Surplus from a terminated pension plan can move into two 401(k) plans without triggering the reversion excise tax

Plain-English summary

A publicly traded company terminated its defined benefit pension plan and, after paying every promised benefit, was left with about $14.4 million in surplus assets. Normally, when leftover pension money reverts to the employer, it is hit with an excise tax under Code section 4980 (20 percent, or 50 percent if no qualified replacement plan is set up). The company asked instead to transfer the entire surplus into two of its ongoing profit-sharing/401(k) plans and treat those two plans together as a single "qualified replacement plan." The IRS agreed to all six requests: the two receiving plans can be treated as one replacement plan, the transfer is not income to the employer, no deduction is allowed for it, and no reversion excise tax applies. The IRS also let the company park the money in a suspense account and draw it down over up to seven years to fund employer contributions, and it granted extra time (60 days after the ruling) to finish distributing the plan's assets. Employers unwinding an overfunded pension plan care about this because it shows how to recycle the surplus into other retirement plans instead of paying a steep excise tax.

Ruling snapshot

• Question: Can a terminated defined benefit plan's surplus be transferred to two ongoing defined contribution plans, treated as one qualified replacement plan, without being an excise-taxable employer reversion under section 4980?
• Outcome: approved (all six rulings granted)
• Key authorities: IRC § 4980(a), (c)(2), (d)(1), (d)(2), (d)(5)(D); Treas. Reg. § 1.401(k)-6; Rev. Rul. 2003-85; Rev. Rul. 89-87

Full text (IRS public release)

 Internal Revenue Service                                      Department of the Treasury
                                                               Washington, DC 20224

 Number: 202429010                                             Third Party Communication: None
 Release Date: 7/19/2024                                       Date of Communication: Not Applicable
 Index Number: 4980.00-00
                                                               Person To Contact:
 ----------------------------                                  -------------------------, ID No. -----------------
 --------------------------------------------------------      -----------------------------------------------------
 -----------------------------                                 Telephone Number:
 -------------------------------------------------------       --------------------
 ------------------------                                      Refer Reply To:
                                                               CC:EEE:EB:QP3
 In Re: -----------------------------                          PLR-121708-23
                                                               Date:
                                                               April 19, 2024




 Taxpayer         =   -----------------------------
 Plan A           =   -----------------------------------------------------------------------
 Plan B           =   --------------------------------
 Plan C           =   -------------------------------------

Dear -------------:

This is in response to a request for a letter ruling submitted on behalf of Taxpayer by its
authorized representatives on September 12, 2023, as supplemented by
correspondence dated March 4, 2024, and March 11, 2024, concerning the proper
treatment under section 4980 of the Internal Revenue Code (Code) of the direct transfer
of all of the remaining assets of Plan A, a qualified defined benefit plan sponsored by
Taxpayer that has been terminated, to Plans B and C, two qualified profit-sharing plans
sponsored by Taxpayer.

Facts

Taxpayer is a publicly traded company that, along with other members of its controlled
group, files a consolidated Federal income tax return. Taxpayer's taxable year is the
calendar year. Taxpayer has represented the following facts:

Plan A is a defined benefit pension plan established by Taxpayer that (together with its
related trust), since its inception, has been qualified under section 401(a). Taxpayer
terminated Plan A effective as of December 31, 2021. Before that date, benefit accruals
under Plan A were discontinued at various times for different participant groups.

Plan B is a defined contribution profit sharing plan sponsored by Taxpayer that (together
with its related trust), since its inception, has been qualified under section 401(a). Plan
C is a defined contribution profit sharing plan sponsored by Taxpayer that (together with
PLR-121708-23                                 2

its related trust), since its inception, has been qualified under section 401(a). Plan B and
Plan C each have a plan year that is the calendar year.

Prior to its termination, Plan A covered two groups of employees that are referred to for
purposes of this request as, respectively, bargaining employees and non-bargaining
employees. Plan B covers eligible employees who are non-bargaining employees. Plan
C covers eligible employees who are bargaining employees.

