Source: https://www.pbgc.gov/prac/other-guidance/tu/technical-update-12-2-effect-map-21-4010-reporting
Timestamp: 2019-04-20 10:46:31+00:00

Document:
This Technical Update 12-2 provides PBGC guidance on the effect of the Moving Ahead for Progress in the 21st Century Act (MAP-21) on annual financial and actuarial reporting under section 4010 of ERISA and part 4010 of PBGC’s regulations.1 This Technical Update supersedes any inconsistent guidance in PBGC’s 4010 filing instructions.
Effective beginning in 2012, section 40211 of MAP-21 establishes stabilization rules that limit the volatility of certain discount rates used for funding purposes by constraining them within a corridor.
Section 40211(b)(3)(D) of MAP-21 amended ERISA section 4010 by adding paragraph (d)(3) to provide that the stabilization rules do not apply for purposes of determining the funding target or funding target attainment percentage (FTAP) required to be reported under ERISA section 4010(d).
The FTAP (for the plan year ending within that information year) of each plan maintained by the person's controlled group, determined without regard to the MAP-21 stabilization rules, would be at least 80 percent if the value of plan assets used for minimum funding purposes were substituted for the value described in Q&A NA-3 of IRS Notice 2012-61.
4010 funding shortfall. Section 4010.11(c) of PBGC’s regulations defines the 4010 funding shortfall as the excess, if any, of the funding target over the actuarial value of assets. Under §4010.11(a), reporting triggered by having an FTAP below 80 percent is waived if the aggregate 4010 funding shortfall for the controlled group does not exceed $15 million. In addition, under § 4010.8(c), a plan is exempt from reporting actuarial information if, among other criteria, it has a 4010 funding shortfall that does not exceed $15 million. For these purposes, the 4010 funding shortfall is to be determined using the same assumptions and asset value used for minimum funding purposes.
Certain actuarial information requirements. Section 4010.8 of PBGC’s regulations provides a list of actuarial information required to be reported. ERISA section 4010(d)(3) does not apply to those items that are solely a product of PBGC regulation, such as the requirement in §4010.8(a)(11) to provide actuarial valuation report information including funding target, target normal cost, amortization bases, etc. Thus, the data to be reported under §4010.8(a)(11) are the amounts used to determine the minimum funding requirement for the plan year ending within the information year, regardless of whether such amounts were determined using stabilized discount rates. Similarly, the plan’s Adjusted Funding Target Attainment Percentage (AFTAP) required to be reported under §4010.8(a)(7) is the AFTAP used to determine whether benefit restrictions applied for the plan year ending within the information year, regardless of whether stabilized discount rates were used to determine such percentage.
For questions about this Technical Update 12-2, contact Ellen Itkin of the Corporate Finance and Restructuring Department at 202-326-4070 ext. 3075 or itkin.ellen@pbgc.gov or Amy Viener of the Policy, Research and Analysis Department at (202) 326‑4080, ext. 3919, or viener.amy@pbgc.gov.
1 See 4010 Reporting on PBGC’s website.
2 Thus, the FTAP used for purposes of the 80% Gateway Test might not be the same as the FTAP reported on line 14 of the Schedule SB of Form 5500.
3 The FTAP, which is defined in ERISA 303, applies to certain Code and Title I requirements as well as to ERISA section 4010.
4 ERISA section 4010(b)(2) deals with the requirement to report based on the existence of a statutory lien resulting from missed required contributions of over one million dollars. ERISA section (b)(3) deals with the requirement to report based on outstanding funding waivers exceeding the same amount. See § 4010.4(a)(2) and (a)(3) of PBGC’s regulations.

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