Table of Contents
| General Instructions | |
| Specific Instructions | |
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Code section references are to the Internal Revenue Code unless otherwise noted. ERISA refers to the Employee Retirement Income Security Act of 1974.
As the first step, the plan administrator of any multiemployer defined benefit plan that is subject to the minimum funding standards (see Code sections 412 and 431 and Part 3 of Title I of ERISA) must obtain a completed Schedule MB (Form 5500) that is prepared and signed by the plan's enrolled actuary as discussed below in the Statement by Enrolled Actuary section. The plan administrator must retain with the plan records the Schedule MB that is prepared and signed by the plan's actuary.
Note. Schedule MB does not have to be filed with the Form 5500-EZ, but, if required, it must be retained (in accordance with the instructions for Form 5500-EZ under the What to File section). Similarly, if a plan is a one-participant plan that meets the requirements for filing a Form 5500-EZ, but a Form 5500-SF is instead filed for the plan, the Schedule MB, if required, does not have to be filed with the Form 5500-SF, but it must be retained (in accordance with the instructions for the Form 5500-SF under Schedule MB in the Specific Instructions Only for "One-Participant Plans" section). Also, the funding standard account for the plan must continue to be maintained, even if the Schedule MB is not filed.
Note. (1) For split-funded plans, the costs and contributions reported on Schedule MB must include those relating to both trust funds and insurance carriers. (2) For plans with funding standard account amortization charges and credits, see the instructions for lines 9c and 9h. (3) For terminating multiemployer plans, Code section 412(e)(4) and ERISA section 301(c) provide that minimum funding standards apply until the last day of the plan year in which the plan terminates within the meaning of section 4041A(a)(2) of ERISA. Accordingly, the Schedule MB is not required to be filed for any later plan year.
An enrolled actuary must sign Schedule MB unless, as described above, the plan is a money purchase defined contribution plan that has received a waiver of the minimum funding standard. The signature of the enrolled actuary may be qualified to state that it is subject to attached qualifications. See Treasury Regulations section 301.6059-1(d) for permitted qualifications. Except as otherwise provided in these instructions, a stamped or machine produced signature is not acceptable. If the actuary has not fully reflected any final or temporary regulation, revenue ruling, or notice promulgated under the statute in completing the Schedule MB, check the box on the last line of page 1. If this box is checked, indicate on an attachment whether an accumulated funding deficiency or a contribution that is not wholly deductible would result if the actuary had fully reflected such regulation, revenue ruling, or notice, and label this attachment "Schedule MB - Statement by Enrolled Actuary." In addition, the actuary may offer any other comments related to the information contained in Schedule MB.
All attachments to the Schedule MB must be properly identified, and must include the name of the plan, the plan sponsor's EIN, and the plan number. Put "Schedule MB" and the line number to which the attachment relates at the top of each attachment. Do not include attachments that contain a visible social security number or any portion thereof. The Schedule MB and its attachments are open to public inspection, and the contents are public information and are subject to publication on the Internet. Because of privacy concerns, the inclusion of a visible social security number - or any portion thereof - on an attachment may result in the rejection of the filing.
Line 1. top All entries must be reported as of the valuation date.
Line 1a. Actuarial Valuation Date. top The valuation for a plan year may be as of any date in the plan year, including the first or last day of the plan year. Valuations must be performed within the period specified by Code section 431(c)(7) and ERISA section 304(c)(7).
Line 1b(1). Current Value of Assets. top Enter the current value of assets as of the valuation date. The current value is the same as the fair market value. Do not adjust for items such as the existing credit balance or the outstanding balances of certain amortization bases. Contributions designated for 2014 should not be included in this amount. Note that this entry may be different from the entry in line 2a. Such a difference may result, for example, if the valuation date is not the first day of the plan year, or if insurance contracts are excluded from assets reported on line 1b(1) but not on line 2a.
Line 1b(2). Actuarial Value of Assets. top Enter the value of assets determined in accordance with Code section 431(c)(2) and ERISA section 304(c)(2). Do not adjust for items such as the existing credit balance or the outstanding balances of certain amortization bases, and do not include contributions designated for 2014 in this amount.
Line 1c(1). Accrued Liability for Immediate Gain Methods. top Complete this line only if you use an immediate gain method (see Rev. Rul. 81-213, 1981-2 C.B. 101, for a definition of immediate gain method).
Lines 1c(2)(a), (b), and (c). Information for Plans Using Spread Gain Methods. top Complete these lines only if you use a spread gain method (see Rev. Rul. 81-213 for a definition of spread gain method).