Plan B includes: (A) a qualified cash or deferred arrangement under section 401(k); (B)
an employer safe harbor contribution feature pursuant to which Taxpayer makes certain
matching contributions on behalf of eligible non-bargaining employees in accordance
with sections 401(k)(12) and 401(m)(11); (C) an employer nonelective contribution
feature pursuant to which Taxpayer makes certain supplemental contributions for each
plan year on behalf of eligible non-bargaining employees; and (D) the ability for
Taxpayer to make discretionary employer contributions on behalf of eligible non-
bargaining employees.

Plan C includes a qualified cash or deferred arrangement under section 401(k) and an
employer contribution feature pursuant to which Taxpayer makes certain matching
contributions and supplemental nonelective employer contributions on behalf of certain
eligible bargaining employees in accordance with sections 401(k) and 401(m).

All employees who were active participants in Plan A on the date of Plan A termination
were active participants in either Plan B or Plan C at that time. Thus, immediately after
the termination of Plan A effective December 31, 2021, 100 percent of the participants
in Plan A who remained as current employees of Taxpayer (including any member of its
controlled group) were active participants in either Plan B or Plan C. Of those
employees, 35 percent were active participants in Plan B, and 65 percent were active
participants in Plan C.

The IRS issued a favorable determination letter on July 12, 2022, as to the effect of the
termination of Plan A on its qualified status. Plan A was terminated in a standard
termination under section 4041(b) of the Employee Retirement Income Security Act of
1974, as amended (ERISA), and a Standard Termination Notice was filed with the
Pension Benefit Guaranty Corporation (PBGC) for Plan A on June 20, 2023.

The distribution of all benefits due to participants, surviving spouses, other beneficiaries,
and alternative payees under Plan A was completed on February 1, 2023. Following the
distribution of all benefits due to participants, surviving spouses, other beneficiaries, and
alternative payees under Plan A, the actuary for Plan A estimated that Plan A had a
surplus of $14.4 million as of June 30, 2023.

After all Plan A liabilities have been satisfied and before the reversion of any surplus
funds to Taxpayer, Taxpayer will direct the trustee of Plan A to effectuate the direct
transfer from Plan A to Plan B and Plan C of an aggregate amount equal to the total
PLR-121708-23                                  3

amount of Plan A's remaining surplus. Taxpayer will further direct that this aggregate
amount be divided between Plan B and Plan C in proportion to the number of
participants in Plan A as of December 31, 2021 (100 percent of whom were participants
in either Plan B or Plan C as of December 31, 2021) who remain as current employees
of Taxpayer (including any member of its controlled group) and are active participants
in, respectively, Plan B and Plan C as of the last day of the month immediately
preceding the month in which the direct transfer of assets from Plan A occurs.

Taxpayer will cause the amounts transferred to Plan B and Plan C to be credited to a
suspense account under each of those plans, and amounts from those suspense
accounts will be allocated to fund all or a portion of any employer nonelective
contributions due in accordance with the terms of those plans (after the offset of any
forfeitures). The transfers will take place following receipt of a favorable private letter
ruling approving the Proposed Transaction. Taxpayer will direct the release of amounts
from the suspense accounts for allocation to fund future nonelective contributions in
accordance with section 4980 to be allocated for plan years beginning with the year of
the transfers. The allocations from the suspense accounts will be no less rapidly than
ratably on a periodic basis over an allocation period beginning on the date of the
transfer and ending on the last day of the sixth plan year after the plan year of transfer
(Allocation Period). The minimum ratable drawdown of the suspense account over the
Allocation Period will be measured by the Taxpayer or plan administrator at periodic
intervals. The amount released from the suspense account for each interval (e.g., for
each plan year), applied to fund employer nonelective contributions, will be no less than
the amount determined by multiplying the amount in the suspense account as of the first
day of the interval by a fraction, the numerator of which is one and the denominator of
which is the number of intervals remaining in the Allocation Period, and these amounts
will be released from the suspense accounts at least annually. The suspense accounts
will not be applied to fund any employer matching contributions (within the meaning of
Treas. Reg. § 1.401(k)-6)) under Plan B or Plan C. Taxpayer will adopt amendments to
Plan B and Plan C to accomplish the foregoing.

