Source: https://www.irs.gov/irb/2017-31_IRB
Timestamp: 2019-04-24 00:07:39+00:00

Document:
This notice sets forth updates on the corporate bond monthly yield curve, the corresponding spot segment rates for July 2017 used under § 417(e)(3)(D), the 24-month average segment rates applicable for July 2017, and the 30-year Treasury rates. These rates reflect the application of § 430(h)(2)(C)(iv), which was added by the Moving Ahead for Progress in the 21st Century Act, Public Law 112–141 (MAP–21) and amended by section 2003 of the Highway and Transportation Funding Act of 2014 (HATFA).
Rev. Proc. 2017–43 revises procedures for applying for Treasury Department approval of a suspension of benefits under a multiemployer defined benefit pension plan that is in critical and declining status under § 432(e)(9). Effective for applications submitted on or after September 1, 2017, the revenue procedure modifies and supersedes Rev. Proc. 2016–27 and is intended to facilitate the Treasury Department’s review in light of its experience in processing benefit suspension applications.
This is a partial withdrawal of notice of proposed rulemaking (REG–163314–03) published on March 10, 2005 in the Federal Register (70 FR 11903) containing proposed regulations under sections 332, 351, and 368 (2005 Proposed Regulations). On December 12, 2008, Treasury adopted the Creditor Continuity of Interest provisions of the 2005 Proposed Regulations (TD 9434) published in the Federal Register (73 FR 75566). Minor portions of the 2005 Proposed Regulations that reflected statutory changes to sections 332 and 351 were adopted as part of a Treasury decision adopting final regulations under sections 334(b)(1)(B) and 362(e)(1) (TD 9759), published in the Federal Register (81 FR 17066) on March 28, 2016. The Treasury Department and the IRS have decided to withdraw the remainder of the 2005 Proposed Regulations that generally would have provided the non-recognition rules in subchapter C of chapter 1 of subtitle 1 of the Code do not apply unless there is an exchange (or, in the case of section 332, a distribution) of net value (the net value requirement).
Notice 2007–81, 2007–44 I.R.B. 899, provides guidelines for determining the monthly corporate bond yield curve, and the 24-month average corporate bond segment rates used to compute the target normal cost and the funding target. Consistent with the methodology specified in Notice 2007–81, the monthly corporate bond yield curve derived from June 2017 data is in Table I at the end of this notice. The spot first, second, and third segment rates for the month of June 2017 are, respectively, 1.96, 3.60, and 4.39.
This revenue procedure contains revised procedures for applications for a suspension of benefits under a multiemployer defined benefit pension plan that is in critical and declining status under § 432(e)(9). These procedures replace the procedures set forth in Rev. Proc. 2016–27, 2016–19 I.R.B. 725, and are intended to facilitate the review of an application for a suspension of benefits in light of the experience of the Department of the Treasury (Treasury Department) in processing applications. The procedures set forth in this revenue procedure must be followed for applications submitted on or after September 1, 2017.
In particular, MPRA amended § 432(e)(9) of the Code and section 305(e)(9) of ERISA to permit the sponsor of a multiemployer defined benefit plan in critical and declining status to submit to the Secretary of the Treasury (Secretary) an application to suspend benefits in certain situations. MPRA requires the Secretary to approve a plan sponsor’s proposed suspension if the plan is eligible for the proposed suspension and the proposed suspension satisfies § 432(e)(9)(C) through (F) of the Code.
On April 28, 2016, the Treasury Department and IRS published final regulations (TD 9765) under § 432(e)(9) in the Federal Register (81 FR 25540). The Treasury Department and the IRS issued Rev. Proc. 2016–27 contemporaneously with the final regulations. Rev. Proc. 2016–27 (which replaced Rev. Proc. 2015–34 (2015–27 I.R.B. 1218)) prescribed the application process for approval of a proposed benefit suspension in accordance with § 432(e)(9)(G) and provided a model notice that a plan sponsor proposing a benefit suspension could use to satisfy the content and readability requirements of § 432(e)(9)(F)(ii) and (iii)(II).
This revenue procedure supersedes Rev. Proc. 2016–27 and applies to submissions made on or after September 1, 2017. Therefore, plan sponsors should follow the application process prescribed in this revenue procedure for an application for approval of a proposed benefit suspension submitted on or after that date.
Section 2.07 has been revised to provide that if the Treasury Department identifies an error in the application after it is submitted, then the Treasury Department may request that the plan sponsor provide additional materials to correct the error.
Sections 3.01(2) and 3.02(2) contain a new requirement that the projected withdrawal liability payments that are included as part of the projection of the plan’s available resources, and as part of the support for the certification that the plan is projected to avoid insolvency (taking the proposed suspension into account), must be separately identified as projected payments attributable to prior withdrawals and projected payments attributable to expected future withdrawals.
