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Your Actuarial Valuation Report FAQs

Your Actuarial Valuation Report

  • You may make contributions that are assigned to a given plan year anytime between the first day of that plan year and 8 ½ months after the end of that plan year. This “assignment” of contributions by plan year is used for purposes of tax deductions and determining how well funded the plan is. Some of the contributions on your plan’s account statement might have been assigned to the prior plan year, and there may also be “receivable” contributions that don’t yet appear on the year-end account statement. We use the contributions assigned to a plan year for the Actuarial Valuation rather than those deposited during the plan year (if different).

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  • Contributions made after the date of the Actuarial Valuation may be included in plan assets. They are counted at full value for purposes of the “market value of assets” for Form 5500 reporting. However, for purposes of determining contribution requirements, contributions made after the date of the valuation included in the “actuarial value of assets” are required by law to be discounted from the date deposited to the date of the valuation. For this reason, the actuarial value of assets is often slightly lower than the market value of assets.

    In certain circumstances, other adjustments are also permitted to the actuarial value of assets. If that is the case for your plan, you will see additional pages in your report detailing those adjustments.

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  • Generally, these amounts were the same before passage of Moving Ahead for Progress in the 21st Century Act (“MAP-21”), a law containing pension funding relief rules, and a series of similar laws. These laws provided relief to Plan Sponsors in an environment of increasing minimum required contributions by changing the way the Funding Target for Minimum Required Contribution is calculated. The law change did not affect the calculation of the Funding Target for Maximum Deductible Contribution.

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  • The Actuarial Valuation is an important document to support the tax deduction taken on your business’s tax return and to show minimum require contributions have been met. You should save a copy with your other tax documents; you would likely need to produce it in the event your business tax return or plan is ever audited. Industry practice standards require that we disclose all assumptions used and that we illustrate our calculations sufficiently such that our results could be fully reproduced given the necessary historical employee data – thus the numerous exhibits at the back of the report. We do, however, try to summarize the key points for you in the first few pages so that you do not necessarily need to review all of the exhibits.

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