Additional Contributions & Maximum 420 Transfers (U.S. qualified mode) or Additional Contributions (other modes)

This is the U.S. qualified mode topic title. In all other modes, this topic is simply entitled “Additional Contributions”. “420 Transfers” refers to a qualified transfer of excess pension assets from plan funds earmarked for pension benefits to a separate health benefits account to the extent permitted under the provisions of the U.S. Internal Revenue Code (IRC) Section 420. (For guidance, see the applicable sections of the Internal Revenue Code and related Regulations, IRS Notices, Revenue Rulings and Revenue Procedures.)

Under this topic, you specify the assumed experience of the plan’s assets, over the period of the stochastic forecast, with respect to cash flow elements other than benefit payments, expenses paid from plan funds, employee contributions (if any) and employer contributions anticipated by the contribution policy, leaving as the possible “ins” and “outs” only employer contributions in excess of the amount determined by the employer Contribution Policy parameter of the Contribution Policy topic of your Asset & Funding Policy and plan fund transfers per IRC section 420.

For details about coding the parameters of this topic, see the discussion under the Additional Contributions & 420 Transfers topic of the Deterministic Assumptions command. Coding is done in the same manner and the contribution and transfer amounts entered are treated in the same manner, except that, in a stochastic forecast, the Maximum 420 Transfers before price inflation parameter amounts entered are first adjusted for price inflation, up through the forecast Year for which the amount is entered, before the maximum amount that can be transferred is determined.