| FAQ 860: PPA Minimum Report - why don't the carryover and prefunding balances show as credits on the report? |
I entered the carryover and prefunding balances on the Costs/CONTRIB screen, but they do not show up as credits on the Minimum Contribution Report. Why?
The carryover and prefunding balances can be used as credits toward the minimum contribution only if the funding ratio in the prior plan year is at least 80%.
The prior year funded ratio is equal to (the actuarial value of assets less the prefunding balance) divided by the funding target, all in the prior plan year.
For 2008 plan years, this percentage is the 2007 actuarial value of assets divided by the 2007 RPA current liability. For 2008 plan years, you must enter the prior year funded percentage in the Prior funded percent for 430(f)(3) field on the Values \ VALPPA screen in the plan specifications.
In subsequent years, this field will be populated in the Calculations > Update to New Period routine.
The carryover balance will only be shown as a credit on the minimum report if the Prior funded percent for 430(f)(3) field is at least 80%.
The prefunding balance will only be shown as a credit on the minimum report if both:
a) the Prior funded percent for 430(f)(3) field is at least 80%, AND
b) the PPA PFB Used for Minimum spec on the FUNDMETH screen is coded Yes