FAQ 1123: PBGC Vested Premium Funding Targets for EOY vals - Which Vesting Field is Used?

Problem: For EOY valuations in ASC, why is the Prior Vested Percent used for the calculation of a participant's PBGC vested premium funding target? How can I override this to use the current Vested Percent as of the valuation date instead?

Solution: Solution: For EOY valuations, the ASC System calculates the PBGC vested premium funding target using the accrued benefit and vested percent as of the beginning of the lookback year. This approach consistently uses the vesting and accrued benefit as of the same date and generally would result in a lower PBGC Vested Funding Target used to determine the variable premium. The PBGC has indicated that it will accept either prior or current vesting for EOY valuations as long as the method is applied consistently. The following workaround can be used to apply the current Vested Percent as of the valuation date to the PBGC Funding Target. These instructions will override the values stored in their Prior Vested Percent fields. If you need to save their existing values, you may use Grids and Set Column Data to store it in an unused field in Employee \ Basic Data \ ADDRESS \ User Fields. 1. Create an Employee > Grid > with Name, Prior Vested Pct, and Vested Percent fields. 2. Select Grid > Set Column Data. 3. In the screen that opens, select Prior Vested Pct in the first dropdown; set From to “Data File” and use the spyglass to select the Vested Percent field and click “OK” and Yes to confirm. 4. Once their Prior Vested Pct has been updated, run Calculations > Valuation to update the results. Note, during calculations, participants' Prior Vested Pct is not recalculated. Prior Vested Pct fields are only updated by ASC during the Update to New Period routine or with a manual override. Consider creating an internal note regarding the method to determine the vesting percent used to help ensure a consistent method is applied.