FAQ 978: DB/DC Combo - Options for allocating DB cost

Problem: Can you briefly describe how the DB cost is allocated in the DC/DB Combo report under each of the available options?

Solution: For a traditional plan, there are 2 options: Allocate the Input Contribution using a)the maximum FT and TNC, or b)the minimum FT and TNC. First, for any inactive employees, status TMIRGD, (FT * vested % + TNC) will be allocated. The amount allocated to them will be subtracted from the Input Contribution and the remainder will be allocated to active employees, status ABC, as follows: (EE FT + EE TNC) * (Contribution being allocated)/(Total FT + Total TNC for all includible active employees) For a cash balance plan, the above options plus two additional options are now available: Input Contribution/Account Balance, and Expected contribution. If you choose Expected contribution, the DB cost for an employee will be the value in his/her Expected Contribution field on the CASHBAL screen. For TMI status employees, the vested percent will be applied. If you choose Input Contribution, enter a value and choose Account Balance, the Input Contribution amount will be allocated based on the employee cash balance accounts. For an EOY plan: (EE Prior Balance + Earnings + Expected Contribution)*(Input Contribution/Total of the same fields for all includible EEs) For a BOY plan: (EE Prior Balance + Prior Contribution + Earnings + Expected Contribution)*(Input Contribution/Total of the same fields for all includible EEs)