FAQ 907: Valuation Dates - Changing from BOY to EOY

Problem: How do I convert my BOY valuation to an EOY valuation in ASC?

Solution: Assuming a calendar year plan with a 1/1/2024 BOY valuation date is changing to a 12/31/2024 EOY valuation date, we will provide instructions for traditional DB plans followed by instructions for cash balance plans. Before proceeding, we recommend making a copy of your original BOY valuation date plan as a precautionary backup. --------------------------------------------------------------------- For traditional DB plans: --------------------------------------------------------------------- 1. Save reports for comparison and review to reconcile the results associated with the change in valuation date. 2. Run Calculations > Update to New Period to update the 1/1/2024 BOY valuation to 1/1/2025 BOY valuation. 3. Enter Compensation. Enter 2024 compensation in the 1/1/2025 file. - Optional, update plan specifications for actuarial assumptions, assets, and contributions for the 1/1/2025 BOY valuation results. 4. Run Calculations > Valuation for the 1/1/2025 BOY valuation. On the EE \ Benefits \ ACCRBENF screen, the 1/1/2025 accrued benefit will be stored in the Accrued Benefit field. - Optional, if plan specifications are updated for the 2025 valuation assumptions, assets, and contributions, consider using this file for the 2025 AFTAP. 5. Run Calculations > Update to New Period to update the 1/1/2025 BOY valuation to 1/1/2026 BOY valuation. - The 1/1/2025 accrued benefit is stored in their Prior Accrued Benefit field. - In the Plan Specifications \ Values \ VALPPA screen, a 2025 shortfall payment, if any, is stored in the Amort. Payment 1 year ago field; any 2024 payment in the Amort Payment 2 years ago field, any 2023 payment in the Amort. Payment 3 years ago field, etc. 6. Modify Plan Specifications. - On the General \ Identification \ ID screen, change the plan year dates to 1/1/2025 and 12/31/2025. - Update the limits on the General \ Compensation \ COMPAVG and MAXBEN screens to reflect the 2025 limits for the respective compensation and 415 dollar limits. - On the Funding \ FUNDMETH screen, change Beginning of Year Valuation to No. - On the Funding \ PPAFASMP screen, update the funding segment rates to reflect the 12/31/2025 EOY valuation date. - On the Values \ VALPPA screen, adjust any shortfall payments for the change in valuation date. Delete any value stored in the Amort. Payment 1 year ago field. Move any value in the Amort. Payment 2 years ago field to the Amort. Payment 1 year ago field; any value in the Amort. Payment 3 years ago field to the Amort. Payment 2 years ago field, etc. 7. Enter Compensation. Enter the 2025 compensation in the Basic Data \ COMP \ Current Compensation and Current Annual Compensation Rate fields in the 12/31/2025 file. - For plans with insurance, change the Plan Specification \ ID screen \ Insurance Issue Date to 12/31/2024. 8. Run Calculations > Valuation. Review the 12/31/2025 EOY valuation results. These results will be for the 2026 AFTAP. See FAQ #887 for information on coding ASC for AFTAP calculations on EOY valuations. --------------------------------------------------------------------- For Cash Balance plans: --------------------------------------------------------------------- 1. Save reports for comparison and review to reconcile the results associated with the change in valuation date. 2. Run Calculations > Update to New Period to update the 1/1/2024 BOY valuation to 1/1/2025 BOY valuation. 3. Enter Compensation. Enter 2024 compensation in the 1/1/2025 file. - Optional, update plan specifications for actuarial assumptions, assets, and contributions for the 1/1/2025 BOY valuation results. 4. Run Calculations > Valuation for the 1/1/2025 BOY valuation. The Employee \ Costs \ CASHBAL screen \ Prior Contribution field will be recalculated according to the setting in the Plan Specifications \ Assumptions \ CASHBAL screen \ 'Recalculate prior contributions for BOY val' field. On the Employee \ Benefits \ ACCRBENF screen, the 1/1/2025 accrued benefit will be stored in the Accrued Benefit field based on the cash balance account. - Optional, if plan specifications were updated for the 2025 valuation assumptions, assets, and contributions, consider using this file for the 2025 AFTAP. 5. Run Calculations > Update to New Period to update the 1/1/2025 BOY valuation to the 1/1/2026 BOY valuation. - The 1/1/2025 accrued benefit is stored in the Prior Accrued Benefit field. - In the Plan Specifications \ Values \ VALPPA screen, a 2025 shortfall payment, if any, is stored in the Amort. Payment 1 year ago field; any 2024 payment in the Amort Payment 2 years ago field, any 2023 payment in the Amort. Payment 3 years ago field, etc. -Remove the Employee / Costs / CASHBAL screen / Prior Contribution field. Prior Contribution fields should be blank for EOY valuations. The Earnings and Expected Contribution fields will be calculated during Calculations > Valuation after making the change to the 12/31/2025 EOY valuation. 6. Modify Plan Specifications. - On the General \ Identification \ ID screen, change the plan year dates to 1/1/2025 and 12/31/2025. - Update the limits on the General \ Compensation \ COMPAVG and MAXBEN screens to reflect the 2025 limits for the respective compensation and 415 dollar limits. - On the Funding \ FUNDMETH screen, change Beginning of Year Valuation to No. - On the Funding \ PPAFASMP screen, update the funding segment rates to reflect the 12/31/2025 EOY valuation date. - On the Values \ VALPPA screen, adjust any shortfall payments for the change in valuation date. Delete any value stored in the Amort. Payment 1 year ago field. Move any value in the Amort. Payment 2 years ago field to the Amort. Payment 1 year ago field; any value in the Amort. Payment 3 years ago field to the Amort. Payment 2 years ago field, etc. 7. Enter Compensation. Enter the 2025 compensation in the Basic Data / COMP / Current Compensation and Current Annual Compensation Rate fields in the 12/31/2025 file. - For plans with insurance, change the Plan Specification \ ID screen \ Insurance Issue Date to 12/31/2024. 8. Run Calculations > Valuation. Review the 12/31/2025 EOY valuation results. These results will be for the 2026 AFTAP. See FAQ #887 for information on coding ASC for AFTAP calculations on EOY valuations.