2009 Instructions For Schedule Sb (Form 5500) Single-Employer Defined Benefit Plan Actuarial Information Page 7

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enter “NRA.” Otherwise, enter the assumed retirement age. If
and Code section 411(a)(13)(C) (e.g., cash balance plans) the
the valuation uses rates of retirement at various ages, enter the
statement must include the assumptions used to convert
nearest whole age that is the weighted average retirement age.
balances to annuities. In addition, the statement must describe
the method for determining the actuarial value of assets and
On an attachment to Schedule SB, list the rate of retirement
any other aspects of the funding method for determining the
at each age and describe the methodology used to compute the
Schedule SB entries that are not prescribed by law.
weighted average retirement age, including a description of the
Also attach a summary of the principal eligibility and benefit
weight applied at each potential retirement age, and label the
provisions on which the valuation was based, including the
attachment “Schedule SB, line 22 – Description of
status of the plan (e.g., frozen eligibility, service/pay, or
Weighted Average Retirement Age.”
benefits), optional forms of benefits, special plan provisions,
Line 23. Mortality Tables. Mortality tables described in Code
including those that apply only to a subgroup of employees
section 430(h)(3), ERISA section 303(h)(3), and section
(e.g., those with imputed service), supplemental benefits, and
1.430(h)(3)-1 of the Treasury Regulations as published by the
identification of benefits not included in the valuation, and a
IRS must be used to determine the funding target and target
description of any significant events that occurred during the
normal cost for non-disabled participants and may be used to
year, a summary of any changes in principal eligibility or benefit
determine the funding target and target normal cost for disabled
provisions since the last valuation, and a description (or
participants, unless the IRS has approved (or was deemed to
reasonably representative sample) of plan early retirement
have approved) the use of a substitute mortality table reflecting
reduction factors and optional form conversion factors. Label
the plan’s actual experience and projected trends in general
the summary “Schedule SB, Part V – Summary of Plan
mortality experience. Standard mortality tables must be either
Provisions.”
applied on a generational basis, or the tables must be updated
Also, include any other information needed to disclose the
to reflect the static tables published for the year in which the
actuarial position of the plan fully and fairly.
valuation date occurs. Substitute mortality tables must be
applied in accordance with the terms of the IRS ruling letter.
Specific Instructions for Part VI —
Separate standard mortality tables were published by the
Miscellaneous Items
IRS for annuitants (rates applying for periods when a participant
Line 24. Change in Non-Prescribed Actuarial Assumptions.
is assumed to receive a benefit under the plan) and
If a change has been made in the non-prescribed actuarial
nonannuitants (rates applying to periods before a participant is
assumptions for the current plan year, check “Yes.” If the only
assumed to receive a benefit under the plan). If a plan has 500
assumption changes are statutorily required changes in the
or fewer participants as of the valuation date for the current plan
discount or mortality rates, or changes required for plans in
year as reported in line 3d, column (1), the plan sponsor can
at-risk status, check “No.” Include as an attachment a
elect to use the combined mortality tables published by the IRS,
description of any change in non-prescribed actuarial
which reflect combined rates for both annuitants and
assumptions and justifications for any such change. (See
nonannuitants.
section 103(d) of ERISA.) Label the attachment “Schedule SB,
Check the applicable box to indicate which mortality table
line 24 – Change in Actuarial Assumptions.”
was used to determine the funding target and target normal
Generally, if the “Yes” box is checked and the
cost. If one mortality table was used for certain populations
non-prescribed assumptions have been changed in a way that
within the plan and a different mortality table was used for other
decreases the funding shortfall for the current plan year,
populations, check the box for the table that applied to the
approval for such a change may be required. However,
largest population. If more than one mortality table was used,
approval is not required with respect to any actuarial
attach a statement describing the mortality table used for each
assumptions that are adopted for the first plan year for which
population and the size of that population. Label the attachment
Code section 430 and ERISA section 303 apply to the plan, and
“Schedule SB, line 23 – Information on Use of Multiple
that are not inconsistent with the requirements of Code section
Mortality Tables.”
430.
Check “Prescribed – combined” if the funding target and
target normal cost are based on the prescribed tables with
Line 25. Change in Funding Method. If a change in the
combined annuitant/nonannuitant mortality rates.
funding method has been made for the current plan year, check
Check “Prescribed – separate” if the funding target and target
“Yes.” For this purpose, “funding method” refers to not only the
normal cost are based on the prescribed tables with separate
overall method used by the plan, but also each specific method
mortality rates for nonannuitants and annuitants.
of computation used in applying the overall method.
Check “Substitute” if the funding target and target normal
Accordingly, method changes include modifications such as a
cost are based on substitute mortality tables. If substitute
change in the method for calculating the actuarial value of
mortality tables are used, attach a statement including a
assets or a change in the valuation date (not an exclusive list).
summary of plan populations for which substitute mortality
In general, any changes in a plan’s funding method must be
tables are used, plan populations for which the prescribed
approved by the IRS. However, see the regulations and Notice
tables are used, and the last plan year for which the IRS
2009-22 for circumstances in which a change in funding method
approval of the substitute mortality tables applies. Label the
may be made for the 2009 plan year without obtaining approval
from the IRS.
attachment “Schedule SB, line 23 – Information on Use of
Substitute Mortality Tables.”
Include, as an attachment, a description of the change.
Label the attachment “Schedule SB, line 25 – Change in
Attach a statement of actuarial assumptions and funding
Method.”
methods used to calculate the Schedule SB entries and label
the statement “Schedule SB, Part V – Statement of
Note. The plan sponsor’s agreement to any change in funding
Actuarial Assumptions/Methods.” The statement must
method that is required by a class ruling letter or other
describe all non-prescribed actuarial assumptions (e.g.,
published guidance should be reported on line 8 of Schedule R
retirement, withdrawal rates) used to determine the funding
(Form 5500).
target and target normal cost, including the assumption as to
Line 26. Schedule of Active Participant Data. Check “Yes”
the frequency with which participants are assumed to elect
only if (a) the plan is covered by Title IV of ERISA and (b) the
each optional form of benefit (including lump sum distributions),
plan has active participants.
whether mortality tables are applied on a static or generational
basis, whether combined mortality tables are used instead of
If line 26 is “Yes,” attach a schedule of the active plan
separate annuitant and nonannuitant mortality tables (for plans
participant data used in the valuation for this plan year. Use the
with 500 or fewer participants as of the valuation date), and (for
format shown on the following page and label the schedule
target normal cost) expected increases in compensation. For
“Schedule SB, line 26 – Schedule of Active Participant
applicable defined benefit plans under ERISA section 203(f)(3)
Data.”
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Instructions for Schedule SB (Form 5500)

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