Sections 4.01(1) and 4.01(2) have been simplified by replacing the requirement to provide sample calculations with respect to the guarantee-based limitation under § 432(e)(9)(D)(i) and the disability-based limitation under § 432(e)(9)(D)(iii) for an individual in each category or group that is treated differently under the suspension with a requirement that those sample calculations be provided only for an individual currently receiving benefits, a contingent beneficiary of an individual currently receiving benefits, and a future retiree.
Section 4.01(3) has been clarified to specify the age categories for which sample calculations with respect to the age-based limitation under § 432(e)(9)(D)(ii) (taking into account the guarantee-based limitation and, if applicable, the disability-based limitation) must be provided.
Section 4.04(2) has been revised to provide that certain information that would otherwise be required to demonstrate that the proposed suspension is equitably distributed in accordance with § 432(e)(9)(D)(vi) need not be provided in the case of an application in connection with a proposed partition of a plan under section 4233 of ERISA (“partition”).
Section 4.05 has been revised to clarify the different categories of individuals with respect to which sample notices must be provided as part of the application.
A new section 6.03 and Appendix B have been added to consolidate the descriptions of the actuarial assumptions used with respect to certain illustrations and projections included in the application (formerly contained in sections 3.01, 3.02, 4.02 and 4.03) and to provide additional detail regarding those assumptions.
Section 6.09 (formerly section 6.08) has been revised to require the inclusion of a narrative statement of the reasons the plan is in critical and declining status.
Section 7.08 has been revised to add a requirement to provide (as part of the required excerpts from the most recently filed Form 5500) the accountant’s report under section 103(a)(3) of ERISA.
Section 8.02 has been revised to add a requirement to provide the date on which the Treasury Department indicated that the application is a candidate for resubmission review, if applicable.
Appendix A has been revised to include minor clarifications to the Model Notice of Application for Approval of a Proposed Reduction of Benefits.
Appendix C (formerly Appendix B) has been revised to include minor clarifications to the power of attorney and declaration of representative form.
Appendix D (formerly Appendix C) has been updated to make clarifications to the application checklist and to reflect the other changes made to this revenue procedure.
.01 Who may submit an application. An application for approval of a proposed benefit suspension under § 432(e)(9) must be submitted by the plan sponsor as defined in § 432(j)(9) (generally, the joint board of trustees of the plan) or by an authorized representative of the plan sponsor. The application must be signed and dated by an authorized trustee who is a current member of the board of trustees or by an authorized representative of the plan sponsor who is described in section 7.01(13) of Rev. Proc. 2017–1, 2017–1 I.R.B. 1.
(3) If the proposed suspension does not provide for different treatment of participants and beneficiaries (other than as a result of application of the individual limitations of § 432(e)(9)(D)(i), (ii) and (iii) (the “individual limitations”)), a statement to that effect.
.07 Duty to correct. If, after submission of an application for a suspension of benefits, an error in that application is identified by the plan sponsor, then the plan sponsor must provide prompt notice to the Treasury Department. In such a case (or if the Treasury Department identifies an error in the application), the Treasury Department may request additional materials in order to correct the error in the application.
.08 Resubmission review. If the application for a suspension is submitted under the resubmission review process pursuant to § 1.432(e)(9)–1(g)(3), see section 8 of this revenue procedure for special procedures that apply.
(2) Withdrawal liability payments, separately identifying those payments that are attributable to prior withdrawals and those payments that are attributable to assumed future withdrawals.
(c) The limitations contained in the section 4022A(c)(2) definition of the accrual rate used for calculating the monthly guaranteed benefit.
(d) The section 4022A(d) limitation that the guaranteed benefit will not exceed the benefit calculated under the plan as reduced under § 411(a)(3)(E) of the Code.
(e) The section 4022A(e) exclusion, pursuant to section 4022(b)(6), of benefits that would not be guaranteed if paid under a single-employer plan (i.e., benefits paid from a plan that does not satisfy the requirements of § 401(a) or § 404(a)(2) of the Code).
(b) For each type of benefit based on disability, a sample calculation applying the disability-based limitation under § 432(e)(9)(D)(iii) of the Code for an individual currently receiving benefits, a contingent beneficiary of an individual currently receiving benefits, and a future retiree. The sample calculation should show how the plan determines the extent to which any benefit paid with respect to a participant who commenced (or will commence) benefits as a result of disability is, or is not, treated as a benefit based on disability. If some but not all of an individual’s benefit is not described in the plan as a disability benefit (for example, if a plan provides a retirement benefit at normal retirement age that is greater than a disability benefit paid before normal retirement age), then the calculation must show the extent to which the retirement benefit is, or is not, a benefit based on disability.
(a) A retiree or beneficiary who has commenced benefits as of the effective date of the proposed suspension and who is between age 75 and age 79 on the last day of the month that contains the proposed effective date of the suspension.
(b) A beneficiary of a retiree described in section 4.01(3)(a) of this revenue procedure.
(c) An individual who has not commenced benefits as of the effective date of the proposed suspension.
(3) Information on the actuarial assumptions used for the illustrations, as described in section 6.03 of this revenue procedure.
