Pension funding valuations, Schedule SB and PBGC premiums

Optimizing Foundations performs the funding valuations that single-employer defined benefit plans require each year: the minimum required contribution and maximum deductible contribution under Section 430, the Schedule SB and AFTAP certification signed by an Enrolled Actuary, the PBGC comprehensive premium filing and the contribution planning that sits around them.

What is included

• Funding valuation. Funding target and target normal cost at the segment rates, shortfall amortization, prefunding and carryover balances, the quarterly contribution schedule and the contribution range for the year.
• Schedule SB and AFTAP. The Schedule SB for Form 5500, the AFTAP certification by the deadline, and benefit restriction analysis and participant notices where the plan is below the thresholds.
• PBGC premiums. The comprehensive premium filing, flat-rate and variable-rate, the unfunded vested benefits calculation and the per-participant cap, with planning around the premium where contributions can reduce it.
• Contribution planning. Projections of required and deductible contributions over several years under interest rate and asset return scenarios, credit balance elections and the timing decisions that affect cash and the premium.
• Participant work. Benefit calculations, relative value disclosures, annual funding notices and benefit statements.

How the work runs

The year begins with a data request keyed to last year's census. Data is reconciled person by person and to the trust. Preliminary results are reviewed with the finance team before anything is signed, so that a change in the required contribution is discussed rather than discovered. A second credentialed actuary reviews the valuation. The firm's compliance calendar on the resources page shows the deadlines for any plan year.

Taking over a plan

A transition from another actuary involves reconciling the prior results, matching the funding target and the credit balances and documenting any differences in method. Most transitions complete within one valuation cycle, and the prior actuary's work is reviewed as part of it.

Common questions

Can the firm reduce the PBGC variable-rate premium? Often. Contributions made before the premium snapshot date, the timing of credit balance elections and, for some plans, the choice of the standard or alternative premium funding target all affect it. The firm models the options each year.

What if the sponsor cannot make the minimum contribution? The options include a funding waiver application, use of credit balances where available and a review of the plan's future. The firm advises before the deadline passes, not after.

Every deliverable described here is reviewed by a second credentialed actuary before delivery. This page is general information about the firm's services and is not advice for any specific plan.