Any amounts allocated from the suspense accounts in Plan B and Plan C attributable to
the transfers from Plan A and any income earned thereon will be treated as employer
contributions for purposes of sections 401 and 415.

All benefits due under Plan A were distributed after Taxpayer received the favorable
IRS determination letter regarding the qualified status of Plan A upon its termination.
The remaining surplus assets will be retained in the trust through which Plan A is
funded pending receipt of the requested rulings described herein.

In general, in a standard plan termination, a defined benefit plan is to distribute plan
assets to satisfy all plan benefits by a distribution deadline. The distribution deadline is
the later of (a) 180 days after expiration of PBGC's 60-day review period, or (b) 120
days after receipt of a favorable IRS determination letter provided that the plan
administrator submits a valid request for an IRS determination letter by the time he or
PLR-121708-23                                4

she files the Form 500 with PBGC. Plan A received its favorable determination letter
relating to the termination of Plan A on July 12, 2022. The period of 180 days following
the expiration of the PBGC's 60-day period occurred on December 23, 2022 (the Form
5500 was filed with the PBGC on April 27, 2022). An insurance company assumed the
annuity payments on or about February 1, 2023. As part of the process of terminating
Plan A, Taxpayer was required to make best efforts to locate any missing participants to
ensure that their benefits were properly paid and ultimately reported to the PBGC in the
context of Taxpayer's filing of Form 501 (PBGC Post-Distribution Certification for
Standard Termination) and MP-100 (Missing Participants Program Plan Information).
Taxpayer filed Form 501 and MP-100 with the PBGC on June 20, 2023, and was then in
position to confirm the amount of excess pension assets remaining and evaluate
whether the excess pension assets could be transferred to one or both of the defined
contribution plans sponsored by Taxpayer. The effort to locate and contact missing
participants took far longer than Taxpayer may have contemplated, and this effort
contributed to the delay in finalizing a contract with an annuity provider. In view of the
number of missing participants and certain complexities involving Plan A, Taxpayer had
to resolve questions in connection with the annuity provider's assumption of liabilities
and, once the excess amount was known, determine how best to proceed with
addressing the remaining assets (culminating in a letter ruling request). The missing
participants were not resolved until the end of June 2023. After that date, there were no
remaining participants in Plan A; all participants had received distributions from Plan A.
In addition, the process of obtaining guidance has also delayed the distribution of the
remaining assets in Plan A's trust.

Taxpayer requests the following rulings:

    1. Plan B and Plan C may be treated as one plan for purposes of section 4980
      pursuant to section 4980(d)(5)(D) and together constitutes a single "qualified
      replacement plan" for purposes of section 4980(d)(2).
    2. The direct transfer from Plan A to Plan B and Plan C of an aggregate amount
      equal to 100 percent of the maximum amount that Taxpayer could receive as an
      employer reversion from Plan A will be treated as follows:
          a. the aggregate amount transferred will not be included in the gross income
             of Taxpayer;
          b. no deduction will be allowable with respect to the aggregate amount
             transferred; and
          c. the aggregate amount transferred will not be treated as an employer
             reversion for purposes of section 4980, and Taxpayer will not be subject to
             any excise tax under section 4980 with respect to the amount transferred.
    3. The allocation of the aggregate amount of the direct transfer from Plan A
      between Plan B and Plan C in proportion to the number of participants in Plan A
      as of December 31, 2021 who remain as current employees of Taxpayer
      (including any member of its controlled group) and are active participants in,
      respectively, Plan B and Plan C as of the last day of the month immediately
      preceding the month in which the direct transfer of assets from Plan A occurs is
PLR-121708-23                                 5

