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Old 11-04-2019, 03:05 PM
swipathefox swipathefox is offline
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Default Full funding limitations

General exam conditions state:

"The full funding limitations based on current liability shall be disregarded if sufficient information to determine such limitations is not provided."

Does this mean that if a question does not provide the current liability (and therefore the RPA '94 full funding limit cannot be determined), we can also assume that the ERISA full funding limit does not apply?

Or do we need to calculate the entry age normal AL and NC (for spread gain methods) for every single question that asks for MRC? Looking through the solutions to prior exams, I haven't seen this check applied to any of the MRC questions.
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Old 11-04-2019, 07:49 PM
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Rick_G Rick_G is online now
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Quote:
Originally Posted by swipathefox View Post
General exam conditions state:

"The full funding limitations based on current liability shall be disregarded if sufficient information to determine such limitations is not provided."

Does this mean that if a question does not provide the current liability (and therefore the RPA '94 full funding limit cannot be determined), we can also assume that the ERISA full funding limit does not apply?

Or do we need to calculate the entry age normal AL and NC (for spread gain methods) for every single question that asks for MRC? Looking through the solutions to prior exams, I haven't seen this check applied to any of the MRC questions.
It means exactly what it says - you can ignore "the full funding limitations based on current liability". You do not get a free pass on the ERISA full funding limitation.
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Old 11-04-2019, 11:42 PM
davefarber davefarber is offline
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Originally Posted by Rick_G View Post
It means exactly what it says - you can ignore "the full funding limitations based on current liability". You do not get a free pass on the ERISA full funding limitation.
But just to expand on the last part of the question, in multiemployer minimum funding questions, you are typically given the normal cost and accrued liability -- it is the pure cost method questions that have nothing to do with minimum and maximum where you need to develop these. So for a spread gain minimum funding question, if you are not given the EAN normal cost and accrued liability, you will not have enough information to determine the ERISA full funding limit, so you can ignore it. But if you are given those items, then definitely check the ERISA full funding limit.
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