ASM Course Outline Question #52

[Lane Meyers]

Need a little help. For those without the outline, the question deals with the 4010 filing.

Relevant info as follows:

Plan A - Vested CL - 300mm
MVA - 100mm
AVA - 120mm
CB - 6mm

Plan B - Vested CL - 200mm
MVA - 210mm
AVA - 190mm
CB - 12mm

Plan C - Vested CL - 700mm
MVA - 300mm
AVA - 340mm
CB - 1mm

No info is given with regards to minimum funding waivers or liens so I'm presuming they are not applicable.

From the info given, we know:

Plan A UVB - 200mm
Plan B UVB - N/A
Plan C UVB - 400mm
Total UVB - 600mm

The question asks "What is the minimum additional contribution that could be made to Plan C for 2003 in order to avoid the information gathering requirement for 2004 under ERISA section 4010?"

The 4010 filing applies if the aggregate UVB is greater than 50mm.

The answer shows the UVB that I showed above and then states "Therefore, if an additional $100,000,000 were contributed to Plan C, the information reporting would not be required for 2004."

How did DF come up with $100,000,000? Maybe my brain has finally snapped or I am missing some completely obvious, but I'm just not getting it.

[PosterNutBag]

I don't have the ASM Course Outline, but if everything you said is exactly as it appears in the problem then I would have to agree with you.

Based on the information you presented, no amount contributed to plan C would prevent this company from having to file under ERISA Section 4010 since if Plan C had a UVB of zero, then the total UVB for the company for purposes of the 4010 filing would still be $200 million from plan A.

Either you are not presenting all the information in the problem or this is one that Farber wrote at 2:00am one night. I just looked on the website and there is no errata covering this one. I would send him an email asking him about it. Please post your findings here.

[Lane Meyers]

FYI - The numbers were all off by a factor of 10. The total UVB is actually 60mm, so an additional 10mm contribution to Plan C is needed.