PLR 200628035: Hospital pension funding waiver security deadline extended

Plain-English summary

A hospital had a conditional waiver of its pension plan's minimum funding standard for the plan year ending June 30, 2004. The IRS modified the deadline for an agreement with the Pension Benefit Guaranty Corporation on security for repayment of the waived amount. The new deadline was the later of 120 days from this letter or the earlier of a PBGC notice that the condition was unmet and 360 days from this letter. The hospital and the agency were awaiting an appraisal of real estate offered as collateral. The hospital withdrew a separate waiver request for the following plan year, and the IRS closed that case.

Ruling snapshot

• Question: How would the security agreement deadline under the earlier funding waiver change?
• Outcome: Approved; the condition's deadline was modified, and the next year's separate waiver request was withdrawn.
• Key authorities: IRC § 412 (minimum funding waiver).

Full text (IRS public release)

Significant Index No. 0412.06-00
200628035

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

TAX EXEMPT AND
GOVERNMENT ENTITIES
DIVISION

APR 19 2006

Hospital =

This letter constitutes notice that the conditional waiver of the minimum funding standard for the Plan for the plan year ending June 30, 2004, which was granted in our ruling letter dated October 22, 2004, has been modified to change the deadline in condition (2) by which an agreement must be reached with the Pension Benefit Guaranty Corporation (“PBGC”) on securing repayment of the waived amount from 120 days from the date of the original ruling letter to the later of (a) 120 days from the date of this ruling letter or (b) the earlier of (i) the date the PBGC notifies the Service in writing that this condition has not been met or (ii) 360 days from the date of this ruling letter. Furthermore, pursuant to your authorized representative’s request of

April 5, 2006, your request for a waiver of the minimum funding standard for the Plan for the plan year ending June 30, 2005, has been withdrawn, and the case has been closed by this office.

According to information submitted with the request, a tentative agreement on security has been negotiated with the PBGC. However, the Hospital and the PBGC are awaiting the appraisal of the real estate being offered as collateral before completing their negotiations.

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.

We have sent a copy of this letter to the Manager, EP Classification in
:, to the Manager, EP Compliance Unit in - _ , and to your authorized representative pursuant to a power of attorney on file in this office.

200628035

_ If you require further assistance in this matter, please contact

Sincerely yours,

Carol D. Gold
Director, Employee Plans