      consistent with the treatment of Plan B and Plan C as a single qualified
      replacement plan for the purposes of section 4980(d)(2) and the requirements of
      that provision.
    4. The crediting of the amounts transferred from Plan A to suspense accounts in
      Plan B and Plan C, as applicable, and the allocation of the assets in each
      suspense account to fund all or a portion of the periodic employer nonelective
      contributions due in accordance with the terms of each of Plan B and Plan C will
      satisfy the allocation requirement of section 4980(d)(2)(C).
    5. An allocation of the surplus in the suspense account in 2025 may be treated as
      an allocation for the year of the transfer (2024) when used for a 2024 nonelective
      contribution, provided that the 2024 nonelective contribution is made no later
      than the due date, including extensions, of Taxpayer's federal income tax return
      for the 2024 tax year.
    6. In view of the requirement in Revenue Ruling 89-87 that plan assets be
      distributed as soon as administratively feasible following the termination of the
      plan, that Plan A be granted an extension of time to distribute its remaining
      assets through the date that is 60 days after the date this letter ruling is resolved
      (either approved or denied) so that the retention of assets in Plan A's trust, after
      all benefit liabilities have been satisfied, and the transfer of the remaining assets
      to the qualified replacement plans, will be considered to have been made as
      soon as administratively feasible following the termination of Plan A.

Applicable Law

Section 4980(a) provides for a 20 percent excise tax on the amount of any reversion
from a qualified plan.

Section 4980(c)(2) generally defines the term "employer reversion" as the amount of
cash and the fair market value of other property received (directly or indirectly) by an
employer from the qualified plan.

Section 4980(d)(1) provides, in pertinent part, that the excise tax under section 4980(a)
shall be increased to 50 percent with respect to any employer reversion from a qualified
plan unless the employer either establishes or maintains a qualified replacement plan,
or the plan provides for certain benefit increases that take effect immediately on the
termination date.

Section 4980(d)(2) provides that a qualified replacement plan is a qualified plan
established or maintained by the employer in connection with a qualified plan
termination, that satisfies the participation, asset transfer, and allocation requirements of
section 4980(d)(2)(A), (B), and (C).

Section 4980(d)(2)(A) requires that at least 95 percent of the active participants in the
terminated plan who remain as employees of the employer after the termination be
active participants in the replacement plan.
PLR-121708-23                                 6


Section 4980(d)(2)(B) requires that a direct transfer from the terminated plan to the
replacement plan be made before any employer reversion, and that the transfer be an
amount equal to the excess (if any) of (i) 25 percent of the maximum amount that the
employer could receive as an employer reversion without regard to section 4980(d),
over (ii) the amount equal to the present value of the aggregate increases in the
accrued benefits under the terminated plan of any participants or beneficiaries pursuant
to a plan amendment adopted during the 60-day period ending on the date of
termination of the qualified plan, and that takes effect immediately on the termination
date.

Section 4980(d)(2)(B)(iii) provides that in the case of the transfer of any amount under
section 4980(d)(2)(B)(i) from a terminated plan, that amount is not includible in the
gross income of the employer, no deduction is allowable with respect to the transfer,
and the transfer is not treated as an employer reversion for purposes of section 4980.

Section 4980(d)(2)(C)(i) provides that, if the replacement plan is a defined contribution
plan, the amount transferred to the replacement plan must be (I) allocated under the
plan to the accounts of participants in the plan year in which the transfer occurs, or (II)
credited to a suspense account and allocated from the suspense account to accounts of
participants no less rapidly than ratably over the seven-plan-year period beginning with
the year of the transfer.