(c) If none of the factors listed in § 432(e)(9)(D)(vi)(I) through (XI) were taken into account in designing the proposed suspension, then the application must explain why none of them were taken into account.
(d) For each factor identified under section 4.04(2)(b) of this revenue procedure that is not one of the factors listed in § 432(e)(9)(D)(vi)(I) through (XI), an explanation of why the factor is relevant.
(1) A copy of each type of actual notice that has been or will be given to participants, beneficiaries, employers that have an obligation to contribute within the meaning of section 4212(a) of ERISA, and each employee organization representing participants under the plan. If individuals’ notices differ from each other in any way (other than for individualized information relating to the estimate of the effect of the proposed suspension on the individual’s benefit), then a copy of each type of notice that has been given or will be given to an individual must be provided. For example, a copy of each of the different notices that have been or are being provided to individuals described in paragraphs (a) through (d) of the model notice in Appendix A must be provided, even if the plan sponsor uses the model notice in Appendix A. Similarly, if there is a different notice for individuals who have retired on account of disability, a copy of the actual notice used for that group of individuals must be provided.
.01 Measures taken to avoid insolvency. A detailed description of measures taken to avoid insolvency over the past 10 plan years immediately preceding the plan year in which the application is submitted.
.01 Ballot. A proposed ballot intended to satisfy the requirements of § 432(e)(9)(H)(iii). However, the proposed ballot should not include the information described in § 1.432(e)(9)–1(h)(3)(i)(E), (L) or (M) (regarding the statement in opposition to the proposed benefit suspension, the individualized estimate that was or will be provided as part of the notice, and the voting procedures (including the deadline for voting)).
.02 Partition. Whether the plan sponsor is requesting approval from the Pension Benefit Guaranty Corporation (PBGC) of a proposed partition of the plan under section 4233 of ERISA. If the plan sponsor is requesting approval of a proposed partition, then the application for the proposed benefit suspension must include the proposed effective date of the partition and a plan-year-by-plan-year projection of the amount of the reduction in benefit payments (that is, the guaranteed amounts covered by financial assistance under the successor plan for each year) attributable to the partition.
(3) If different assumptions are used for different purposes within an application, an explanation of any differences among the assumptions used for various purposes.
A template for providing this information is included in Appendix B.
(3) Future contribution base units increase or decrease at a rate equal to the average annual rate of increase or decrease that the plan experienced over the period of years described in section 6.04 of this revenue procedure.
.06 Projection of funded percentage. The plan sponsor must include an illustration, prepared on a deterministic basis, of the projected value of plan assets, the accrued liability of the plan (calculated using the unit credit funding method), and the funded percentage for each year in the extended period.
.08 Whether a plan is described in § 432(e)(9)(D)(vii). Whether the plan is a plan described in § 432(e)(9)(D)(vii) and, if so, how the provisions of § 432(e)(9)(D)(vii) are reflected in the proposed benefit suspension.
.09 Narrative statement. The plan sponsor must include a narrative statement of the reasons the plan is in critical and declining status. The narrative statement may also include any other information that would be relevant to the application.
.01 Plan sponsor. Name, contact information (for example, address, telephone number, email address, and fax number) and employer identification number (EIN) of the plan sponsor.
.02 Plan identification. The plan’s name, EIN (if different from the plan sponsor’s EIN), and plan number.
.03 Retiree representative. Name and contact information of the plan’s retiree representative (if any) described in § 432(e)(9)(B)(v).
.05 Power of Attorney. A designation of power of attorney for each authorized representative who will represent the plan sponsor in connection with the application. See Appendix C.
(1) Language from any portion of a collective bargaining agreement that is relevant to the plan or the proposed suspension.
(2) Language from any portion of a side agreement that is relevant to the plan or the proposed suspension.
(2) The Schedule MB, including attachments.
(4) The accountant’s report under section 103(a)(3) of ERISA.
.11 Completed checklist. A completed checklist of information required to be included in the application. See Appendix D. The completed checklist must be signed and dated by an authorized trustee who is a current member of the board of trustees.
.02 A statement that the application is being submitted for resubmission review and the date on which the Treasury Department indicated that the application is a candidate for resubmission review.
Rev. Proc. 2016–27 is modified and superseded.
The collections of information contained in this revenue procedure have been approved by the Office of Management and Budget in accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3507 (c)) under control number 1545-2260.
The collections of information in this revenue procedure appear in Appendix C (sample Power of Attorney form) and Appendix D (checklist for completeness of the application). Burden estimates with respect to information described in sections 2, 3, 4, 5, 6 and 7 of this revenue procedure are reported in the preamble to the notice of proposed rulemaking (REG–102648–15) published on June 19, 2015, in the Federal Register (80 FR 35262) pursuant to which § 1.432(e)(9)–1 was issued.
We estimate the total number of respondents to be 10.
We estimate it will take 2 hours to comply. The estimated total annual and/or recordkeeping burden is 20 hours.
