Editor’s Note: The CARES Act gave sponsors the option of using the adjusted funding target attainment percentage for the last plan year ending before January 1, 2020.
Contributions to certain defined benefit plans (other than multiemployer or CSEC plans) subject to the minimum funding standard ( Q 3742 to Q 3748) must be made, on an estimated basis, at least quarterly, and the new mortality tables released by the IRS on October 3, 2017 will impact these calculations. The quarterly contribution requirement is imposed on plans with a funding shortfall in the prior year.1
The required amount for each quarterly installment is 25 percent of the Required Annual Payment (“RAP”).2 The RAP is the lesser of the following:
(1) 90 percent of the minimum required contribution amount the employer is required to contribute for the plan year under the minimum funding requirements; and