PLR 200439045: Pension benefit reduction amendment denied

Plain-English summary

A pension plan sought approval for an amendment that would reduce future service credit for active employees and remove a 15% post-retirement benefit improvement for retirees. The IRS denied the request. The agency had communicated a tentative denial and offered a conference, but the plan's representative said no further information would be provided. The published letter does not explain the substantive reason for denial or discuss a specific Code provision beyond the nonprecedent rule.

Ruling snapshot

• Question: Could the plan adopt an amendment reducing active employees' future service credit and eliminating a retiree benefit improvement?
• Outcome: Denied.
• Key authorities: No substantive statute or regulation is discussed in the letter; the index classifies it under minimum funding standards.

Full text (IRS public release)

Significant Index Nos. 0412.00.-00

DEPARTMENT OF THE TREASURY
INTERNAL REVENUE SERVICE
WASHINGTON, D.C. 20224

200439045

TAX EXEMPT AND
GOVERNMENT ENTITIES
DIVISION

JUN 30 2004

SE:T:EP:RA:T:A2

In re:

Dear

The letter constitutes notice that your request of April 29, 2003, for a ruling that approves the adoption of a plan amendment, for the above-referenced plan, that would reduce the future service credit for all active employees, effective as of August 1, and eliminate a 15% post-retirement benefit improvement granted on June 5, , to all retirees, effective as of August 1, has been denied.

Your authorized representative was informed of our tentative denial on May 12, and was offered a conference of right concerning our proposed denial. On June 23, your authorized representative informed us telephonically that no further information would be provided. Accordingly our tentative denial is now final.

This ruling is directed only to the taxpayer that requested it. Section 6110(k)(3) of the Code provides that it may not be used or cited by others as precedent.

A copy of this letter is being sent to the Manager, Employee Plans Classification in . A copy of this letter is being furnished to your authorized representative pursuant to a power of attorney (Form 2848) on file.

If you have any questions on this ruling letter, please contact:

Sincerely,

Carol Gold, Director
Employee Plans