The Treasury Department will review the application to see whether it meets all of the legal requirements under Federal law. If the application meets all of those requirements, the Treasury Department is required to approve the application. If the application does not meet the legal requirements, the Treasury Department will deny the application. The Treasury Department will have until [insert date 225 days after the complete application is submitted] to make a decision.
More information about the proposed benefit reductions and a copy of the application will be available at www.treasury.gov/mpra.
The Treasury Department website will also provide updated information on the application, such as whether the application has been withdrawn.
You will be able to submit a comment on the application by going to www.treasury.gov/mpra. Comments may also be mailed to the Treasury Department, at the address listed above. All interested parties can make comments, and the comments will be publicly available.
Even if a majority votes to reject the proposed reduction of benefits, Federal law requires the Treasury Department to allow the proposed benefit reduction (or a modified version) to take effect if the cost to PBGC to provide guaranteed benefits is particularly large. This rule applies if the value of payments from PBGC if the plan runs out of money is expected to be more than [insert threshold most recently published under § 432(e)(9)(H)(v)(III)(bb))]. Before the Treasury Department permits a reduction in this circumstance, PBGC’s Participant and Plan Sponsor Advocate may recommend possible modifications to the proposed reduction.
You may contact PBGC’s Participant and Plan Sponsor Advocate regarding such a modification by mail at Pension Benefit Guaranty Corporation, Attn: Participant and Plan Sponsor Advocate, 1200 K St., NW, Washington DC 20005; by telephone at (202) 326-4448; or by e-mail at advocate@PBGC.gov.
The Plan’s Form 5500 annual reports, including the accountant’s report and audited financial statements, filed with the U.S. Department of Labor during the last six years.
The Plan’s current rehabilitation plan, including contribution schedules, and, if the proposed benefit reduction goes into effect, annual plan-sponsor determinations that all reasonable measures to avoid running out of money continue to be taken and that the Plan would run out of money if there were no benefit reductions.
Any quarterly, semi-annual, or annual financial reports prepared for the Plan by an investment manager, fiduciary, or other advisor and furnished to the Plan within the last six years.
If you think the Plan miscalculated the reduction to your benefits, then you have the right to submit a claim to the Plan to have the calculation corrected. The Plan’s SPD tells you how to submit a claim. The SPD also describes your right to have a court review the Plan’s final decision on your claim.
This is an estimate of the effect of the proposed reduction on your benefit under the Plan. It is not a final benefit calculation. This estimate was prepared assuming that the proposed benefit reduction starts on [insert proposed effective date]. [Include the following sentence only for individuals whose benefits are proposed to be suspended.] If the benefit reduction starts later, the effect of the proposed reduction on your benefit might be different.
If the Plan does not have enough money to pay benefits, your monthly benefit would be no larger than the amount guaranteed by PBGC. The amount of your monthly benefit guaranteed by PBGC is estimated to be [insert dollar amount].
This Appendix B details the information on actuarial assumptions and methods that, pursuant to section 6.03 of this revenue procedure, must be described in an application for approval of a proposed benefit suspension. Part 1 of this Appendix B identifies specific actuarial assumptions that must be described. Any other assumptions used in the cash flow projections included in the application (such as the take-up rate among multiple benefit/contribution schedules within the rehabilitation plan and the assumed age of contingent annuitants for future retirees) must also be described. Part 2 of this Appendix B specifies the supporting information that must be provided with respect to certain of the actuarial assumptions. Part 3 of this Appendix B describes an explanation that must be provided for certain specific differences in certain assumptions.
Part 1 - Actuarial assumptions and methods used for projections.
Applicants must provide the following information regarding the actuarial assumptions listed below. If an assumption varies based on a factor that is relevant for projecting cash flows, such as gender or benefit schedule, provide a separate specification of that assumption for each category of participants for which the assumption is different. If an assumption varies over time, specify the time frame applicable to such assumption. If an assumption differs on account of the suspension, provide such assumption both disregarding the suspension and taking the suspension into account.
Net investment return for deterministic projections.
Assumptions used for stochastic projections (if applicable). Provide the expected geometric returns, arithmetic returns, and standard deviation of returns for each asset class in which the plan is invested (or is expected to be invested), including the probability distribution of returns (e.g., normal or log-normal) along with any correlations used in the projections, including correlations among asset returns (and serial correlations, if any).
The base mortality rates and the calendar year for which those base mortality rates apply.
If a standard table is used, provide the name of the standard table.
If an adjustment to a standard table is used, describe the adjustment.
Complete decrement tables for each demographic assumption.
If a standard table is used, provide the name of the table.
Assumptions regarding the probability that future retirees will elect each optional form of benefit.
Assumptions regarding the probability of benefit commencement by age for participants who have terminated with deferred benefits or who are assumed to terminate with deferred benefits in the future.
Assumptions regarding the probability of benefit commencement by age for participants who have become disabled or who are assumed to become disabled in the future.
Assumption regarding terminated vested participants beyond normal retirement age who, because they have not commenced receiving benefit payments, could be considered to be missing.
Assumptions to fill in other missing data.