Line 1c(2)(a). Unfunded Liability for Methods with Bases. top Complete this line only if you use the frozen initial liability or attained age normal cost method.
Lines 1c(2)(b) and (c). Entry Age Normal Accrued Liability and Normal Cost. top For spread gain methods, these calculations are used for purposes of the full funding limitation (see Rev. Rul. 81-13, 1981-1 C.B. 229).
Line 1d(1). Amount Excluded from Current Liability. top Leave line 1(d)(1) blank.
Line 1d(2)(a). Current Liability. top All multiemployer plans, regardless of the number of participants, must provide the information indicated in accordance with these instructions. The interest rate used to compute the current liability must be in accordance with guidelines issued by the IRS and, pursuant to the Pension Protection Act of 2006 (PPA), must not be more than 5 percent above and must not be more than 10 percent below the weighted average of the rates of interest, as set forth by the Treasury Department, on 30-year Treasury securities during the 4-year period ending on the last day before the beginning of the 2014 plan year.
Line 1d(2)(b). Expected Increase in Current Liability. top Enter the amount by which the current liability is expected to increase due to benefits accruing during the plan year on account of credited service and/or salary changes for the current year. One year's salary scale may be reflected.
Line 1d(2)(c). Expected Release From Current Liability for the Plan Year. top Enter the expected release from current liability on account of disbursements (including single-sum distributions) from the plan expected to be paid after the valuation date but prior to the end of the plan year (see also Q&A-7 of Rev. Rul. 96-21, 1996-1 C.B. 64).
Line 1d(3). Expected Plan Disbursements. top Enter the amount of plan disbursements expected to be paid for the plan year.
Line 2. top All entries must be reported as of the beginning of the 2014 plan year. Lines 2a and 2b should include all assets and liabilities under the plan except for assets and liabilities attributable to: (1) rollover amounts or other amounts in individual accounts that are not available to provide defined benefits, or (2) benefits for which an insurer has made an irrevocable commitment as defined in 29 CFR 4001.2.
Line 2a. Current Value of Assets. top Enter the current value of net assets as of the first day of the plan year. Except for plans with excluded assets as described above, this entry should be the same as reported on the 2014 Schedule H (Form 5500) (line 1l, column (a)) or Schedule I (Form 5500) (line 1c, column (a)). Note that contributions designated for the 2014 plan year are not included on those lines.
Line 2b. Current Liability (beginning of plan year). top Enter the current liability as of the first day of the plan year. Do not include the expected increase in current liability due to benefits accruing during the plan year. See the instructions for line 1d(2)(a) for actuarial assumptions used in determining current liability.
Line 2c. top This calculation is required under ERISA section 103(d)(11). Do not complete if line 2a divided by line 2b(4), column (2), is 70% or greater.
Line 3. Contributions Made to Plan. top Show all employer and employee contributions for the plan year. Include employer contributions made not later than 2½ months (or the later date allowed under Code section 431(c)(8) and ERISA section 304(c)(8)) after the end of the plan year. Show only contributions actually made to the plan by the date this Schedule MB is signed.
Line 4. Information on Plan Status. top All multiemployer plans regardless of the number of participants must provide the information indicated in accordance with these instructions.
Line 4a. top
Enter the code for the status of the multiemployer plan for the plan
year, as certified by the plan actuary, using one of the following
codes:
| Code | Plan Status |
|---|---|
| E | Endangered Status |
| S | Seriously Endangered Status |
| C | Critical Status |
| N | Not in Endangered or Critical Status |
Line 4c. top If, in the plan year in which the Schedule MB is filed, a certification was required to be made under Code section 432(b)(3)(A)(ii) and ERISA section 305(B)(A)(ii) with respect to scheduled progress during the plan year for which the Schedule MB is filed, check "Yes" or "No" to reflect the certification. Attach documentation comparing the current status of the plan to the scheduled progress under the applicable funding improvement or rehabilitation plan to this Schedule MB. Label the documentation "Schedule MB, line 4c - Documentation Regarding Progress Under Funding Improvement or Rehabilitation Plan."
Lines 4d and 4e. top If Code C (Critical Status) was entered on line 4a, an entry on line 4d is required. For purposes of lines 4d and 4e, in determining whether adjustable benefits have been reduced, only adjustable benefits that would otherwise be protected under Code section 411(d)(6) and ERISA section 204(g) are taken into account. In addition, only adjustable benefit reductions that are first reflected in line 1c(3) for the current year's Schedule MB should be reported, and this amount should not include any amounts previously reported on any prior year's Schedule MB.
