Effective for plan years beginning after 2007, the PPA requires actuaries of single-employer defined benefit plans to determine and certify the plan's adjusted funding target attainment percentage (AFTAP). If the AFTAP is above 80%, no benefit restrictions will apply to the plan. If the AFTAP is between 60% and 80%, benefit increases are prohibited and partial restrictions apply to certain forms of payment. If the AFTAP is less than 60%, benefit accruals must be frozen and any form of payment that pays out faster than a single life annuity (such as a lump sum) is prohibited.
If the plan's actuary does not complete the certification before the first day of the fourth month of the plan year, which is April 1, 2011, for calendar year plans, then the plan's AFTAP is presumed to be 10% less than the prior year's AFTAP until the certification is complete. If the AFTAP is not certified by the first day of the tenth month of the plan year, which is October 1, 2011, for calendar year plans, then the plan's AFTAP will be presumed to be below 60% for the remainder of the plan year.