PLR 200447044: Security condition revised for pension funding waiver

Plain-English summary

The IRS had granted a conditional minimum funding waiver for a pension plan in an earlier ruling. The taxpayer asked to change the condition because it needed approval from the Department of Housing and Urban Development and another redacted party to use a facility as security for repayment of the waived amount. The IRS modified its earlier letter to require documents establishing a repayment security arrangement satisfactory to the Pension Benefit Guaranty Corporation by a redacted December 31 deadline. The letter changes the condition; it does not state a new waiver amount.

Ruling snapshot

• Question: Could the security condition in an earlier pension funding waiver be replaced?
• Outcome: Modification approved.
• Key authorities: IRC § 412 (minimum funding waiver); earlier IRS ruling dated October 14, 2003.

Full text (IRS public release)

Significant Index No. 0412.06-00

DEPARTMENT OF THE TREASURY
INTERNAL REVENUE SERVICE
WASHINGTON, D.C. 20224
200447044

TAX EXEMPT AND
GOVERNMENT ENTITIES
DIVISION

AUG 24 2004

SE:T:EP:RA:T:A2

In re:

This letter constitutes notice that our ruling letter dated October 14, 2003, which granted a conditional waiver of the minimum funding standard for the above-named pension plan for the plan year ending December 31, is hereby modified to replace the condition in that letter with the new condition stated below:

By December 31, , all necessary documents to provide an arrangement to secure the repayment of the waived amount satisfactory to the Pension Benefit Guaranty Corporation (“PBGC”) will be executed.

(“Taxpayer”) is a not-for-profit, tax-
exempt located at (“Facility”).
The Facility secures a loan from the which is insured by the U.S. Department of Housing and Urban Development (“HUD”). This modification is requested due to complicated nature of obtaining approval from both HUD and to use the Facility as security for the waived amount to the satisfaction of the PBGC.

If you have any questions concerning this matter, please contact

Sincerely,

Carol D. Gold
Director, Employee Plans