PLR 200443043: Pension plan minimum funding waiver denied

Plain-English summary

An employer sought a waiver of the minimum funding standard for its defined benefit pension plan. Its representative told the IRS that the plan was terminating. The IRS found that the submitted information did not show a temporary substantial business hardship, a requirement for the requested waiver. After the employer did not arrange a conference within the 21 days offered, the IRS made its proposed denial final.

Ruling snapshot

• Question: Did the plan qualify for a waiver of its minimum funding standard?
• Outcome: Denied; the employer did not demonstrate temporary hardship and did not seek a conference after tentative denial.
• Key authorities: IRC § 412(d)(2)(D).

Full text (IRS public release)

Significant Index No. 0412.06-00
DEPARTMENT OF THE TREASURY
INTERNAL REVENUE SERVICE
WASHINGTON, D.C. 20224
200443043

TAX EXEMPT AND GOVERNMENT ENTITIES DIVISION
JUL 26 2004
SE:T:EP:RA:T:A2

In re:

This letter constitutes notice that with respect to the above-named defined benefit pension plan, your request for a waiver of the minimum funding standard for the plan year ended June has been denied.

Section 412(d)(2)(D) of the Code provides that, in determining whether or not an employer is experiencing a temporary substantial business hardship, it is reasonable to expect that the plan will be continued only if the waiver is granted. On June _ David Stirling, the authorized representative listed on the power of attorney, informed us that the Plan is terminating.

The information furnished failed to demonstrate that the hardship was temporary, and a denial of the request was proposed. The company was informed of our tentative denial and was offered a conference of right by letter dated June

You were given 21 days to have a conference concerning our proposed denial. The 21-day period stated in our letter has passed. You have not communicated with us to arrange a conference. Therefore, 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.

200443043

A copy of this letter is being sent to the Employee Plans Classification Manager

in and to the authorized representative listed on the power of attorney (Form 2848) on file with this office.

If you have any questions concerning this matter, please contact

Sincerely,

/s/

Donna M. Prestia, Acting Manager
Employee Plans Actuarial Group 2