Line 4f. top If Code C (Critical Status) was entered on line 4a you must complete line 4f. If the rehabilitation plan projects emergence from critical status, enter the plan year in which the plan is projected to emerge. If the rehabilitation plan is based on forestalling possible insolvency, check the box provided and enter the plan year in which the insolvency is expected.
Line 5. Actuarial Cost Method. top Enter the primary method used. If the plan uses one actuarial cost method in one year as the basis of establishing an accrued liability for use under the frozen initial liability method in subsequent years, answer as if the frozen initial liability method was used in all years. The projected unit credit method is included in the "Accrued benefit (unit credit)" category of line 5c. If a method other than a method listed on lines 5a through 5g is used, check the box for line 5j and specify the method. For example, if a modified individual level premium method for which actuarial gains and losses are spread as a part of future normal cost is used, check the box for 5j and describe the cost method.
Shortfall Method: Only certain plans may elect the shortfall funding method (see Treasury Regulations section 1.412(c)(1)-2). Advance approval from the IRS for the election of the shortfall method of funding is NOT required if it is first adopted for the first plan year to which Code section 412 applies. In addition, pursuant to PPA section 201(b), a plan does NOT need advance approval from the IRS to adopt or cease using the shortfall method if the plan (1) has not adopted or ceased using the shortfall method during the 5-year period ending on the day before the date the plan is to use the method, and (2) is not operating under an amortization period extension and did not operate under such an extension during such 5-year period. In such a case, check "Yes" for line 5m. If a plan utilizes this automatic approval to apply the shortfall method, the benefit increase limitations of Code section 412(c)(7) apply.
Reorganization Status:
Attach an explanation of the basis for the determination that the plan
is in reorganization for this plan year and label the explanation "Schedule
MB, line 5 - Reorganization Status Explanation." Also, attach a
worksheet showing for this plan year:
Line 6. Actuarial Assumptions. top If gender-based assumptions are used in developing plan costs, enter those rates where appropriate in line 6. Note that requests for gender-based cost information do not suggest that gender-based benefits are legal. If unisex tables are used, enter the values in both "Male" and "Female" lines. Check "N/A" for line 6b if the question is not applicable.
Line 6a. Current Liability Interest Rate. top Enter the interest rate used to determine current liability. The interest rate used must be in accordance with the guidelines issued by the IRS and, pursuant to PPA, must not be more than 5 percent above and must not be more than 10 percent below the weighted average of the rates of interest, as set forth by the Treasury Department, on 30-year Treasury securities during the 4-year period ending on the last day before the beginning of the 2014 plan year. Enter the rate to the nearest .01 percent.
Line 6b. top Check "Yes," if the rates in the contract were used (e.g., purchase rates at retirement).
Line 6c. Mortality Table. top The mortality table published in section
1.431(c)(6)-1 of the Treasury Regulations must be used in the
calculation of current liability for non-disabled lives. Enter the
mortality table code for non-disabled lives used for valuation purposes
as follows:
| Mortality Table | Code |
|---|---|
| 1951 Group Annuity................................................................ | 1 |
| 1971 Group Annuity Mortality (G.A.M.) ................................. | 2 |
| 1971 Individual Annuity Mortality (I.A.M.) ............................. | 3 |
| UP-1984 ................................................................................ | 4 |
| 1983 I.A.M.............................................................................. | 5 |
| 1983 G.A.M. .......................................................................... | 6 |
| 1983 G.A.M. (solely per Rev. Rul. 95-28) .............................. | 7 |
| UP-1994 ................................................................................ | 8 |
| Mortality table applicable to current plan year under
section 1.431(c)(6)-1 of the Income Tax Regulations .......................... |
9 |
| Other ...................................................................................... | A |
| None ...................................................................................... | 0 |
Line 6d. Valuation Liability Interest Rate. top Enter the assumption as to the expected interest rate (investment return) used to determine all the calculated values except for current liability. If the assumed rate varies with the year, enter the weighted average of the assumed rate for 20 years following the valuation date. Enter rates to the nearest .01 percent.
