These parameters further define the actual employer contribution developed from the specified actuarial cost method and employer contribution policy.

You may specify an Additional Contribution for the current plan year (in a forecast, the baseline year). ProVal adds this amount to that determined by the Contribution Policy parameter, and to any amount computed to meet a funding target indicated by the Calculate end of year additional contribution parameter of the Forecast Analysis topic, to derive the total employer contribution paid for the year. In the U.S. qualified and Canadian registered pension modes, ProVal will reduce this total contribution amount as necessary to avoid payment of a contribution in excess of the maximum tax deductible amount for the year (for the tax year, in the U.S. qualified mode). Note that if a Contribution Schedule is reflected, ProVal will add the specified additional contribution to the amount entered in the schedule to derive the total employer contribution paid for the year (in a forecast, for the baseline year), subject to the maximum tax deductible limit on the contribution amount for the tax year. To enter additional contributions for forecast years after the baseline year, see the relevant topics of Deterministic Assumptions or Stochastic Assumptions. For forecast years after the baseline year, the Additional Contribution may be an amount or a target. If it is a target, the Additional Contribution will be the amount necessary to reach the target. ProVal adds an additional contribution amount to the amount generated according to the setting of the Contribution Policy parameter and to the amount computed to meet a funding target indicated by the Calculate end of year additional contribution parameter when it derives the total employer contribution paid for each forecast year; in the Canadian and U.S. qualified pension modes, this total may be reduced to avoid exceeding the maximum tax deductible amount for the year.

The Additional Contribution parameter is particularly useful, when used in conjunction with the “percentage of payroll” option of the Contribution Policy parameter (discussed in a preceding paragraph), for prescribing a contribution that is a flat dollar amount: enter 0 as the Constant percentage of payroll and enter the desired contribution amount for the plan year as the value of the Additional Contribution parameter.

In U.S., Qualified Mode "PPA and CAS" law type, enter the Fraction of contributions reimbursed. This fraction will be applied to all contributions (whether in a contribution schedule, calculated from a contribution policy, entered as an additional contribution, calculated as an end of year additional contribution, etc.) when rolling forward CAS assets. If Contribute excess Assignable Pension Cost on first quarterly due date is checked and the assignable pension cost is greater than the calculated contribution policy, ProVal will contribute the excess amount on the first quarterly due date. Note that if there is an end of year additional contribution, ProVal calculates the excess amount prior to the determination of the end of year additional contribution.

 

 

Except in the Canadian registered mode, there is a Fraction of year from Valuation Date to end of Plan Year parameter, used in funding calculations to add interest to the end of the plan year to values calculated as of the valuation date (asset values, liabilities, expected employer contributions, etc.). The primary calculations affected by this parameter are the interest credit to the end of the plan year and the fraction of normal cost (between 0 and 1) included to roll liabilities to the end of the plan year. If the valuation date is the first day of the plan year, enter 1; if the valuation date is the last day of the plan year, enter 0. For dates in between, compute the fraction that, when added to the valuation date entered under the Initial Asset Values topic, approximates the last day of the plan year. The date that ProVal will calculate based on the value you enter is shown to the right of the parameter’s text field.

In the U.S. qualified mode (except for a “PPA” law selection), there is a Fraction of year from Valuation Date to end of Tax Year parameter, used in calculation of the maximum tax deductible contribution limit to add interest, to the end of the fiscal (tax) year, to values calculated as of the valuation date (asset values, liabilities, expected employer contributions, etc.). The only calculation affected by this parameter is the maximum tax deductible contribution amount, which is based on liabilities rolled forward to the earlier of the end of the plan year or the end of the tax year. If the valuation date is the first day of the tax year, enter 1; if the valuation date is the last day of the tax year, enter 0. For dates in between, compute the fraction that, when added to the valuation date entered under the Initial Asset Values topic, approximates the last day of the tax year. Values entered for this parameter and the Fraction of year from Valuation Date to end of Plan Year parameter should be the same unless the tax and plan years do not coincide. The date that ProVal will calculate based on the value you enter is shown to the right of the parameter’s text field.

In all modes except U.S. qualified, you are required to specify the timing of plan year contributions under the Fraction of year from Valuation Date to average date contributions are made parameter. For the year beginning on the Valuation Date (in a forecast, the baseline valuation date) entered under the Initial Asset Values topic, ProVal assumes that the prior year contributions amount entered as the Contribution Receivable parameter value, as well as the current year employer contribution indicated by the Contribution Policy parameter and any Additional Contribution specified (as discussed in preceding paragraphs), is made on the date derived by adding this fraction to the Valuation Date. Values between 0 (contribution is made at the beginning of the year, on the valuation date) and 1.8 (contribution is made approximately nine and a half months after the end of the year) are permitted. For example, if the valuation date is the first day of the plan year and the plan sponsor pays half the current year contribution on this date and half on the last day of the plan year, then a value of 0.5 would be a reasonable entry (because the contribution is made, on average, at the middle of the year). At future valuation dates in a forecast, ProVal derives the assumed contribution payment date of the current plan year’s contributions (again, the contribution generated by the Contribution Policy parameter and any Additional Contributions specified in deterministic or stochastic assumptions) by adding this fraction to that (future) valuation date. For example, if the fraction entered is 1.5, the plan year is a calendar year and the baseline valuation date is 1/1/2009, then the current year contributions for the 2010 plan year are considered paid 1.5 years after 1/1/2010 (the valuation date for the 2010 plan year), in the middle of 2011. Note that, in this example, because the contributions for the 2009 plan year are considered paid 1.5 years after 1/1/2009, in the middle of 2010, these are receivable contributions for the 2010 plan year valuation.

Note: the value entered for the Fraction of year from Valuation Date to average date contributions are made parameter is not used to determine the timing of an end of year additional contribution made to reach a funding target at the end of the year (calculated if specified under the Forecast Analysis topic). See End of Year Additional Contribution for information about its timing.