A description of the new entrant profile, including the weights applicable to each assumed age of entry.
A description of the assumed contribution rates (expressed in contribution base units) for each year during the projection period.
A description of the assumed contribution base units for each year during the projection period.
Assumption regarding number of contribution base units associated with each active participant.
Any adjustment to payments currently scheduled for already withdrawn employers to reflect the probability of non-payment of those amounts prior to the end of the payment period (for example, due to bankruptcy of the employer).
Assumptions for withdrawal liability payments related to future employer withdrawals, if any.
The assumed expenses charged to the plan other than investment-related expenses.
A description of any approximation or data grouping techniques that were used.
A description of any changes to the cash flow projections that would normally be provided by the actuarial software, including both changes to the programming that affect the results generated by the software and modifications to the results generated by the software.
Part 2 - Supporting documentation for selection of certain assumptions.
Applicants must provide the following supporting documentation for the selection of certain assumptions. In addition, if any of those assumptions were selected based on other relevant data, applicants must provide that data.
Provide the components of the target portfolio used in the projections, expressed in terms of the asset classes used for setting the plan’s investment policy.
Allocate the components of the target portfolio among the asset classes listed below. If the target portfolio includes an asset class not included in the list, identify that asset class and its portfolio weight, and include that asset class in the asset class listed below that it most closely resembles in terms of the expected net return, standard deviation, and correlations.
If the mix of assets for the target portfolio differs from the current mix of assets, identify the extent of the difference and explain the reason for the difference.
If the mix of assets is expected to vary over time, explain how and why the mix of assets is expected to vary.
To the extent that the net investment return assumptions for the asset classes vary over time but the investment return assumptions used for the deterministic projections do not, a description of how the investment return assumptions used for the deterministic projections take into account the assumed amount of plan assets (which reflect prior negative or positive assumed cash flows) over time.
Provide the inflation rate or rates inherent in the net investment returns.
Provide the investment-related expense inherent in the net investment return for the target portfolio, expressed as a percentage of that portfolio.
Provide any study of the plan’s demographic experience performed over the last ten years.
Provide any liability gain or loss analysis performed over the last ten years. If the gain or loss analysis is by source, provide the results by source.
Provide the percentage of the plan population that is married.
Provide the distribution of each optional form of benefit selected at retirement for the last five years.
Provide the retirement rates by age for benefit commencements during the last 5 years, separately for active and terminated vested participants.
If the mortality rates are based on a published experience study, provide a citation to the study. If the mortality rates are based on an unpublished experience study, provide a copy of the study.
If a plan’s participants consist primarily of blue-collar participants, the experience study used in developing the blue-collar mortality rates in the RP-2014 Mortality Tables Report issued by the Society of Actuaries (available at https://www.soa.org/Research/Experience-Study/pension/research-2014-rp.aspx) may be treated as representative of the expected mortality experience for the plan.
For all other plans, the mortality experience used in developing the total data set mortality rates in the RP-2014 Mortality Tables Report may be treated as representative of the expected mortality experience for the participants in the plan.
Describe the process that was used to construct the mortality rates based on that experience study data and the rationale for selecting that process.
If either the blue-collar mortality rates or the total data set mortality rates in the RP-2014 Mortality Tables Report are used, this process can be described by cross-reference to the RP-2014 Mortality Tables Report.
If the mortality table constructed from the experience study differs from the published mortality table constructed from the experience study, provide information and analysis as to the process used to construct the mortality table and why the mortality table used is more appropriate for the plan than the published mortality table. For example, if the mortality table was determined by applying the MP-2016 mortality improvement rates to the experience study data (rather than the MP-2014 mortality improvement rates), explain why that was done.
If a plan uses an adjustment to a published mortality table, identify that adjustment, and provide information and analysis for the conclusion that the plan has sufficient mortality experience such that the results of an experience study (or gain and loss analysis) for the plan are fully or partially credible. For example, for each of the last three to five completed plan years, provide, for non-disabled retirees only, the amount-weighted mortality rates at each age from 50 to 110. These amount-weighted mortality rates are determined using a numerator equal to the total pension amounts (annualized at the beginning of the year) for those at each attained age who died during the year and a denominator equal to the total pension amounts (annualized at the beginning of the year) paid at each attained age.
The expectation for future mortality improvement for the plan participants is not the same as the expectation for future mortality improvement in the United States, as projected using the techniques described in either of those reports.
A distribution of ages of all new entrants (whether active or terminated) for each of last five years in accordance with the chart below.
A description of the extent to which a material proportion of the new entrants over the last five years have had prior vesting service or benefit service.
Explain the historical trends experienced by the plan with respect to contribution base units and contribution rates.
Explain the rationale for the assumptions for contribution base units (including an explanation of the consistency between these assumptions and the assumed rate of future employer withdrawals).
Explain the rationale for the assumptions for contribution rates.
Describe the plan’s experience with employer withdrawals that occurred during the last 5 years, including an indication of the proportion of required withdrawal liability payments that have been made in full and the proportion of required withdrawal liability payments that have not been made in full (for example, due to employer bankruptcies).