Section 4980(d)(2)(C)(ii) provides that if, by reason of any limitation under section 415,
any amount credited to a suspense account under clause (i)(II) may not be allocated to
a participant before the close of the seven-plan-year period, that amount shall be
allocated to the accounts of other participants, and if any portion of that amount may not
be allocated to other participants by reason of the limitation, it shall be allocated to the
participant as provided in section 415.

Section 4980(d)(2)(C)(iii) provides that any income on any amount credited to a
suspense account under clause (i)(II) shall be allocated to accounts of participants no
less rapidly than ratably over the remainder of the period determined under that clause
(after application of clause (ii)).

Section 4980(d)(2)(C)(iv) provides that if any amount credited to a suspense account
under clause (i)(II) is not allocated as of the termination date of the replacement plan, (I)
that amount shall be allocated to the accounts of the participants as of that date, except
that any amount that may not be allocated by reason of any limitation under section 415
shall be allocated to the accounts of other participants, and (II) if any portion of that
amount may not be allocated to other participants under the preceding subclause (I) by
reason of those limitations, that portion shall be treated as an employer reversion to
which section 4980 applies.
PLR-121708-23                                 7

Section 4980(d)(5)(D)(i) authorizes the Secretary of the Treasury to treat two or more
plans as one plan for purposes of determining whether there is a qualified replacement
plan.

Rev. Rul. 2003-85, 2003-32 IRB 291, provides that the direct transfer from a terminating
plan that did not provide for increases in the accrued benefit of participants to a plan
intended to be a qualified replacement plan satisfied the requirements of
section 4980(d)(2)(B) when the amount transferred was at least 25 percent of the
maximum amount that the employer could receive as an employer reversion.

Under section 501(a), an organization described in section 401(a) (that is, a trust that is
part of a qualified pension, profit-sharing or stock bonus plan) is generally exempt from
taxation.

Under § 1.411(d)-2(c)(2), for purposes of section 411, a plan to which title IV of ERISA
applies is considered terminated as of a particular date if as of that date it was
terminated under section 4041 or 4042 of ERISA. For such a plan, the date of
termination is the date of termination determined under section 4048 of ERISA.

Section 1.416-1, T-4, defines a terminated plan as one that has been formally
terminated, under which crediting service has ceased for vesting and benefit accruals,
and under which plan assets have been, or are being, distributed as soon as is
administratively feasible.

Under Rev. Rul. 69-157, 1969-1 CB 115, a trust that is part of a qualified plan will not
retain its qualified status after the plan has been terminated. Further, a plan is not
considered terminated in fact where the plan continues in effect until all the assets have
been distributed to participants in accordance with the terms of the plan.

Under Rev. Rul. 79-237, 1979-2 CB 190, once applicable, the minimum funding
standards described in section 412 apply to a pension plan through the date of its
termination. Rev. Rul. 79-237 defines the date of termination for a plan subject to title IV
as the date described in section 4048 of ERISA.

Section 430 provides requirements regarding the minimum funding standards under
section 412 for single-employer defined benefit plans, including rules for determining
minimum required contributions and rules regarding the timing for making the minimum
required contributions. Section 1.430(a)-1(f)(5)(i) provides that in the case of a plan
subject to Title IV, the plan's termination date means the termination date established
under section 4048 of ERISA.

Rev. Rul. 89-87, 1989-2 C.B. 81 states that in order to terminate a qualified plan, the
date of termination must be established, the benefits of plan participants and other
liabilities under the plan must be determined with respect to the date of plan termination,
and all plan assets must be distributed to satisfy those liabilities in accordance with the
PLR-121708-23                                 8

terms of the plan as soon as administratively feasible after the date of termination. A
plan that is amended to terminate and to cease benefit accruals has not, in fact, been
terminated under the Code if the assets are not distributed as soon as administratively
feasible after the stated date of plan termination, regardless of whether the plan is
treated as terminated under other federal law, including title IV of ERISA. Whether a
distribution is made as soon as administratively feasible is to be determined under all
the facts and circumstances of the given case but, generally, a distribution that is not
completed within one year following the date of plan termination specified by the
employer will be presumed not to have been made as soon as administratively feasible.