Line 6e. Expense Loading. top If there is no expense loading, check the "N/A" boxes under "Pre-retirement" and "Postretirement". For instance, there would be no expense loading attributable to investments if the rate of investment return on assets is adjusted to take investment expenses into account. If there is a single expense loading not separately identified as pre-retirement or post-retirement, enter it under "Pre-retirement" and check the "N/A" box under "Post-Retirement." Where expenses are assumed other than as a percentage of plan costs or liabilities, enter the assumed pre-retirement expense as a percentage of the plan's normal cost, and enter the post-retirement expense as a percentage of plan liabilities. If the normal cost of the plan is zero, enter the assumed pre-retirement expense as a percentage of the sum of lines 9c(1), 9c(2), and 9c(3), minus line 9h. Enter rates to the nearest .1 percent.
Line 6f. Salary Scale. top If a uniform level annual rate of salary increase is used, enter that annual rate. Otherwise, enter the level annual rate of salary increase that is equivalent to the rate(s) of salary increase used. Enter the annual rate as a percentage to the nearest .01 percent, used for a participant from age 25 to assumed retirement age. If the plan's benefit formula is not related to compensation, check the "N/A" box.
Line 6g. Estimated Investment Return - Actuarial Value. top Enter the estimated rate of return on the actuarial value of plan assets for the 1-year period ending on the valuation date. For this purpose, the rate of return is determined by using the formula 2I/(A + B - I), where I is the dollar amount of the investment return under the asset valuation method used for the plan, A is the actuarial value of the assets one year ago, and B is the actuarial value of the assets on the current valuation date. Enter rates to the nearest .1 percent. If entering a negative number, enter a minus sign (" - ") to the left of the number.
Note. Use the above formula even if the actuary feels that the result of using the formula does not represent the true estimated rate of return on the actuarial value of plan assets for the 1-year period ending on the valuation date. The actuary may attach a statement showing both the actuary's estimate of the rate of return and the actuary's calculations of that rate, and label the statement "Schedule MB, line 6g - Estimated Rate of Investment Return (Actuarial Value)."
Line 6h. Estimated Investment Return - Current (Market) Value. top Enter the estimated rate of return on the current value of plan assets for the 1-year period ending on the valuation date. (The current value is the same as the fair market value - see line 1b(1) instructions.) For this purpose, the rate of return is determined by using the formula 2I/(A + B - I), where I is the dollar amount of the investment return, A is the current value of the assets one year ago, and B is the current value of the assets on the current valuation date. Enter rates to the nearest .1 percent. If entering a negative number, enter a minus sign (" - ") to the left of the number.
Note. Use the above formula even if the actuary feels that the result of using the formula does not represent the true estimated rate of return on the current value of plan assets for the 1-year period ending on the valuation date. The actuary may attach a statement showing both the actuary's estimate of the rate of return and the actuary's calculations of that rate, and label the statement "Schedule MB, line 6h - Estimated Rate of Investment Return (Current Value)."
Line 7. New Amortization Bases Established. top List all new amortization bases established in the current plan year (before the combining of bases, if bases were combined). Use the following table to indicate the type of base established, and enter the appropriate code under "Type of base." List amortization bases and charges and/or credits as of the valuation date. Bases that are considered fully amortized because there is a credit for the plan year on line 9j(3) should be listed. If entering a negative number, enter a minus sign ("-") to the left of the number.
| Code | Type of Amortization Base |
|---|---|
| 1 | Experience gain or loss |
| 2 | Shortfall gain or loss |
| 3 | Change in unfunded liability due to plan amendment |
| 4 | Change in unfunded liability due to change in actuarial assumptions |
| 5 | Change in unfunded liability due to change in actuarial cost method |
| 6 | Waiver of the minimum funding standard |
| 7 | Initial unfunded liability (for new plan) |
Line 8a and 8d. Funding Waivers or Extensions. top If a funding waiver or extension request is approved after the Schedule MB is filed, an amended Schedule MB must be filed with Form 5500 to report the waiver or extension approval (also see instructions for line 9k(1)).
Line 8b. Schedule of Active Participant Data. top Check "Yes" only if this is a multiemployer plan covered by Title IV of ERISA that has active participants.
| Schedule MB, Line 8b - Schedule of Active Participant Data | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Attained Age |
YEARS OF CREDITED SERVICE | ||||||||
| Under 1 | 1 to 4 | 5 to 9 | 40 & up | ||||||
| No. | Average Comp.|Cash Bal. |
No. | Average Comp.|Cash Bal. |
No. | Average Comp.|Cash Bal. |
No. | Average Comp.|Cash Bal. |
||
| Under 25 25 to 29 30 to 34 35 to 39 40 to 44 45 to 49 50 to 54 55 to 59 60 to 64 65 to 69 70 & up |
|||||||||
Line 9. Shortfall Method. top Under the shortfall method of funding, the normal cost in the funding standard account is the charge per unit of production (or per unit of service) multiplied by the actual number of units of production (or units of service) that occurred during the plan year. Each amortization installment in the funding standard account is similarly calculated.