Describe the plan’s experience for take-up of each benefit/contribution schedule made available to bargaining units under the rehabilitation plan.
Provide information and analysis to support any approximation techniques that were used.
Provide information and analysis to support any changes to the cash flow projections that would normally be generated by the actuarial software, including both changes to the programming that affect the results generated by the software and modifications to the results generated by the software.
Deterministic projections. If any actuarial assumptions used for the deterministic projections under section 4.02(1) of this revenue procedure differ from those used under section 3.01 of this revenue procedure, provide the information and analysis that supports the selection of the different assumptions.
Stochastic projections. If any actuarial assumptions used for stochastic projections described in section 4.02(2) of this revenue procedure differ from those used for deterministic projections described in section 4.02(1) of this revenue procedure, provide the information and analysis that supports the selection of the different assumptions.
With the exception of the acts described below, I authorize my representative(s) to receive and inspect information, including confidential tax information, and to perform acts that I can perform with respect to the attached application dated ______________ for suspension of benefits under § 432(e)(9). For example, my representative(s) shall have the authority to sign any agreements, consents, or similar documents.
a. Attorney—a member in good standing of the bar of the highest court of the jurisdiction shown below.
b. Certified Public Accountant—duly qualified to practice as a certified public accountant in the jurisdiction shown below.
d. Officer—a bona fide officer of the Applicant.
e. Full-Time Employee—a full-time employee of the Applicant.
f. Enrolled Actuary—enrolled as an actuary by the Joint Board for the Enrollment of Actuaries under 29 U.S.C. 1242 (the authority to practice before the Internal Revenue Service is limited by section 10.3(d) of Circular 230).
g. Enrolled Retirement Plan Agent.
Yes No N/A 1. Does the application include an original signature of the plan sponsor or an authorized representative of the plan sponsor? See section 2.01 of this revenue procedure.
how the suspension affects these individuals differently? See section 2.02 of this revenue procedure.
Yes No N/A 3. Does the application include a penalties-of-perjury statement signed by an authorized trustee on behalf of the board of trustees? See Section 2.03 of this revenue procedure.
Yes No N/A 4. Does the application include a statement, signed by an authorized trustee on behalf of the board of trustees, acknowledging that the application and the application’s supporting material will be publicly disclosed on the Treasury Department’s website? See section 2.04 of this revenue procedure.
separately identifying the available resources (and the market value of assets and changes in cash flow) during each of those years? See section 3.01 of this revenue procedure.
separately identifying the available resources (and the market value of assets and changes in cash flow) during each of those years? See section 3.02 of this revenue procedure.
Yes No N/A 7. Does the application include the plan sponsor’s determination of projected insolvency that includes the documentation set forth in section 5 of the revenue procedure? See section 3.03 of this revenue procedure.
if applicable, the age-based limitation taking into account both the guarantee-based limitation and the disability-based limitation? See section 4.01 of this revenue procedure.
Yes No N/A 9. Does the application include a demonstration that the proposed suspension is reasonably estimated to achieve the level necessary to avoid insolvency for the extended period, including illustrations regarding the plan’s solvency ratio and available resources? See section 4.02(1) of this revenue procedure.
Yes No N/A 10. Does the application include an illustration that the proposed suspension is reasonably estimated to achieve the level necessary to avoid insolvency for the extended period utilizing stochastic projections? (This illustration is optional if the plan is not required to appoint a retiree representative under § 432(e)(9)(B)(v)(I).) See section 4.02(2) of this revenue procedure.
a separate identification of the available resources (and the market value of assets and changes in cash flow) during each of those years? See section 4.03 of this revenue procedure.
an explanation of how any difference in treatment among categories or groups of individuals results from a reasonable application of the relevant factors? See section 4.04 of this revenue procedure.
Yes No N/A 13. Does the application include a copy of the notices (excluding personally identifiable information) that meet the requirements under § 432(e)(9)(F)? See section 4.05(1) of this revenue procedure.
Yes No N/A 14. Does the application include a description of the efforts that are being taken to contact participants, beneficiaries in pay status, and alternate payees? See section 4.05(2) of this revenue procedure.
Yes No N/A 15. Does the application describe the steps the plan sponsor has taken to ensure that notices delivered electronically are reasonably accessible to the recipients? See section 4.05(3) of this revenue procedure.
Yes No N/A 16. Does the application include a list of each employer who has an obligation to contribute under the plan and each employee organization representing participants under the plan? See section 4.05(4) of this revenue procedure.
Yes No N/A 17. Does the application include information on past and current measures taken to avoid insolvency? See section 5.01 of this revenue procedure.
Yes No N/A 18. Does the application include information regarding the plan factors described in § 432(e)(9)(C)(ii), for the past 10 plan years immediately preceding the plan year in which the application is submitted? See section 5.02 of this revenue procedure.
