Instructions For Schedule B (Form 5500) - Actuarial Information

calculation and label the schedule “Schedule B, line 9c –

(increased with interest at the valuation rate to the first day of

Deferral of Charge for Portion of Net Experience Loss.”

the current plan year) and line 9f, both from the prior year’s

Schedule B (Form 5500).

Line 9c(2). Amortization for funding waivers must be based on

Line 9q(2). The accumulation of additional interest charges

the interest rate provided in Section 412(d) (“mandated rate”).

due to late or unpaid quarterly installments for prior plan years

Line 9d. Interest as Applicable. Interest as applicable should

must be included. Enter the sum of line 9q(2) (increased with

be charged to the last day of the plan year. The mandated rates

interest at the valuation rate to the first day of the current plan

must be used when calculating interest on any amortization

year) and line 9e, both from the prior year’s Schedule B (Form

charges for funding waivers.

5500).

Line 9e. If the funded current liability percentage for the

Line 9q(3)(a). If a waived funding deficiency is being amortized

preceding year reported in line 4a is at least 100%, quarterly

at an interest rate that differs from the valuation rate, enter the

contributions are not required for the current plan year.

prior year’s “reconciliation waiver outstanding balance”

Interest is charged for the entire period of underpayment.

increased with interest at the valuation rate to the current

Refer to IRS Notice 89-52, 1989-1 C.B. 692, for a description of

valuation date and decreased by the year end amortization

how this amount is calculated.

amount based on the mandated interest rate. Enter the

Note. Notice 89-52 was issued prior to the amendment of

amounts as of the valuation date. Also, include in this line

section 412(m)(1) by the Revenue Reconciliation Act of 1989.

reconciliation amounts due to extensions of amortization

Rather than using the rate in the Notice, the applicable interest

periods that have been approved by the IRS.

rate for this purpose is the greater of:

Line 9q(4). Enter the sum of lines 9q(1), 9q(2), and 9q(3)(b)

1. 175% of the Federal mid-term rate at the beginning of the

(each adjusted with interest at the valuation rate to the current

plan year,

valuation date, if necessary).

2. The rate used to determine the “RPA ’94” current liability,

Note. The net outstanding balance of amortization charges and

credits minus the prior year’s credit balance minus the amount

3. The valuation rate.

on line 9q(4) (each adjusted with interest at the valuation rate, if

necessary) must equal the unfunded liability.

All other descriptions of the additional interest charge

contained in Notice 89-52 still apply.

Line 10. Contribution Necessary to Avoid Deficiency. Enter

the amount from line 9p. However, if the alternative funding

Line 9f. Enter the required additional funding charge from line

standard account is elected and the accumulated funding

12q. Check “N/A” if line 12 is not applicable.

deficiency under that method is smaller than line 9p, enter such

Note. If an election was made under Code section 412(l)(12) to

amount (also see instructions for line 8b). For multiemployer

reduce the amount of contributions required under Code section

plans in reorganization, see the instructions for line 8b. File

412(l)(1) (determined without regard to Code section 412(l)(12),

Form 5330 with the IRS to pay the 10% excise tax (5% in the

include an attachment describing this calculation and label the

case of a multiemployer plan) on the funding deficiency.

schedule “Schedule B, line 9f – Alternative Deficit

Note. See Special Instructions for Plans Utilizing Alternative

Reduction Contribution.”

17-Year Funding Schedule for Airlines on page 9.

Line 9h. Note that the credit balance or funding deficiency at

Line 11. In accordance with ERISA section 103(d)(3), attach a

the end of “Year X” should be equal to the credit balance or

justification for any change in actuarial assumptions for the

funding deficiency at the beginning of “Year X+1.” If such credit

current plan year and label the attachment “Schedule B, line

balances or funding deficiencies are not equal, attach an

11 – Justification for Change in Actuarial Assumptions.”

explanation and label the attachment “Schedule B, line 9h –

The preceding sentence applies for all plans.

Explanation of Prior year Credit Balance/Funding

Deficiency Discrepancy.” For example, if the difference is

The following instructions are applicable only to changes in

because contributions for a prior year that were not previously

current liability assumptions for plans (other than multiemployer

reported are received this plan year, attach a listing of the

plans) subject to Title IV of ERISA that resulted in a decrease in

amounts and dates of such contributions.

the unfunded current liability (UCL). If the current liability

assumptions (other than a change in the assumptions required

Line 9l(1). ERISA Full Funding Limitation. Instructions for

under Code section 412(l)(7)(C)) were changed for the current

this line are reserved pending published guidance.

plan year and such change resulted in a decrease in UCL,

Line 9l(2). “RPA ’94” Override. Instructions for this line are

approval for such a change may be required. However, if one of

reserved pending published guidance.

the following three conditions is satisfied with respect to a

Line 9l(3). Full Funding Credit. Enter the excess of (1) the

change in assumptions for a plan year, then the plan sponsor is

accumulated funding deficiency, disregarding the credit balance

not required to obtain approval from the IRS for such change(s):

and contributions for the current year, if any, over (2) the

Condition 1: Aggregate Unfunded Vested Benefits

greater of lines 9l(1) or 9l(2).

The aggregate unfunded vested benefits as of the close of

Line 9m(1). Waived Funding Deficiency Credit. Enter a

the plan year preceding the year in which assumptions were

credit for a waived funding deficiency for the current plan year

changed (as determined under section 4006(a)(3)(E)(iii) of

(Code section 412(b)(3)(C)). If a waiver of a funding deficiency

ERISA) for the plan, and all other plans maintained by

is pending, report a funding deficiency. If the waiver is granted

contributing sponsors (as defined in section 4001(a)(13) of

after Form 5500 is filed, file an amended Form 5500 with an

ERISA) and members of such sponsor’s controlled group (as

amended Schedule B to report the funding waiver (see page 6

defined in section 4001(a)(14) of ERISA) which are covered by

of the Instructions for Form 5500).

Title IV of ERISA (disregarding plans with no unfunded vested

Line 9m(2). Other Credits. Enter a credit in the case of a plan

benefits) is less than or equal to $50 million.

for which the accumulated funding deficiency is determined

Condition 2: Amount of Decrease in UCL

under the funding standard account if such plan year follows a

The change in assumptions (other than a change required

plan year for which such deficiency was determined under the

under Code section 412(l)(7)(C)) resulted in a decrease in the

alternative minimum funding standard.

UCL of the plan for the plan year in which the assumptions

Line 9q. Reconciliation Account. The reconciliation account

were changed of less than or equal to $5 million.

is made up of those components that upset the balance

Condition 3: Amount of Decrease in UCL, and CL Before

equation of Treasury Regulation section 1.412(c)(3)-1(b).

Change in Assumptions

Valuation assets should not be adjusted by the reconciliation

account balance when computing the required minimum

Although the change in assumptions (other than a change

funding.

required under Code section 412(l)(7)(C)) resulted in a

Line 9q(1). The accumulation of additional funding charges for

decrease in the UCL of the plan for the plan year in which the

prior plan years must be included. Enter the sum of line 9q(1)

assumptions were changed which was greater than $5 million

-7-

Instructions For Schedule B (Form 5500) - Actuarial Information - 2006 Page 9

Related Articles

Related forms

Related Categories