (b),

Enter the applicable month to indicate which rates were used

with all figures taken from the prior year’s Schedule SB.

to determine the funding target. Enter “0” if the rates used to

However, see Code section 430(f)(4)(B)(ii) and ERISA section

determine the funding target were published for the month that

303(f)(4)(B)(ii) for special rules in the case of a binding

includes the valuation date. Enter “1” if the rates were published

agreement with the PBGC providing that all or a portion of the

for the month immediately preceding the month that includes

funding standard carryover balance and/or prefunding balance

the valuation date, “2” for the second preceding month, and “3”

is not available to offset the minimum required contribution for

or “4,” respectively, for the third or fourth preceding months. For

the prior plan year.

example, if the valuation date is January 1 and the funding

target was determined based on rates published for November,

Please note that a plan may be considered to have a funding

enter “2.”

shortfall for this purpose even if it is exempt from establishing a

shortfall amortization base under the provisions of ERISA

Note. The plan sponsor’s election under ERISA section

section 303(c)(5) and Code section 430(c)(5), as amended by

303(h)(2) or Code section 430(h)(2) regarding the interest rate

WRERA.

used (election to use yield curve, election of applicable month

other than the default month, or election not to use transition

Line 20b. If line 20a is “No” (i.e., if the plan did not have a

rules in ERISA section 303(h)(2)(G) and Code section

funding shortfall in the prior plan year), the plan is not subject to

430(h)(2)(G)) generally may not be changed unless the plan

the quarterly contribution rules, and this line should not be

sponsor obtains approval from the IRS. However, see the

completed. If line 20a is “Yes,” check the “Yes” box on line 20b

regulations for circumstances in which changes to an interest

if required installments for the current plan year were made in a

rate election may be made for the 2009 plan year without

timely manner; otherwise, check “No.”

obtaining approval from the IRS.

Line 20c. If line 20a is “No,” or the plan had 100 or fewer

participants on every day of the preceding plan year (as defined

Line 22. Weighted Average Retirement Age. Enter the

for line F), the plan is not subject to the liquidity requirement of

weighted average retirement age for active participants. If the

ERISA section 303(j)(4) and Code section 430(j)(4) and this line

plan is in at-risk status, enter the weighted average retirement

should not be completed. Attach a certification by the enrolled

age as if the plan were not in at-risk status. If each participant is

actuary if the special rule for nonrecurring circumstances is

assumed to retire at his/her normal retirement age, enter the

used, and label the certification “Schedule SB, line 20c –

age specified in the plan as normal retirement age. If the normal

Liquidity Requirement Certification.” (See ERISA section

retirement age differs for individual participants, enter the age

303(j)(4)(E)(ii)(II) and Code section 430(j)(4)(E)(ii)(II).)

that is the weighted average normal retirement age; do not

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Instructions for Schedule SB (Form 5500)

2009 Instructions For Schedule Sb (Form 5500) Single-Employer Defined Benefit Plan Actuarial Information Page 6

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