PLR 200634063: Pension funding waiver security condition modified

Plain-English summary

The IRS had granted a pension plan a conditional waiver of its minimum funding standard for the plan year ending April 30, 2004. This letter changes one condition of that earlier ruling. It requires the company to provide security for repayment of the waived amount that satisfies the Pension Benefit Guaranty Corporation. The letter says the change was requested because coordinating with the company's secured creditors was complicated.

Ruling snapshot

• Question: How should a security condition in an earlier pension funding waiver be changed?
• Outcome: Approved; condition (1) of the earlier ruling was replaced.
• Key authorities: Minimum funding standard waiver; the letter cites no Code provision.

Full text (IRS public release)

Significant Index No. 0412.06-00

DEPARTMENT OF THE TREASURY
INTERNAL REVENUE SERVICE
WASHINGTON, D.C. 20224
200634063

TAX EXEMPT AND
GOVERNMENT ENTITIES
DIVISION

T:EP:RA:T:A2
MAY 18 2006

In re:

This letter constitutes notice that our ruling letter dated December 22, 2004, which granted a conditional waiver of the minimum funding standard for the above-named pension plan for the plan year ending April 30, 2004, is hereby modified to replace condition (1) in that letter with the new condition stated below:

By June 30, 2005, the Company shall provide security to the Plan to secure the repayment of the waived amount that is satisfactory to the Pension Benefit Guaranty Corporation. This modification is requested due to complicated nature of working with the Company's secured creditors to enable the Company to provide security for the waived amount that is satisfactory to the Pension Benefit Guaranty Corporation.

If you have any questions concerning this matter, please contact

Sincerely,

Donna M. Prestia, Manager
Employee Plans Actuarial Group 2