Lines 9c and 9h. Amortization Charges and Credits. top If there are any amortization charges or credits, attach a maintenance schedule of funding standard account bases and label the schedule "Schedule MB, lines 9c and 9h -Schedule of Funding Standard Account Bases." The attachment should clearly indicate the type of base (i.g., original unfunded liability, amendments, actuarial losses, etc.), the outstanding balance of each base, the number of years remaining in the amortization period, and the amortization amount. If bases were combined in the current year, the attachment should show information on bases both prior to and after the combining of bases.
Line 9d. Interest as Applicable. top Interest as applicable should be charged to the last day of the plan year.
Line 9f. top Note that the credit balance or funding deficiency at the end of "Year X" should be equal to the credit balance or funding deficiency at the beginning of "Year X+1." If such credit balances or funding deficiencies are not equal, attach an explanation and label the attachment "Schedule MB, line 9f - Explanation of Prior Year Credit Balance/Funding Deficiency Discrepancy." For example, if the difference is because contributions for a prior year that were not previously reported are received this plan year, attach a listing of the amounts and dates of such contributions. As another example, if the difference is due to the application of funding relief under the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010 (PRA 2010), Pub. L. No. 111-192, the attachment should show how the information on the Schedule MB filed for any previous plan year would have differed if it had reflected application of the special funding relief in accordance with published guidance (to the extent that the plan sponsor has applied the special funding relief).
Line 9j(1). ERISA Full Funding Limitation. top Instructions for this line are reserved pending published guidance.
Line 9j(2). "RPA '94" Override top. Instructions for this line are reserved pending published guidance.
Line 9j(3). Full Funding Credit. top Enter the excess of (1) the accumulated funding deficiency, disregarding the credit balance and contributions for the current year, if any, over (2) the greater of lines 9j(1) or 9j(2).
Line 9k(1). Waived Funding Deficiency Credit. top Enter a credit for a waived funding deficiency for the current plan year (Code section 431(b)(3)(C)). If a waiver of a funding deficiency is pending, report a funding deficiency. If the waiver is granted after Form 5500 or Form 5500-SF is filed, file an amended Form 5500 or Form 5500-SF, as applicable, with an amended Schedule MB to report the funding waiver (see Amended Return/Report in the instructions for Form 5500 or Line B - Box for Amended Return/Report in the instructions for Form 5500-SF, as applicable).
Line 9k(2). Other Credits. top Enter a credit in the case of a plan for which the accumulated funding deficiency is determined under the funding standard account if such plan year follows a plan year for which such deficiency was determined under the alternative minimum funding standard.
Line 9o. Reconciliation Account. top The reconciliation account is made up of those components that upset the balance equation of Treasury Regulations section 1.412(c)(3)-1(b). Valuation assets must not be adjusted by the reconciliation account balance when computing the required minimum funding.
Line 9o(1). top This amount is equal to the prior year's accumulated reconciliation amount due to prior waived funding deficiencies, increased with interest at the valuation rate to the current valuation date.
Line 9o(2)(a). top If an amortization extension is being amortized at an interest rate that differs from the valuation rate, enter the prior year's "reconciliation amortization extension outstanding balance," increased with interest at the valuation interest rate to the current valuation date, and decreased by the year end amortization amount based on the amortization interest rate from the prior plan year.
Line 9o(3). top Enter the sum of lines 9o(1) and 9o(2)(b) (each adjusted with interest at the valuation rate to the current valuation date, if necessary).
Note. The net outstanding balance of amortization charges and credits minus the prior year's credit balance minus the amount on line 9o(3) (each adjusted with interest at the valuation rate, if necessary) must equal the unfunded liability.
Line 10. Contribution Necessary to Avoid Deficiency. top Enter the amount from line 9n. For plans in reorganization, see the instructions for line 5. If applicable, file IRS Form 5330, Return of Excise Taxes Related to Employee Benefit Plans, with the IRS to pay the excise tax on the funding deficiency. There is a penalty for not filing the Form 5330 on time.
Line 11. top In accordance with ERISA section 103(d)(3), attach a justification for any change in actuarial assumptions for the current plan year and label the attachment "Schedule MB, line 11 - Justification for Change in Actuarial Assumptions."