Items to be covered today.. System Enhancements for Schedule SB - PDF document

DB System Enhancements for Schedule SB 4/16/2009 Defined Benefit System Enhancements: Schedule SB, Discounting Contributions, Carry Over and Pre-Funding Aaron Venouziou, EA John Baratka, EA Dave Roper Sue Evans, EA 1 Items to be covered today….. � System Enhancements for Schedule SB – “Discounting Contributions” Worksheet � Examples � Printouts – Rate of Return (ROR) Calculator � Examples � Updating for 2009 Valuations – Carry Over Balance (COB) – Pre-Funding Balance (PFB) 2 (c) 2009 DATAIR 1

DB System Enhancements for Schedule SB 4/16/2009 “Discounting Contributions” Worksheet � Example #1 – No quarterly contribution requirements, no prior year credit balance (CB) or funding deficiency � Example #2 – Quarterly contributions (some late, some on time) � Example #3 – Utilization of the CB for satisfying quarterly contribution requirements � Example #4 – EOY vs. BOY valuation date � Exceptions 3 Discounting Contributions Worksheet � Example #1 – No quarterly contribution requirements, no prior year credit balance (CB) or funding deficiency � Values from current year valuation report Minimum contribution (Valuation Results – C6, $87,997 ) – Effective Interest Rate (Valuation Results – Top of Page 1, 5.92% ) – Prior year credit balance at the beginning of the year (Valuation – Results – A5, $50,783 ) � Values from prior year valuation report Prior year minimum contribution (Valuation Results – C6) – Prior year funded status (Valuation Results – Funded current liability – percentage is greater than 100%) 4 (c) 2009 DATAIR 2

DB System Enhancements for Schedule SB 4/16/2009 Current Year Valuation Results 5 Current Year Valuation Results 6 (c) 2009 DATAIR 3

DB System Enhancements for Schedule SB 4/16/2009 Discounting Worksheet: Example 1 7 Discounting Worksheet: Example 1 8 (c) 2009 DATAIR 4

DB System Enhancements for Schedule SB 4/16/2009 Discounting Worksheet: Example 1 9 Discounting Worksheet: Example 1 10 (c) 2009 DATAIR 5

DB System Enhancements for Schedule SB 4/16/2009 Discounting Worksheet: Example 1 11 Discounting Contributions Worksheet � Example #2 – Quarterly contributions (some late, some on time) � Quarterly Requirement $19,799 � Enter dates and amounts of contributions made to date � Entering more than the minimum required contribution 12 (c) 2009 DATAIR 6

DB System Enhancements for Schedule SB 4/16/2009 Carry Over Balance 13 Discounting Worksheet: Example 2 14 (c) 2009 DATAIR 7

DB System Enhancements for Schedule SB 4/16/2009 Discounting Worksheet: Example 2 15 Discounting Worksheet: Example 2 16 (c) 2009 DATAIR 8

DB System Enhancements for Schedule SB 4/16/2009 Discounting Worksheet: Example 2 17 Discounting Worksheet: Example 2 18 (c) 2009 DATAIR 9

DB System Enhancements for Schedule SB 4/16/2009 Discounting Contributions Worksheet � Example #3 – Utilization of the CB for satisfying quarterly contribution requirements � Enter the CB on the last day of the 2007 plan year (Valuation Results – A5, $50,783) � Indicate whether or not to apply all or any portion of the CB to the current year contribution requirements � If yes, enter the dates and amounts of the CB to apply based on the prior year contributions that created and/or increased the CB 19 Discounting Worksheet: Example 3 20 (c) 2009 DATAIR 10

DB System Enhancements for Schedule SB 4/16/2009 Discounting Worksheet: Example 3 21 Discounting Worksheet: Example 3 22 (c) 2009 DATAIR 11

DB System Enhancements for Schedule SB 4/16/2009 Discounting Worksheet: Example 3 23 Discounting Worksheet: Example 3 24 (c) 2009 DATAIR 12

DB System Enhancements for Schedule SB 4/16/2009 Discounting Contributions Worksheet � Example #4 – EOY vs. BOY valuation date � Note that the discounted contributions are at the valuation date 25 Discounting Worksheet: Example 4 26 (c) 2009 DATAIR 13

DB System Enhancements for Schedule SB 4/16/2009 Discounting Worksheet: Example 4 27 Discounting Worksheet: Example 4 28 (c) 2009 DATAIR 14

DB System Enhancements for Schedule SB 4/16/2009 Discounting Worksheet: Example 4 29 Discounting Worksheet: Example 4 30 (c) 2009 DATAIR 15

DB System Enhancements for Schedule SB 4/16/2009 Rate of Return Calculator � Where to find it – Utilities Menu (B) – Rate of Return (F) � How to Use it – Add/Change Plan – Period and Asset Values – Transactions � Money In: Contributions, Surrendered Insurance, Rollovers � Money Out: Benefit Payments, Insurance Premiums, Return of Excess – Viewing/Printing the Results 31 Rate of Return Calculator Old IRS method of determining the ROR is out ! New cash basis method is in ! Enter the cash basis, asset value at the beginning of the year. 1. Do not include contributions receivable for the previous plan year. Enter dates and amounts of contributions made during the year. 2. Be sure to include amounts contributed during the year that were for the previous plan year. Enter dates and amounts of distributions made during the year. 3. 4. Enter the asset value at the end of the year. Do not include contributions receivable for the year . 32 (c) 2009 DATAIR 16

DB System Enhancements for Schedule SB 4/16/2009 Rate of Return Calculator 33 Rate of Return Calculator 34 (c) 2009 DATAIR 17

DB System Enhancements for Schedule SB 4/16/2009 Rate of Return Calculator 35 Rate of Return Calculator 36 (c) 2009 DATAIR 18

DB System Enhancements for Schedule SB 4/16/2009 Rate of Return Calculator 37 Rate of Return Calculator 38 (c) 2009 DATAIR 19

DB System Enhancements for Schedule SB 4/16/2009 Rate of Return Calculator 39 Updating for 2009 Valuations � Carry Over Balance � Pre-Funding Balance � Beginning of Year Valuation Date � End of Year Valuation Date 40 (c) 2009 DATAIR 20

DB System Enhancements for Schedule SB 4/16/2009 Carry Over Balance Components for the Calculation � D41 = Credit balance at the end of the prior plan year � S180 = Rate of Return � S611 = Portion of the prior year credit balance to be used for the current year minimum contribution requirement 41 BOY Valuation Date Carry Over Balance Carry Over Balance at BOY Amount Used for Current Year Net Carry Over Balance at BOY (1 + Rate of Return) New Carry Over Balance 42 (c) 2009 DATAIR 21

DB System Enhancements for Schedule SB 4/16/2009 EOY Valuation Date Carry Over Balance Carry Over Balance at BOY (1 + Effective Interest Rate) End of Year Carry Over Balance Amount Used for Current Year Net Carry Over Balance at EOY (1 + Effective Interest Rate) Net Carry Over Balance at BOY (1 + Rate of Return) 43 New Carry Over Balance Carry Over Balance ROR 44 (c) 2009 DATAIR 22

DB System Enhancements for Schedule SB 4/16/2009 45 46 (c) 2009 DATAIR 23

DB System Enhancements for Schedule SB 4/16/2009 47 (c) 2009 DATAIR 24