Analysis

With regard to the first request, section 4980(d)(5)(D)(i) authorizes the Secretary of the
Treasury to treat two or more plans as one plan for purposes of determining whether
there is a qualified replacement plan. In this case, Taxpayer proposes to contribute all of
the excess Plan A assets to Plan B and Plan C, both of which are ongoing defined
contribution plans that collectively included all of the active Plan A participants at the
time of its termination. Plan B and Plan C may be treated as one single qualified
replacement plan for purposes of section 4980(d)(2).

With regard to the second request, section 4980(d)(2)(B)(iii) provides that in the case of
the transfer of any amount under section 4980(d)(2)(B)(i) from a terminated plan, that
amount is not includible in the gross income of the employer, no deduction is allowable
with respect to the transfer, and the transfer is not treated as an employer reversion for
purposes of section 4980. In this case, Plan A will transfer all of the excess Plan A
assets that would otherwise be a reversion to Taxpayer to Plan B and Plan C,
considered collectively to be a qualified replacement plan. Therefore, the direct
transfers from Plan A to the receiving plans of the entire amount that Taxpayer could
receive as an employer reversion from Plan A will not be included in the gross income
of Taxpayer, no deduction will be allowable with respect to the aggregate amount
transferred, the aggregate amount transferred will not be treated as an employer
reversion for purposes of section 4980, and Taxpayer will not be subject to an excise
tax under section 4980 with respect to the amount transferred.

With regard to the third request, after all Plan A liabilities have been satisfied and before
the reversion of any surplus funds to Taxpayer, Taxpayer states that it intends to direct
the trustee of Plan A to effectuate a direct transfer from Plan A to Plan B and Plan C of
an aggregate amount equal to the total amount of Plan A's remaining surplus. Taxpayer
further intends to direct that this aggregate amount be divided between Plan B and Plan
C in proportion to the number of participants in Plan A as of December 31, 2021 (100
percent of whom were participants in either Plan B or Plan C as of December 31, 2021)
who remain as current employees of Taxpayer (including any member of its controlled
group) and are active participants in, respectively, Plan B and Plan C as of the last day
of the month immediately preceding the month in which the direct transfer of assets
from Plan A occurs. This method of allocation of the excess Plan A assets is consistent
PLR-121708-23                                9

with the treatment of Plan B and Plan C as a single qualified replacement plan for the
purposes of section 4980(d)(2) and the requirements of that provision.

With regard to the fourth request, Taxpayer states that the terms of Plan B and Plan C
will be amended to provide for the creation of a suspense account in each plan and the
minimum amount allocated from the suspense account for each of Plan B and Plan C to
fund nonelective employer contributions for each interval during the Allocation Period
will be no less than the amount determined by multiplying the amount in the respective
suspense account as of the first day of the interval by a fraction, the numerator of which
is one and the denominator of which is the number of intervals remaining in the
Allocation Period for Plan B and Plan C, respectively, and will be at least annually. The
allocation of any income earned by the suspense accounts will similarly be allocated at
least as rapidly as ratably on the same periodic basis over the remainder of the
Allocation Period under the same procedure. This method of allocation complies with
the requirements of section 4980(d)(2)(C)(i). Therefore, in this case, this method of
crediting of the amounts transferred from Plan A to suspense accounts in each of Plan
B and Plan C, and this method of allocation of the assets in the suspense accounts to
fund all or a portion of the nonelective employer contributions due in accordance with
the terms of Plan B and Plan C, will satisfy the allocation requirements of section
4980(d)(2)(C).

