I just got the email from ASPPA with the conference brochure. This meeting will be in Atlanta, GA on January 15-16, 2009:
http://www.asppa.org/archive/conf/2009/2009bcos.htm
Looks like I’ll be on the podium with Jim Holland to talk about “PPA 06 Funding Issues”. Darn, instead of 2 days to cover the topic, we only have 1 hour and 15 minutes!
A few students have pointed out that some of my practice problems are not 100% clear. Well, yeah, DUH – this is PPA 2006 we’re talking about, right?!
The issue has to do with IRC 430 and single employer plans. When determining the exemption from establishing a shortfall amortization base, a plan may be able to use an applicable percentage that is less than 100%.
IRC 430(c)(5) has several criteria the plan must meet. One of them is that the plan was not subject to the 412(l) Deficit Reduction Contribution in 2007. In some of my practice problems, I make this statement: “The 412(l) Deficit Reduction Contribution for 2007 is zero”. But that is not necessarily the same as saying that “the plan was not subject to the 412(l) Deficit Reduction Contribution in 2007”.
It is definitely possible for a plan to be subject to 412(l) in 2007, and yet the value of the DRC is zero. You are supposed to interpret the statement in the problem about a zero DRC to also imply that the plan was not subject to 412(l).
Based on my review of the 2007 exam, they avoided any potentially unclear language on the exam problems. Next year, I will clarify the language in my practice problems.
PRACTICAL NOTE
There is additional detail in the proposed regualtion on this idea. It states that the transition rule “does not apply to a plan … that was subject to 412(l) for the pre-effective year ….” The regulation makes it clear that a plan can be subject to 412(l), and also have a zero DRC.
The proposed regulations are not on the EA-2A syllabus. In 2008, the EA-2A exam questions have to be based solely on the Internal Revenue Code. You should not worry about details in the proposed regulation.
I have gotten emails from several students asking about the 414(l) / 415 / 416 questions on prior EA-2B exams.
There is no need to look at any old 414(l) questions. Most of the problems test stuff that was on the EA-2B syllabus, but that material is NOT on the EA-2A syllabus.
For 415 questions, ALL of the EA-2B questions are based on the old 415 regulation – so don’t bother looking at those. I will be revising / creating new 415 practice problems.
You can look at the EA-2B problems on 416 for years 2002-2007. Prior to 2002, the 416 problems were based on old rules that were changed by EGTRRA in 2001.