Determination 1035042: Five-year amortization extension approved

Plain-English summary

The IRS approved a five-year automatic extension for amortizing a plan's unfunded liabilities as of May 1, 2009. The extension applied to eligible amortization charge bases established as of that date and was effective for the plan year beginning May 1, 2009. The approval followed the plan's submission of information and an actuary's certification that, without the extension, the plan would have an accumulated funding deficiency, that the sponsor had adopted a funding-improvement plan, that the plan was projected to have enough assets for expected benefits and expenses, and that the required notice had been provided. The approval was granted under section 431(d)(1) and applied only to the requested funding issue.

Ruling snapshot

• Question: May the plan receive a five-year extension for amortizing eligible unfunded liabilities?
• Outcome: Approved
• Key authorities: IRC § 431(d)(1); ERISA §§ 302(c)(5)(B) and 304(b)

Full text (IRS public release)

+Significant Index Number 0431.00-00

[illegible]
DEPARTMENT OF THE TREASURY

(i328 : INTERNAL REVENUE SERVICE

Xe Ts WASHINGTON, D.C. 20224

TAX EXEMPT AND
GOVERNMENT ENTITIES JUN 1 1 2010
DIVISION
SE:T:EP:RA:A2

Re:
Taxpayer =
Dear

This letter constitutes notice that approval has been granted for your request for
a 5-year automatic extension for amortizing the unfunded liabilities as of

May 1, 2009, for the above-named Plan which are described in sections
431(b)(2)(B) and 431(b)(4) of the Internal Revenue Code (“Code,” and sections
304(b)(2)(B) and 304(b)(4) of the Employee Retirement Income Security Act of
1974 (“ERISA”). This extension is effective with the plan year beginning

May 1, 2009. This extension applies to the eligible amortization charge bases,
established as of May 1, 2009.

The extension of the amortization periods of the unfunded liabilities of the Plan
was granted in accordance with section 431(d)(1) of the Code. Section
431(d)(1)(A) of the Code requires the Secretary to extend the period of time
required to amortize any unfunded liability of a plan for a period of time (not in
excess of 5 years) if the Plan submits an application meeting the criteria stated in
section 431(d)(1)(B). The plan has submitted the required information to meet
the criteria in section 431(d)(1)(B), including a certification from the plan’s actuary
that:

(i) absent the extension under subparagraph (A), the
plan would have an accumulated funding deficiency in the
current plan year or any of the 9 succeeding plan years,
(ii) the plan sponsor has adopted a plan to improve the
plan's funding status,

(iii) the plan is projected to have sufficient assets to
timely pay expected benefits and anticipated expenditures
over the amortization period as extended, and

(iv) the notice required under paragraph (3)(A) has been
provided.

We have sent a copy of this letter to the Manager,
and to the Manager,

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

If you require further assistance in this matter, please contact
Sincerely yours,

"[illegible]

David M. Ziegler
Manager, EP Actuarial Group 2