With regard to the fifth request, Taxpayer represents that it will release amounts from
the suspense accounts for both plans during 2025 and before the due date (including
extensions) for its 2024 Federal income tax return to fund employer contributions for the
2024 plan year. Section 4980(d)(2)(C)(i)(II) provides for the portion of the amount
transferred to a qualified replacement plan to be credited to a suspense account and
allocated from that account to accounts of participants no less rapidly than ratably over
the 7-plan-year period beginning with the year of the transfer. If the transfer of the
remaining surplus assets from Plan A to Plans B and C is made during 2024, this
release of amounts from the two suspense accounts during 2025 for allocation for the
2024 plan year will not fail to satisfy the requirement to make the first set of periodic
allocations from the suspense account in accordance with section 4980(d)(2)(C)(i)(II).

With regard to the sixth request, Taxpayer took action to terminate Plan A effective as
December 31, 2021. Plan A received a favorable determination letter on its termination
on July 12, 2022. All benefits due under Plan A were distributed after Taxpayer received
the favorable determination letter. All that remains to complete the termination is to
distribute the plan assets as soon as administratively feasible. Whether a distribution is
completed as soon as administratively feasible has been interpreted in Rev. Rul. 89-87
generally to require distribution within one year of the date of termination.

Exceptions to this one-year rule are limited and depend on the facts and circumstances
of the plan termination. Taxpayer has represented that the effort to locate and contact
missing participants took far longer than Taxpayer may have contemplated, and such
effort contributed to the delay in finalizing a contract with an annuity provider. In
PLR-121708-23                                  10

addition, Taxpayer had to resolve questions in connection with the annuity provider's
assumption of liabilities and, once the excess amount was known, determine how best
to proceed with addressing Plan A's remaining assets. In order to transfer the remaining
assets to two separate plans and treat the two plans as a qualified replacement plan
under section 4980, Taxpayer determined that this letter ruling request was required so
the Secretary could provide its approval, pursuant to section 4980(d)(5)(D), that two or
more plans may be treated as one plan for purposes of whether a qualified replacement
plan exists. Taxpayer filed this letter ruling request several months after the process to
locate and contact missing participants concluded. The timing of receipt of the letter
ruling (after a request is filed) is largely out of the control of Taxpayer, and the process
of obtaining the letter ruling contributed to the delay in the distribution of Plan A's
assets.

Based on the facts and circumstances as represented by Taxpayer, we conclude that, if
any amounts remaining in Plan A's trust are transferred to Plan B and Plan C by the
date that is 60 days after the date of this letter ruling, then Plan A will not be treated as
failing to meet the requirement to distribute plan assets as soon as administratively
feasible as a result of the fact that assets will remain in Plan A's trust for a period of time
after all other benefits and liabilities have been distributed.

The rulings contained in this letter are based upon information and representations
submitted by Taxpayer and accompanied by a penalty of perjury statement executed by
an appropriate party, as specified in Rev. Proc. 2024-1, 2024-1 IRB 1, § 7.01(16)(b).
This office has not verified any of the material submitted in support of the request for
ruling, and such material is subject to verification on examination. The Associate office
will revoke or modify a letter ruling and apply the revocation retroactively if there has
been a misstatement or omission of controlling facts; the facts at the time of the
transaction are materially different from the controlling facts on which the ruling was
based; or, in the case of a transaction involving a continuing action or series of actions,
the controlling facts change during the course of the transaction. See Rev. Proc.
2024-1, § 11.05.

Except as expressly provided herein, no opinion is expressed or implied concerning the
tax consequences of any aspect of any transaction or item discussed or referenced in
this letter.

This letter ruling is directed only to the taxpayer who requested it. Section 6110(k)(3)
provides that it may not be used or cited as precedent.
PLR-121708-23                                          11


In accordance with the Power of Attorney on file with this office, a copy of this letter is
being sent to each of your authorized representatives.

                                                 Sincerely,



                                                 Linda S. F. Marshall
                                                 Senior Counsel, Qualified Plans Branch 1
                                                 Office of Associate Chief Counsel
                                                 (Employee Benefits, Exempt Organizations, and
                                                 Employment Taxes)


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