IRS approves a five-year extension for multiemployer plan liabilities

Plain-English summary

The IRS approved a plan's request for a five-year automatic extension to amortize unfunded liabilities arising as of January 1, 2008. The extension applied to specified amortization charge bases and was effective for the plan year beginning on the redacted date. The IRS found that the plan submitted the required information under section 431(d)(1), including an actuary's certification that the plan faced a projected accumulated funding deficiency without the extension, had adopted a funding-improvement plan, and was expected to have sufficient assets during the extended period. The letter does not identify the taxpayer, plan, or contact information because those details were redacted before release.

Ruling snapshot

• Question: Whether the plan qualified for a five-year extension to amortize specified unfunded liabilities.
• Outcome: Approved.
• Key authorities: IRC § 431(d)(1)

Full text (IRS public release)

201233033

Significant Index Number 0431.00-00

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

TAX EXEMPT AND
GOVERNMENT ENTITIES
DIVISION

MAR 12 2009\n\nT. E.P.R.A. 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

January 1, 2008, 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 January
1,20 . This extension applies to the amortization charge bases as identified in
your application submission, established as of January 1, 2008, with a total
outstanding balance of $ as of that date.

The extension of the amortization periods of the unfunded liabilities of the Plan
was granted in accordance with section 431(d1) 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,
(il) the plan sponsor has adopted a plan to improve the
plan's funding status,

201233033

2

(iil) 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