Yes No N/A 19. Does the application describe how the plan sponsor took into account – or did not take into account – the factors listed in section 5.02 of this revenue procedure in the determination that all reasonable measures were taken to avoid insolvency? See section 5.03 of this revenue procedure.
past and anticipated contribution increases under the plan on employer attrition and retention levels? See section 5.03 of this revenue procedure.
Yes No N/A 21. Does the application include a discussion of any other factors the plan sponsor took into account including how and why those factors were taken into account? See section 5.04 of this revenue procedure.
Yes No N/A 22. Does the application include a copy of the proposed ballot, excluding the information regarding the statement in opposition, the individualized estimate, and the voting procedures? See section 6.01 of this revenue procedure.
Yes No N/A 23. Does the application indicate whether the plan sponsor is requesting approval from PBGC of a proposed partition under section 4233 of ERISA? See section 6.02 of this revenue procedure.
Yes No N/A 24. If the answer to item 23 is yes, does the application specify the effective date of the proposed partition and include a plan-year-by-plan-year projection of the amount of the reduction in benefit payments attributable to the partition? See section 6.02 of this revenue procedure.
an explanation of any differences among the assumptions used for various purposes? See section 6.03 and Appendix B of this revenue procedure.
the rate of return on plan assets? See section 6.04 of this revenue procedure.
Yes No N/A 27. Does the application include deterministic projections of the sensitivity of the plan’s solvency ratio throughout the extended period by taking into account the more conservative assumptions of investment experience and future contribution base units than assumed elsewhere in the application? See section 6.05 of this revenue procedure.
the plan’s funded percentage? See section 6.06 of this revenue procedure.
to specify that the plan sponsor will not modify these amendments, notwithstanding any other provision of the plan document? See section 6.07 of this revenue procedure.
Yes No N/A 30. Does the application indicate whether the plan is a plan described in § 432(e)(9)(D)(vii) and, if it is, how that is reflected in the proposed benefit suspension? See section 6.08.
Yes No N/A 31 Does the application include a narrative statement of the reasons the plan is in critical and declining status? See section 6.09.
Yes No N/A 32. Does the application include the required plan sponsor identification and contact information? See section 7.01 of this revenue procedure.
Yes No N/A 33. Does the application include the required plan identification information? See section 7.02 of this revenue procedure.
Yes No N/A 34. Does the application include the required retiree representative information (if applicable)? See section 7.03 of this revenue procedure.
Yes No N/A 35. Does the application include the required enrolled actuary information? See section 7.04 of this revenue procedure.
Yes No N/A 36. Does the application include a designation of power of attorney for each authorized representative who will represent the plan sponsor in connection with the application? See section 7.05 and Appendix C of this revenue procedure.
the most recent determination letter? See section 7.06 of this revenue procedure.
Yes No N/A 38. Does the application include the required excerpts from the relevant collective bargaining agreements and side agreements? See section 7.07 of this revenue procedure.
Yes No N/A 39. Does the application include the required excerpts from the most recently filed Form 5500? See section 7.08 of this revenue procedure.
Yes No N/A 40. Does the application include the most recently updated rehabilitation plan? See section 7.09 of this revenue procedure.
Yes No N/A 41 Does the application include the two most recent actuarial valuation reports? See section 7.10 of this revenue procedure.
Yes No N/A 42. Does the application include this checklist, completed and placed on top of the application? See section 7.11 of this revenue procedure and this Appendix D.
the date on which the Treasury Department indicated that the application is a candidate for resubmission review? See section 8 of this revenue procedure.
 Section 201 of MPRA made amendments to section 305 of ERISA that are parallel to the amendments to § 432(e)(9) of the Code and directed the Treasury Department to publish guidance to implement these provisions under ERISA as well as the Code. See also section 101 of Reorganization Plan No. 4 of 1978 (43 FR 47713). Accordingly, the provisions of this revenue procedure pertaining to § 432(e)(9) of the Code apply also for purposes of the corresponding provisions of section 305(e)(9) of ERISA. Furthermore, the Secretary’s approval of a proposed suspension would apply for purposes of section 305(e)(9) of ERISA, as well for purposes of § 432(e)(9) of the Code.
 Section 7.01(13) of Rev. Proc. 2017–1 provides that the following parties may be authorized representatives if appropriately accredited or authorized: attorney, certified public accountant, enrolled agent, enrolled actuary, and enrolled retirement plan agent.
 The sample calculations submitted pursuant to this section 4.01 must not include personally identifiable information with respect to any individual, such as a name or Social Security number.
 Under the limitations contained in this definition, the accrual rate is determined based on a monthly benefit eligible for the PBGC guarantee that is no greater than the monthly benefit payable under the plan at normal retirement age in the form of a single life annuity (so that, for example, the benefit used to determine the accrual rate does not reflect an actuarial increase related to delayed retirement or increased initial payments that are the result of benefit payments in the form of a social security level income option). In addition, the accrual rate is determined without regard to any reduction under § 411(a)(3)(E) of the Code. In order to determine the accrual rate, the monthly benefit is divided by the participant’s years of credited service (which cannot exceed 1 year for any year of participation).
