Instructions For Schedule B (Form 5500) - Actuarial Information

Note. Use the above formula even if the actuary feels that the

3. Excess, if any, of the value of accrued benefits over the

result of using the formula does not represent the true

market value of assets.

estimated rate of return on the current value of plan assets for

4. Interest on 1, 2, and 3 above.

the 1-year period ending on the valuation date. The actuary

5. Employer contributions (total from columns (b) of line 3 of

may attach a statement showing both the actuary’s estimate of

Schedule B).

the rate of return and the actuary’s calculations of that rate, and

6. Interest on 5 above.

label the statement “Schedule B, line 6j – Estimated Rate of

7. Funding deficiency: if the sum of 1 through 4 above is

Investment Return (Current Value).”

greater than the sum of 5 and 6 above, enter the difference.

Line 7. New Amortization Bases Established. List all new

If the entry age normal cost method was not used as the

amortization bases established in the current plan year (before

valuation method, the plan may not switch to the alternative

the combining of bases, if bases were combined). Use the

minimum funding standard account for this year. Additionally, in

following table to indicate the type of base established, and

line 3 of the worksheet, the value of accrued benefits should

enter the appropriate code under “Type of Base.” List

exclude benefits accrued for the current plan year. The market

amortization bases and charges and/or credits as of the

value of assets should be reduced by the amount of any

valuation date. Bases that are considered fully amortized

contributions for the current plan year.

because there is a credit for the plan year on line 9l(3) should

Reorganization Status: Attach an explanation of the basis for

be listed. If entering a negative number, enter a minus sign “ – ”

the determination that the plan is in reorganization for this plan

to the left of the number.

year and label the explanation “Schedule B, line 8b –

Reorganization Status Explanation.” Also, attach a

Code Type of Amortization Base

worksheet showing for this plan year:

Experience gain or loss

1. The amounts considered contributed by employers,

Shortfall gain or loss

2. Any amount waived by the IRS,

Change in unfunded liability due to plan amendment

3. The development of the minimum contribution

requirement (taking into account the applicable overburden

Change in unfunded liability due to change in

credit, cash-flow amount, contribution bases and limitation on

actuarial assumptions

required increases on the rate of employer contributions), and

Change in unfunded liability due to change in

4. The resulting accumulated funding deficiency, if any,

actuarial cost method

which is to be reported on line 9p.

Waiver of the minimum funding standard

Label the worksheet “Schedule B, line 8b – Reorganization

Switchback from alternative funding standard

Status Worksheet.”

account

Initial unfunded liability (for new plan)

Line 8c. All multiemployer plans check “No.” Plans other than

multiemployer plans check “Yes” only if (a) the plan is covered

by Title IV of ERISA and (b) the plan has active participants.

If line 8c is “Yes,” attach a schedule of the active plan

Line 8a. Funding Waivers or Extensions. If a funding waiver

participant data used in the valuation for this plan year. Use the

or extension request is approved after the Schedule B is filed,

same size paper as the Schedule B and the format shown on

an amended Schedule B should be filed with Form 5500 to

the following page and label the schedule “Schedule B, line 8c

report the waiver or extension approval (also see instructions

– Schedule of Active Participant Data.”

for line 9m(1)).

Expand this schedule by adding columns after the “5 to 9”

Line 8b. Alternative Methods or Rules. Enter the appropriate

column and before the “40 & up” column for active participants

code from the table below if one or more of the alternative

with total years of credited service in the following ranges: 10 to

methods or rules were used for this plan year.

14; 15 to 19; 20 to 24; 25 to 29; 30 to 34; and 35 to 39. For

each column, enter the number of active participants with the

Code Method or Rule

specified number of years of credited service divided according

Shortfall method

to age group. For participants with partial years of credited

service, round the total number of years of credited service to

Alternative funding standard account (AFSA)

the next lower whole number. Years of credited service are the

Shortfall method used with AFSA

years credited under the plan’s benefit formula.

Plan is in reorganization status

Plans reporting 1,000 or more active participants on line

Shortfall method used when in reorganization status

2b(3) must also provide average compensation data. For each

Alternative 17-Year Funding Schedule for Airlines

grouping, enter the average compensation of the active

participants in that group. For this purpose, compensation is the

Note. For Code 6, see Special Instructions for Plans

compensation taken into account for each participant under the

Utilizing Alternative 17-Year Funding Schedule for Airlines

plan’s benefit formula, limited to the amount defined under

on page 9.

section 401(a)(17) of the Code. Do not enter the average

compensation in any grouping that contains fewer than 20

Shortfall Method: Only certain collectively bargained plans

participants.

may elect the shortfall funding method (see regulations under

Code section 412). Advance approval from the IRS for the

Cash balance plans (or any plans using characteristic code

election of the shortfall method of funding is NOT required if it is

1C on line 8a of Form 5500), reporting 1,000 or more active

first adopted for the first plan year to which Code section 412

participants on line 2b(3) must also provide average cash

applies. However, advance approval from the IRS is required if

balance account data, regardless of whether all active

the shortfall funding method is adopted at a later time, if a

participants have cash balance accounts. For each age/service

specific computation method is changed, or if the shortfall

bin, enter the average cash balance account of the active

method is discontinued.

participants in that bin. Do not enter the average cash balance

account in any age/service bin that contains fewer than 20

Alternative Minimum Funding Standard Account: A

active participants.

worksheet must be attached if the alternative minimum funding

standard account is used and be labeled “Schedule B, line 8b

General Rule. In general, data to be shown in each age/

– Alternative Minimum Funding Standard Account.” The

service bin includes:

worksheet should show:

1. the number of active participants in the age/service bin,

1. The prior year alternate funding deficiency (if any).

2. the average compensation of the active participants in

2. Normal cost.

the age/service bin, and

-5-

Instructions For Schedule B (Form 5500) - Actuarial Information - 2006 Page 7

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