PLR 201136031: IRS approves a five-year pension-plan amortization extension

Plain-English summary

The IRS approved a plan's request for a five-year automatic extension to amortize unfunded liabilities as of April 1, 2010. The extension applied to eligible amortization charge bases established as of that date and was effective with the plan year beginning April 1, 2010. The approval relied on the plan's submission of required information, including an actuary's certification concerning projected funding deficiencies, a funding-improvement plan, projected assets, and required notice. The letter stated that it was directed only to the requesting taxpayer and could not be used or cited by others as precedent.

Ruling snapshot

• Question: Whether the plan qualified for a five-year automatic extension to amortize specified unfunded liabilities.
• Outcome: Approved.
• Key authorities: IRC §§ 304(b), 431(b), 431(d)(1), and 6110(k)(3); ERISA §§ 304(b)(2) and 304(b)(4).

Full text (IRS public release)

Significant Index Number 0431.00-00

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

TAX EXEMPT AND JUN 16 2011 201136031
GOVERNMENT ENTITIES
DIVISION

TEP: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 April 1, 2010, 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 April 1, 2010. This extension applies to the eligible amortization charge bases, established as of April 1, 2010.

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,

201136031

(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
and to the

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,

David M. Ziegler
Manager, EP Actuarial Group 2