 Submission of the plan document and amendments to the Treasury Department as part of the application for approval of a proposed suspension under this revenue procedure will not be treated as a request to the IRS for a favorable determination on the qualified status of the plan under § 401 or the exempt status of the related trust under § 501(a). For procedures governing an application to the IRS for a favorable determination under §§ 401 and 501(a), see Rev. Proc. 2017–4, 2017–1 I.R.B. 146, and Rev. Proc. 2016–37, 2016–29 I.R.B. 136, as modified.
Partial withdrawal of notice of proposed rulemaking.
This document withdraws the remaining part of a notice of proposed rulemaking containing proposed regulations that would have required an exchange or distribution of net value for certain corporate formations and reorganizations to qualify for nonrecognition treatment under the Internal Revenue Code (Code). Other parts of the notice of proposed rulemaking were previously adopted as final regulations. The proposed regulations being withdrawn also addressed the treatment of certain distributions not qualifying for tax-free treatment under section 332 of the Code. The proposed regulations being withdrawn would have affected corporations and their shareholders.
As of July 13, 2017, the proposed revisions to § 1.332–2(b) and (e); the proposed addition of Example 2 to § 1.332–2(e); the proposed additions of § 1.351–1(a)(1)(iii) and (a)(1)(iv); the proposed addition of Example 4 to § 1.351–1(a)(2); the proposed amendments to § 1.368–1(a) and (b); the proposed addition of § 1.368–1(f); and the proposed revision to § 1.368–2(d)(1) in the notice of proposed rulemaking (REG–163314–03) that was published in the Federal Register (70 FR 11903) on March 10, 2005 are withdrawn.
Jean Broderick at (202) 317-6848 (not a toll-free number).
On March 10, 2005, the Department of the Treasury (the Treasury Department) and the IRS published a notice of proposed rulemaking (REG–163314–03) in the Federal Register (70 FR 11903) containing proposed regulations under sections 332, 351, and 368 (2005 Proposed Regulations). The 2005 Proposed Regulations generally would have provided that the non-recognition rules in subchapter C of chapter 1 of subtitle 1 of the Code do not apply unless there is an exchange (or, in the case of section 332, a distribution) of net value (the net value requirement). The 2005 Proposed Regulations also provided that section 332 would apply only if the recipient corporation receives some payment for each class of stock it owns in the liquidating corporation. Finally, the 2005 Proposed Regulations provided guidance on the circumstances in which (and the extent to which) creditors of a corporation are treated as proprietors of the corporation in determining whether continuity of interest is preserved in a potential reorganization (Creditor Continuity of Interest).
On December 12, 2008, the Treasury Department and the IRS adopted the Creditor Continuity of Interest provisions of the 2005 Proposed Regulations as final regulations (TD 9434) published in the Federal Register (73 FR 75566). Minor portions of the 2005 Proposed Regulations that reflected statutory changes to sections 332 and 351 were adopted as final regulations as part of a Treasury decision adopting final regulations under sections 334(b)(1)(B) and 362(e)(1) (TD 9759), published in the Federal Register (81 FR 17066) on March 28, 2016. The Treasury Department and the IRS have decided to withdraw the remainder of the 2005 Proposed Regulations.
The Treasury Department and the IRS are of the view that current law is sufficient to ensure that the reorganization provisions and section 351 are used to accomplish readjustments of continuing interests in property held in modified corporate form. With respect to section 332, the holdings of H.K. Porter Co. v. Commissioner, 87 T.C. 689 (1986), Spaulding Bakeries Inc. v. Commissioner, 27 T.C. 684 (1957), aff’d, 252 F.2d 293 (2d Cir., 1958), H.G. Hill Stores, Inc. v. Commissioner, 44 B.T.A. 1182 (1941), Rev. Rul. 2003–125, 2003–2 C.B. 1243, Rev. Rul. 68–602, 1968–2 C.B. 135, Rev. Rul. 68–359, 1968–2 C.B. 161, and Rev. Rul. 59–296, 1959–2 C.B. 87, continue to reflect the position of the Treasury Department and the IRS.
The principal author of this withdrawal notice is Jean Broderick of the Office of Associate Chief Counsel (Corporate). However, other personnel from the Treasury Department and the IRS participated in its development.
Accordingly, under the authority of 26 U.S.C. 7805, the Treasury Department and the IRS withdraw the proposed revisions to § 1.332–2(b) and (e); the proposed addition of Example 2 to § 1.332–2(e); the proposed additions of § 1.351–1(a)(1)(iii) and (a)(1)(iv); the proposed addition of Example 4 to § 1.351–1(a)(2); the proposed amendments to § 1.368–1(a) and (b); the proposed addition of § 1.368–1(f); and the proposed revision to § 1.368–2(d)(1) in the notice of proposed rulemaking (REG–163314–03) that was published in the Federal Register (70 FR 11903) on March 10, 2005.
Kirsten B. Wielobob Deputy Commissioner of Services and Enforcement.

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