Instructions For Schedule B (Form 5500) - Actuarial Information

and less than or equal to $50 million, the decrease was less

Line 12g. Enter the outstanding balance of the unfunded old

than five percent of the current liability of the plan before such

liability as of the valuation date. This is line 12(g) of the 2005

change.

Schedule B reduced by the prior year’s amortization amount,

and adjusted for interest at the prior year’s current liability

If the current liability assumptions for the plan have been

interest rate from the prior year’s valuation date to the current

changed, and such change requires approval of the Service,

valuation date. The unfunded old liability (and therefore all its

enter on an attachment the date(s) of the ruling letter(s)

components) will be considered fully amortized in accordance

granting approval and label the attachment “Schedule B, line

with Q&A-7 of Rev. Rul. 96-20, 1996-1 C.B. 62.

11 – Change in Current Liability Assumptions Approval

Note. In the case of a collectively bargained plan, this amount

Date.”

must be increased by the unamortized portion of any “unfunded

If the current liability assumptions for the plan have been

existing benefit increase liability” in accordance with Code

changed, and such change would have required approval in the

section 412(l)(3)(C).

absence of satisfaction of one of the conditions outlined above,

Line 12h. This amount is the unfunded new liability. It is

enter on an attachment the number of the applicable condition

recomputed each year. If a negative result is obtained, enter

and the plan year for which it applies, and label the attachment

zero.

“Schedule B, line 11 – Change in Current Liability

Applicable Condition.” If condition 1 or 2 applies, also enter

Line 12i. If the unfunded new liability is zero, enter zero for the

the amount of the decrease in UCL. Note that only one of the

unfunded new liability amount. If the unfunded new liability is

conditions needs to be entered.

greater than zero, first calculate the amortization percentage as

follows:

Specific Instructions for Part II

1. If the funded current liability percentage (line 12d) is less

than or equal to 60%, the amortization percentage is 30%.

Line 12. Additional Required Funding Charge. There is no

2. If the current liability percentage exceeds 60%, the

additional funding charge for multiemployer plans that checked

amortization percentage is determined by reducing 30% by the

box 1 on line E or plans that have 100 or fewer participants in

product of 40% and the amount of such excess. Enter the

the prior plan year (as defined under the Who Must File

resulting amortization percentage to the nearest 0.01 percent.

discussion for Schedule B). Do not complete Part II for such

plans.

The unfunded new liability amount is equal to the

Line 12a. A plan’s “Gateway %” is equal to the actuarial value

above-calculated percentage of the unfunded new liability.

of assets (line 1b(2), unreduced by any credit balance) divided

Line 12j. Enter the amortization amount for line 12g based on

by the current liability computed with the highest allowable

the “RPA ’94” current liability interest rate (line 6a) in effect for

interest rate (line 1d(2)(c)). If line 1d(2)(c) is not completed in

the plan year and the following amortization period:

accordance with instructions for that line, use “RPA ’94” current

In general: For the 2006 plan year, the remaining amortization

liability reported on line 1d(2)(a). There is no additional funding

period is 1 year.

charge for plan years beginning in 2006 if the “Gateway %” is at

least 90%. In such cases, enter -0- on line 12q. There is no

Special rule: In the case of a collectively bargained plan, the

additional funding charge for plan years beginning in 2006 if

amortization amount must be increased by the amortization of

(a) the “Gateway %” (for 2006) is at least 80% but less than

any “unfunded existing benefit increase liability” in accordance

90%, and (b) the “Gateway %” for the plan years beginning in

with Code section 412(l)(3)(C)(ii). For any such amortization,

2005 and 2004 were at least 90%, or, the “Gateway %” for the

the amortization period is equal to the remainder of the original

plan years beginning in 2004 and 2003 were at least 90% (in

18-year period that applied when the amortization began.

such case, enter -0- on line 12q).

Base maintenance: On a separate attachment, show the initial

Note. Section 1508 of TRA ’97 provided transition rules for

amount of each DRC amortization base (as defined in Rev. Rul.

certain plans sponsored by companies engaged primarily in the

96-20) being amortized under the general or special rule, the

interurban or interstate passenger bus service that have

outstanding balance of each DRC amortization base, the

“Gateway” percentages that are greater than certain prescribed

number of years remaining in the amortization period, and the

minimum percentages. These transition rules are effective for

amortization amount (with the valuation date as the due date of

such plans for any plan years beginning after 1996 and before

the amortization amount), and label the schedule “Schedule B,

2010. If one of these transition rules is used, line 12a should be

line 12j – Schedule of DRC Bases.” It is not necessary to list

completed, and, if appropriate, a zero should be entered in line

separately the unfunded old liability base and the additional

12q. Attach a demonstration of the use of this transition rule to

unfunded old liability base.

the Schedule B and label the attachment “Schedule B, line

Line 12l. Enter the result determined by subtracting the

12a – TRA ’97 Transition Rule.”

amortization credits (line 9j) from the sum of the normal cost

Note. Section 101(d)(2) of the Pension Funding Equity Act of

and the amortization charges (lines 9b, 9c(1), and 9c(2)). Use

2004 provided a lookback rule for the purpose of applying

the valuation date as the due date for the amortization amounts.

section 412(l)(9)(B)(ii) of the Internal Revenue Code of 1986,

If entering a negative number, enter a minus sign “ – ” to the left

for plan years beginning after December 31, 2003. If this

of the number.

lookback rule is used, attach a demonstration of the use of this

Line 12m. Unpredictable Contingent Event Amount. Line

lookback rule to the Schedule B and label the attachment

12m does not apply to the unpredictable contingent event

“Schedule B, line 12a – Volatility Lookback Rule.”

benefits (and related liabilities) for an event that occurred before

the first plan year beginning after December 31, 1988.

Line 12c. Enter the actuarial value of assets (line 1b(2)),

reduced by the prior year’s credit balance (line 9h). If line 9h

Line 12m(1). Enter the total of all benefits paid during the plan

was determined at a date other than the valuation date, adjust

year that were paid solely because an unpredictable event

the credit balance for interest at the valuation rate to the current

occurred.

valuation date before subtracting. Do not add a prior year’s

Line 12m(4). Amortization of All Unpredictable Contingent

funding deficiency to the assets.

Event Liabilities. Amortization should be based on the “RPA

Line 12d. Funded Current Liability Percentage. Enter the

’94” current liability interest rate (line 6a), using the valuation

actuarial value of the assets expressed as a percentage of

date as the due date. The initial amortization period for each

“RPA ’94” current liability. Enter the result to the nearest .01%

base established in a plan year is generally 7 years; however,

(e.g., 28.72%).

see Code section 412(l)(5) for special rules.

Line 12f. Enter the liability for any unpredictable contingent

Note. An alternative calculation of an unpredictable contingent

event (other than events that occurred before the first plan year

amount is available for the first year of amortization. Refer to

beginning after 1988) that was included in line 12b, whether or

Code section 412(l)(5)(D) for a description. If this alternative

not such unpredictable contingent event has occurred.

calculation is used, include an attachment describing the

-8-

Instructions For Schedule B (Form 5500) - Actuarial Information - 2006 Page 10

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