x. PDL 4x: Year-End Compliance & Reporting (transferred to Confluence)

Richard Phillips Updated by Richard Phillips

  1. Census Data
    1. The census data should be combined into a single non-SSP import file that will be imported into the cash balance plan. All employees on payroll must be recorded in the CBP in order for 410(b) and 401(a)(26) to calculate correctly.
    2. The import file should contain the applicable DC PID assignment, stored in the EE Number field.
  2. Step 1 - Cash Balance Plan
    1. Start with the cash balance plan. Import the census data and confirm all EEs are assigned to a DC plan.
    2. Participation - Review participation status and set excluded EEs as such
    3. Eligibility Calculation - Update as needed for terminees.
    4. 401(a)(26) - The lesser of at least 40% of the eligible workforce or 50 employees must benefit under the plan with no less than a 0.50% annual accrual. The accrual measurement is the current year's accrual compared to the prior year's annual accrual unless an exception applies. HCE status is not relevant to this test. While this is a mathematical calculation the determination of a "meaningful benefit" is based on facts and circumstances. Spot check the current year calculations and if the ratio is at least 0.50% then it could be viewed as satisfied. If needed, reduce the test threshold on the 401(a)(26) compliance report so the test will indicate passage. (For more detail see Chapter 7; ASC DB Reference Manual).TEST MUST RUN PRIOR TO IMPORTING THE OFFSET VALUES FROM THE LINKED DC PLAN.
    5. 410(b). The coverage ratio must be no less than 70%.
    6. Export census data that will be imported into the respective DC plan(s).
  3. Step 2 - DC/Floor Offset Plan Linked to CBP
    1. SSP Settings - Set the PID setting in ASC to 2 and skip the Match Verification. Eventually the SSP script will be updated to follow the proper path for 4x plan designs.
    2. SSP Phase 1:
      1. Disable all steps of P1 after "Import Census File"
      2. Execute Wizard
      3. Open plan and calculate Eligibility / Limit Comp
      4. Open VIF "PSFOS EXPORT.GRX" and export values to plan folder
    3. Activity File Modifications (spreadsheet template: Operations / Cash Balance Plans / Templates / PSFOS Activity File Modification Template.
      1. Currently in SRT the profit sharing source and floor offset source is comingled and tracked in the profit sharing source. The activity file must be modified as follows:
        1. Calculate the PS to PSFOS ratio. This is the ratio of each source (PS and PSFO) to the sum of the two sources.
        2. Contributions - profit sharing contributions should be adjusted by the calculated amount of the floor offset for the year. Refer to the CBP plan document, but as a general rule the PSFOS will be 7.5% of an employee's eligible comp. These values are imported into ASC in lieu of running the calculations in ASC.
        3. Gain/Loss adjusted proportionally based on the beginning value of the PS and PSFOS values in ASC.
        4. Expenses adjusted prportionally based on the beginning value of the PS and PSFOS values in ASC.
        5. Distributions - no adjustments are made to the activity file. Any distributions and withdrawals will need to be manually entered in ASC once the activity file has imported.
    4. SSP Phase 1 - Re-Execute Phase 1 with all processes set to Y except Match Verification.
      1. Once phase 1 has completed, review the contributions for the HCEs (specifically for misallocation of PSFOS to matching contributions. Manually adjust as needed.
      2. Run floor offset projections. Calculations / Valuation / Partial / Plan Totals & Projections
        1. Review any errors and correct. If there are errors rerun after corrections have been made. This establishes the accrued benefit that will transfer to the cash balance plan to determine the value of the offset.
  4. Step 3 - Cash Balance Plan - Go back to the cash balance plan in ASC and do the following:
    1. General / Compensation / COMPAVG - Under Compensation Limits set "Benefit Add-ons" to 3 - Additional Offset
    2. Save Plan Specs
    3. Calculations / Valuation / Complete calcs with box checked to import floor offsets from plan. Confirm the correct DC plan is selected.This will populate the annuitized DC offset benefit.


  1. Comp Average - Make sure the comp average setting is set to #1
  2. Run full valuation calcs in CBP - Once all the settings have been updated for the plan year, make sure . the setting is off so that ASC calculates the expected contribution.
  3. Import DC projected benefits.
  4. Transfer values from Add on to Offset fields
  5. Clear values
  6. Comp Average - set to "3-Additional Offset"
  7. Run valuation again withouot DC projections.
  8. Export to text field the Expected Contribution
  9. Clear Expected Contribution field
  10. Enter the post-offset expected contribution (typically only the HCE)
  11. Print participant statements
  12. Export DC Projections to Excel
    1. Floor/Offset > Balance > No future contrib
    2. Floor/Offset > Benefit > No future contrib
    3. Rate > Annuity Rate
    4. PSFOS balance as of last day of plan year

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