PLR 201311045: IRS approves a five-year automatic amortization extension for a multiemployer plan

Plain-English summary

The IRS approved a five-year automatic extension for a multiemployer plan to amortize unfunded liabilities. The extension applies to the eligible amortization charge base identified in the request. The approval relied on the plan’s submission of required information and an actuary’s certification that the plan would otherwise face an accumulated funding deficiency, had adopted a funding-improvement plan, could pay expected benefits, and had provided required notice.

Ruling snapshot

• Question: What relief did the IRS grant under the applicable rollover or pension funding rules?
• Outcome: Approved.
• Key authorities: IRC § 431

Full text (IRS public release)

Significant Index Number 0431 .00-00

DEPARTMENT OF THE TREASURY 2 0 1 3 1 1 04 3

INTERNAL REVENUE SERVICE
WASHINGTON, D.C. 20224

TAX EXEMPT AND
GOVERNMENT ENTITIES
DIVISION

DEC 2 0 2012

Re:
(Plan No. ) (“Plan”)
EIN:

Taxpayer =
Plan Actuary =

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

, 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

. This extension applies to the eligible amortization charge base as submitted by the Plan Actuary on , in the amount of

, eStablished as of . In granting this approval, we are

not expressing any opinion as to the accuracy or acceptability of any calculation or other material submitted with the request.

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,

201311045

2

(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, EP Classification in Baltimore, Maryland, to the Manager, EP Compliance Unit in Chicago, Illinois, and to your authorized representative pursuant to a power of attorney on file in this office.

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

(ID# ) at
Sincerely yours,
a CH
David M. Ziegler
Manager, EP Actuarial Group 2
CC: