Internal Revenue Bulletin 2015-48 (PDF rendition): IRS Revenue Rulings

Preserve advance releases and the authoritative Internal Revenue Bulletin rendition; directory timestamps are file-publication metadata, not legal effective dates. HTML bulletins begin June 2003; earlier available issues require full PDF parsing. Whole bulletin rendition: numbered items are identified below; other legal material and publisher context remain included. This is not a new standalone advance release.

HIGHLIGHTS
OF THIS ISSUE
These synopses are intended only as aids to the reader in
identifying the subject matter covered. They may not be
relied upon as authoritative interpretations.
INCOME TAX
Rev. Rul. 2015–24, page 687.
Section 1274A—inflation adjusted numbers for 2016. This
ruling provides the dollar amounts, increased by the 2016
inflation adjustments, for section 1274A of the Code. Revenue
Ruling 2014 –30 supplemented and superseded.
Notice 2015–78, page 690.
This notice provides guidance regarding qualified student loan
bonds under section 144(b) of the Internal Revenue Code
(Code) to clarify certain requirements for tax-exempt bond
financing for loan programs of general application approved by
a State under section 144(b)(1)(B) (State Supplemental Loan
programs). (Except as otherwise expressly provided, section
references in this notice are to the Code.This notice addresses:
(1) eligibility of borrowers of loans through State Supplemental
Loan programs; (2) the application of the requirement under
section 144(b)(3) that the student have a nexus to the State
(student nexus requirement) for loans made to refinance student
loans (refinancing loans); (3) the loan size limitation for State
Supplemental Loans; and (4) the types of student loans that may
be refinanced with a State Supplemental Loan.
EMPLOYEE PLANS
Notice 2015– 80, page 691.
This notice sets forth updates on the corporate bond monthly
yield curve, the corresponding spot segment rates for Novem-
ber 2015 used under § 417(e)(3)(D), the 24-month average
segment rates applicable for November 2015, 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 Trans-
portation Funding Act of 2014 (HATFA).
T.D. 9743, page 679.
These final regulations permit a statutory hybrid plan with an
interest crediting rate that is not permitted under the final
hybrid plan regulations to be amended to comply with the
requirement that the plan’s interest crediting rate not exceed a
market rate of return without violating the anti-cutback rules.
These regulations also delay certain applicability dates under
the final hybrid plan regulations.
EXEMPT ORGANIZATIONS
Announcement 2015–27, page 694.
Serves notice to potential donors of organizations that have
recently filed a timely declaratory judgment suit under section
7428 of the Code, challenging revocation of its status as an
eligible donee under section 170(c)(2).
Finding Lists begin on page ii.
Bulletin No. 2015– 48
November 30, 2015

The IRS Mission
Provide America’s taxpayers top-quality service by helping
them understand and meet their tax responsibilities and en-
force the law with integrity and fairness to all.
Introduction
The Internal Revenue Bulletin is the authoritative instrument of
the Commissioner of Internal Revenue for announcing official
rulings and procedures of the Internal Revenue Service and for
publishing Treasury Decisions, Executive Orders, Tax Conven-
tions, legislation, court decisions, and other items of general
interest. It is published weekly.
It is the policy of the Service to publish in the Bulletin all
substantive rulings necessary to promote a uniform application
of the tax laws, including all rulings that supersede, revoke,
modify, or amend any of those previously published in the
Bulletin. All published rulings apply retroactively unless other-
wise indicated. Procedures relating solely to matters of internal
management are not published; however, statements of inter-
nal practices and procedures that affect the rights and duties
of taxpayers are published.
Revenue rulings represent the conclusions of the Service on
the application of the law to the pivotal facts stated in the
revenue ruling. In those based on positions taken in rulings to
taxpayers or technical advice to Service field offices, identify-
ing details and information of a confidential nature are deleted
to prevent unwarranted invasions of privacy and to comply with
statutory requirements.
Rulings and procedures reported in the Bulletin do not have the
force and effect of Treasury Department Regulations, but they
may be used as precedents. Unpublished rulings will not be
relied on, used, or cited as precedents by Service personnel in
the disposition of other cases. In applying published rulings and
procedures, the effect of subsequent legislation, regulations,
court decisions, rulings, and procedures must be considered,
and Service personnel and others concerned are cautioned
against reaching the same conclusions in other cases unless
the facts and circumstances are substantially the same.
The Bulletin is divided into four parts as follows:
Part I.—1986 Code.
This part includes rulings and decisions based on provisions of
the Internal Revenue Code of 1986.
Part II.—Treaties and Tax Legislation.
This part is divided into two subparts as follows: Subpart A, Tax
Conventions and Other Related Items, and Subpart B, Legisla-
tion and Related Committee Reports.
Part III.—Administrative, Procedural, and Miscellaneous.
To the extent practicable, pertinent cross references to these
subjects are contained in the other Parts and Subparts. Also
included in this part are Bank Secrecy Act Administrative Rul-
ings. Bank Secrecy Act Administrative Rulings are issued by
the Department of the Treasury’s Office of the Assistant Sec-
retary (Enforcement).
Part IV.—Items of General Interest.
This part includes notices of proposed rulemakings, disbar-
ment and suspension lists, and announcements.
The last Bulletin for each month includes a cumulative index for
the matters published during the preceding months. These
monthly indexes are cumulated on a semiannual basis, and are
published in the last Bulletin of each semiannual period.
The contents of this publication are not copyrighted and may be reprinted freely. A citation of the Internal Revenue Bulletin as the source would be appropriate.
November 30, 2015Bulletin No. 2015– 48

Part I. Rulings and Decisions Under the Internal Revenue Code
of 1986
26 CFR 1.411(a)(13)–1: Statutory Hybrid Plans;
1.411(b)(5)–1: Reduction in rate of benefit accrual
under a defined benefit plan.
T.D. 9743
DEPARTMENT OF THE
TREASURY
Internal Revenue Service
26 CFR Part 1
Transitional Amendments to
Satisfy the Market Rate of
Return Rules for Hybrid
Retirement Plans
AGENCY:Internal Revenue Service (IRS),
Treasury.
ACTION: Final regulations.
SUMMARY: This document contains fi-
nal regulations that provide guidance re-
garding certain amendments to applicable
defined benefit plans. Applicable defined
benefit plans are defined benefit plans that
use a lump sum-based benefit formula,
including cash balance plans and pension
equity plans, as well as other plans that
have formulas with an effect similar to a
lump sum-based benefit formula. These
final regulations relate to previously is-
sued final regulations that specify permit-
ted interest crediting rates for purposes of
the requirement that an applicable defined
benefit plan not provide for interest credits
(or equivalent amounts) at an effective
rate that is greater than a market rate of
return.These final regulations permit a plan
sponsor of an applicable defined benefit
plan that does not comply with the market
rate of return requirement to amend the plan
in order to change to an interest crediting
rate that is permitted under the previously
issued final hybrid plan regulations without
violating the anti-cutback rules of section
411(d)(6). These regulations affect spon-
sors, administrators, participants, and bene-
ficiaries of these plans.
DATES:Effective Date: These regula-
tions are effective on November 16, 2015.
Applicability Date: These regulations
generally apply to plan amendments made
on or after September 18, 2014 (or an
earlier date as elected by the taxpayer).
These regulations cease to apply for
amendments made on or after the first day
of the first plan year that begins on or after
January 1, 2017 (or, for collectively bar-
gained plans, on or after a later date spec-
ified in the regulations).
FOR FURTHER INFORMATION
CONTACT: Neil S. Sandhu or Linda S. F.
Marshall at (202) 317-6700 (not a toll-free
number).
SUPPLEMENTARY INFORMATION:
Background
This document contains amendments
to the Income Tax Regulations (26 CFR
part 1) under sections 411(a)(13) and
411(b)(5) of the Internal Revenue Code
(Code).
Generally, a defined benefit pension plan
must satisfy the minimum vesting standards
of section 411(a) and the accrual require-
ments of section 411(b) in order to be qual-
ified under section 401(a) of the Code. Sec-
tions 411(a)(13) and 411(b)(5), which
modify the minimum vesting standards of
section 411(a) and the accrual requirements
of section 411(b), were added to the Code
by section 701(b) of the Pension Protection
Act of 2006, Public Law 109–280 (120 Stat.
780 (2006)) (PPA ’06). Sections 411(a)(13)
and 411(b)(5) and certain related effective
date provisions were subsequently amended
by the Worker, Retiree, and Employer Re-
covery Act of 2008, Public Law 110–458
(122 Stat. 5092 (2008)) (WRERA ’08).
Under section 411(b)(5)(B)(i), a statu-
tory hybrid plan is treated as failing to
satisfy the requirements of section
411(b)(1)(H) (which provides that the rate
of an employee’s benefit accrual must not
be reduced because of the attainment of
any age) if the terms of the plan provide
any interest credit (or an equivalent
amount) for any plan year at a rate that is
in excess of a market rate of return. Sec-
tion 411(b)(5)(B)(i) is generally effective
for plan years beginning after December
31, 2007.
Section 411(d)(6) provides generally
that a plan does not satisfy section 411 if
an amendment to the plan decreases a
participant’s accrued benefit. For this pur-
pose, a plan amendment that has the effect
of eliminating or reducing an early retire-
ment benefit or a retirement-type subsidy
or eliminating an optional form of benefit
with respect to benefits attributable to ser-
vice before the amendment is treated as
reducing accrued benefits.
Sections 204(b)(5)(B)(i) and 204(g) of
the Employee Retirement Income Secu-
rity Act of 1974, Public Law 93–406 (88
Stat. 829 (1974)), as amended (ERISA),
contain rules that are parallel to sections
411(b)(5)(B)(i) and 411(d)(6), respec-
tively. Under section 101 of Reorganiza-
tion Plan No. 4 of 1978 (43 FR 47713),
the Secretary of the Treasury has interpre-
tive jurisdiction over the subject matter
addressed in these final regulations for
purposes of ERISA, as well as the Code.
Thus, these final regulations apply for pur-
poses of sections 411(b)(5)(B)(i) and
411(d)(6) of the Code, as well as for pur-
poses of sections 204(b)(5)(B)(i) and
204(g) of ERISA.
Section 1.411(d)–4, A–2(b)(1), of the
Income Tax Regulations provides, in part,
that the Commissioner may, consistent
with the provisions of § 1.411(d)–4, pro-
vide for the elimination or reduction of
section 411(d)(6) protected benefits that
have already accrued to the extent that
such elimination or reduction is necessary
to permit compliance with other require-
ments of section 401(a). The Commis-
sioner may exercise this authority only
through the publication of revenue rul-
ings, notices, and other documents of gen-
eral applicability.
Section 1.411(d)–4, A–2(b)(2)(i), pro-
vides that a plan may be amended to elim-
inate or reduce a section 411(d)(6) pro-
tected benefit, within the meaning of
§ 1.411(d)–4, A–1, if the following three
requirements are met: the amendment
constitutes timely compliance with a
change in law affecting plan qualification;
there is an exercise of section 7805(b)
relief by the Commissioner; and the elim-
ination or reduction of the section
411(d)(6) protected benefit is made only
to the extent necessary to enable the plan
Bulletin No. 2015– 48November 30, 2015
679

to continue to satisfy the requirements for
qualified plans.
Final regulations (TD 9505) (2010 fi-
nal hybrid plan regulations) were pub-
lished by the Treasury Department and the
IRS in theFederal Registeron October
19, 2010 (75 FR 64123). Additional final
regulations (TD 9693) (2014 final hybrid
plan regulations) were published by the
Treasury Department and the IRS in the
Federal Registeron September 19, 2014
(79 FR 56442) (collectively, the 2010 and
2014 final hybrid plan regulations are re-
ferred to herein as the final hybrid plan
regulations). The final hybrid plan regula-
tions provide, effective for plan years that
begin on or after January 1, 2016, a list of
interest crediting rates and combinations
of rates that satisfy the requirement of
section 411(b)(5)(B)(i) that a plan not pro-
vide an effective rate of return in excess of
a market rate of return, while not permit-
ting other rates. The provisions that pro-
vide for a list of rates are set forth at
§ 1.411(b)(5)–1(d)(1)(iii), (d)(1)(vi), and
(d)(6)(i).
Interest crediting rates can be broadly
characterized as either investment-based
rates or rates that are not investment-
based rates. An investment-based rate is a
rate of return provided by actual invest-
ments, taking into account the return at-
tributable to any change in the value of the
underlying investments. A rate of return
that is based on the rate of return for an
index that measures the change in the
value of investments can also be consid-
ered to be an investment-based rate. Rates
that are not investment-based rates are
either fixed rates of interest or bond-based
rates (such as yields to maturity of bonds).
Section 1.411(b)(5)–1(d)(3) and (d)(4)
sets forth permitted rates that are not
investment-based rates, such as the third
segment rate described in section 417(e)(3)(D)
or 430(h)(2)(C)(iii), theyield on 30-year
Treasury Constant Maturities, and a
fixed 6 percent rate of interest. Section
1.411(b)(5)–1(d)(5)sets forth permitted
investment-based rates, such as the rate of
return on certain regulated investment
companies (RICs), as defined in section
851, and the rate of return on plan assets.
As provided in § 1.411(b)(5)–1(d)(6), cer-
tain annual (or more frequent) floors are
permitted in combination with the bond-
based rates and cumulative floors (in ex-
cess of the cumulative zero floor required
under section 411(b)(5)(i)(II)) are permit-
ted in combination with either the bond-
based rates or the investment-based rates.
Section 1.411(b)(5)–1(e)(3) provides
that the right to future interest credits de-
termined in the manner specified under
the plan and not conditioned on future
service is a factor that is used to determine
the participant’s accrued benefit for pur-
poses of section 411(d)(6).Accordingly,
section 411(d)(6) protection applies not only
to interest credits that have already been
credited but also to future interest credits
that are not conditioned on future service.
Proposed hybrid plan transition regula-
tions (REG–111839–13) (2014 proposed
regulations) were published by the Trea-
sury Department and the IRS in theFed-
eral Registeron September 19, 2014 (79
FR 56305). The2014 proposed regulations
would permit an amendment to change the
interest crediting rate under a hybrid plan
from a rate not on the list to a rate on the list
of interest crediting rates and combinations
of rates that satisfy the requirement of sec-
tion 411(b)(5)(B)(i) for plan years that begin
on or after January 1, 2016.
Written comments in response to the
2014 proposed regulations were received,
and a public hearing was held on January
9, 2015.After consideration of the com-
ments received, the provisions in the 2014
proposed regulations are adopted by this
Treasury decision, subject to a number of
changesthat are summarized in this preamble.
Explanation of Provisions
A number of commenters requested
that the regulations provide for sufficient
time for plan sponsors to implement
amendments pursuant to these regulations
to change a plan’s interest crediting rate to
a permissible rate. In addition, these com-
menters pointed out that these amend-
ments are often interrelated with amend-
ments required to comply with the 2014
final hybrid plan regulations, and that plan
sponsors often consider and implement all
of the required amendments at the same
time. In response to these comments,
these final regulations delay the applica-
bility date of certain provisions under sec-
tions 411(a)(13) and 411(b)(5) in the final
hybrid plan regulations, including those
provisions that provide a list of interest
crediting rates and combinations of rates
that satisfy the requirement of section
411(b)(5)(B)(i) that the plan not provide
an effective rate of return in excess of a
market rate of return. Under these regula-
tions, these provisions are generally effec-
tive for plan years that begin on or after
January 1, 2017.
Prior to the first day of the first plan year
that begins on or after January 1, 2017, a
plan that uses an interest crediting rate that
is not permitted under the final hybrid plan
regulations must be amended to change to
an interest crediting rate that is permitted
under those regulations. Although a plan is
permitted to be amended to change the in-
terest crediting rate with respect to benefits
that have not yet accrued, an amendment
that reduces the interest crediting rate with
respect to benefits that have already accrued
would ordinarily be impermissible under
section 411(d)(6).
In order to resolve the conflict between
the market rate of return rules of section
411(b)(5)(B)(i) and the anti-cutback rules
of section 411(d)(6), these regulations
permit a plan with a noncompliant interest
crediting rate to be amended with respect
to benefits that have already accrued so
that its interest crediting rate complies
with the market rate of return rules. If the
applicable requirements of these regula-
tions are satisfied, such an amendment is
permitted with respect to benefits that
have already accrued, but only with re-
spect to interest credits that are credited
for interest crediting periods that begin on
or after the later of the effective date of
the amendment or the date the amendment
is adopted (the applicable amendment
date within the meaning of § 1.411(d)–
3(g)(4)).
1
To qualify for this treatment,
the amendment must be adopted prior to
and effective no later than the applicabil-
ity date of the regulatory market rate of
return rules (generally, the first day of the
first plan year that begins on or after Jan-
uary 1, 2017, with a delayed applicability
date for collectively bargained plans).
Like the 2014 proposed regulations,
these regulations permit amendments that
1
Thus, these regulations do not permit a reduction in the hypothetical account balance as of the applicable amendment date.
November 30, 2015Bulletin No. 2015– 48
680

bring the plan into compliance by chang-
ing the specific feature that causes the
plan’s interest crediting rate to be non-
compliant, while not changing other fea-
tures of the existing rate. If the noncom-
pliant interest crediting rate has more than
one noncompliant feature, then each non-
compliant feature must be addressed sep-
arately in the prescribed manner. Exam-
ples are included to illustrate the
application of these rules.
The standard in these final regulations
for resolving this conflict between section
411(d)(6) and section 411(b)(5)(B)(i) is
generally comparable to the standard un-
der the rules of § 1.411(d)–4, A–2(b)(1)
and (b)(2)(i) with respect to the Commis-
sioner’s exercise of authority to resolve a
conflict between section 411(d)(6) and an-
other qualification requirement under sec-
tion 401(a). The Treasury Department and
the IRS believe this approach is the most
appropriate manner to resolve the conflict
between the market rate of return rules of
section 411(b)(5)(B)(i) and the anti-
cutback rules of section 411(d)(6).
2
If a noncompliant rate involves one or
more variable rates or a variable rate to-
gether with a fixed rate, it is not always
readily apparent which specific feature or
component rate causes the rate to be non-
compliant. In addition, if either the exist-
ing rate or any of the potential corrections
involves variable components, it is impos-
sible to determine with certainty at the
time of amendment the single amendment
that in all cases that will result in the least
reduction to the participant’s accrued ben-
efit as of the participant’s annuity starting
date. Thus, in response to a number of
comments on the 2014 proposed regula-
tions that more flexibility to amend non-
compliant features be provided, the final
regulations in many cases permit a plan
sponsor to choose one of two or more
alternative amendments in order to bring a
plan into compliance.
A number of commenters specifically
requested that the rules in the transition
regulations permit any noncompliant
bond-based rate to be capped at the third
segment rate. The Treasury Department
and the IRS agree that this is an appropri-
ate approach. Accordingly, an additional
option has been added in each case in-
volving bond-based rates so that any non-
compliant variable rate that is not an
investment-based rate (including the
greater of two or more non-investment
based variable rates) may be capped at the
third segment rate. If this approach is
used, the third segment rate cap would
have to satisfy the rules that apply to the
use of the third segment rate as an interest
crediting rate.Thus, the cap could be any of
the third segment rates that may be used as
an interest crediting rate and the cap would
have to use a permissible lookback month
and stability period. Note, however, that if
any noncompliant composite rate is limited
so that it does not exceed a third segment
rate cap, that limit would also apply with
respect to any annual fixed minimum rate
that is part of the noncompliant composite
rate. Therefore, the annual interest crediting
rate (taking into account the cap) could be
lower than the otherwise applicable fixed
minimum rate.
3
A special rule has been added to the
regulations to clarify that an amendment to
correct a noncompliant feature that provides
for a greater interest crediting rate than the
specific amendment set forth in the regula-
tions also does not violate section 411(d)(6).
Thus, for example, in any case in which it is
permissible to address a noncompliant rate
by capping the rate at the third segment rate,
it would also be permissible to address the
noncompliant rate simply by switching to
the third segment rate. Similarly, an amend-
ment to switch to the third segment rate
together with a permitted fixed minimum
rate would be permissible.
These final regulations also provide
flexibility with respect to noncompliant
investment-based rates. In particular, if a
plan credits interest using a noncompliant
investment-based rate and there is no per-
mitted investment-based rate with similar
risk and return characteristics as the plan’s
impermissible rate, then, as an alternative
to the specified corrective amendment that
was in the proposed regulations, an
amendment to switch to the third segment
rate with a 4 percent fixed minimum rate
is permitted. The regulations also clarify
the specified corrective amendment that
was in the proposed regulations by pro-
viding that it is permissible in such a case
to switch to a permitted investment-based
rate that is otherwise similar to the plan’s
impermissible investment-based rate but
without the risk and return characteristics
of the impermissible rate that caused it to
be impermissible (generally requiring the
use of a rate that is less volatile than the
plan’s impermissible investment-based
rate but is otherwise similar to that rate).
The preamble to the 2014 final hybrid
plan regulations contained a discussion of
statutory hybrid plans that permit partici-
pants to choose from among a menu of
hypothetical investment options. Because
of the significant concerns relating to the
use of these plan designs, the Treasury
Department and the IRS continue to study
the issues raised in the preamble to the
2014 final hybrid plan regulations related
to these plans, and it is possible that the
Treasury Department and the IRS will
conclude that such plan designs are not
permitted. Nevertheless, the Treasury De-
partment and the IRS understand that
some of these plans contain one or more
hypothetical investment options that pro-
vide for a rate of return that is not permit-
ted under the final hybrid plan regulations.
A special rule is included in these regula-
tions in order to address the noncompli-
ance that results from the availability of at
least one hypothetical investment option
that provides for an impermissible rate of
return. This special rule provides that the
rules of these final regulations may be
applied separately to correct each imper-
missible hypothetical investment option.
Alternatively, with respect to such a plan
that permitted a participant to choose an
interest crediting rate from among a menu
of hypothetical investment options on Sep-
tember 18, 2014, pursuant to plan provisions
that were adopted on or before September
18, 2014, this special rule provides that the
2
A plan may have been amended to change its interest crediting rate under the rules of section 1107 of PPA ’06. Section 1107 of PPA ’06 provided relief fromthe requirements of section
411(d)(6) for amendments made pursuant to a change in law under PPA ’06 if the amendment was adopted by the last day of the first plan year that began on or after January 1, 2009 (or
2011, in the case of a governmental plan as defined in section 414(d)). If an interest crediting rate adopted under the rules of section 1107 of PPA ’06 is not permitted under the final hybrid
plan regulations, then these final regulations permit a subsequent amendment to change the rate to a rate permitted under the final hybrid plan regulations.
3
This limitation on an otherwise applicable minimum rate may have implications for plans that require an annual minimum rate in order to satisfy the anti-backloading rules of section
411(b)(1).
Bulletin No. 2015– 48November 30, 2015
681

entire menu of investment options may be
treated as an impermissible investment-
based rate for which there is no permitted
investment-based rate with similar risk and
return characteristics (so that the rule of
§ 1.411(b)(5)–1(e)(3)(vi)(C)(7) does not ap-
ply). As a result, plans described in the
preceding sentence may be amended to
eliminate a participant’s ability to choose an
interest crediting rate from among a menu
of hypothetical investment options in accor-
dance with § 1.411(b)(5)–1(e)(3)(vi)(C)(9).
The inclusion of this special rule with re-
spect to plan designs that permit participant
direction of interest crediting rates is merely
intended to address the noncompliance that
results from the availability of a hypotheti-
cal investment option that provides for an
impermissible rate of return, and should not
be construed to create any inference as to
the permissibility of these plan designs in
general.
The preamble to the 2014 proposed
regulations specifically requested com-
ments as to an amendment to bring a plan
into compliance if the plan credits interest
using a composite rate that is an
investment-based rate of return with an
impermissible annual (or more frequent)
fixed or variable rate. Many commenters
requested flexibility to choose among op-
tions in such a case because there is no
single correction that is the best correction
for all cases. The Treasury Department
and the IRS agree that, for this type of
interest crediting rate, no single correction
method is the most appropriate method for
all cases. Therefore, the final regulations
provide that it is permissible either to
eliminate the fixed minimum rate (or any
variable non-investment based rate) and
eliminate any reduction to the investment-
based rate, or to switch to the third seg-
ment rate (preserving any fixed minimum
rate to the maximum extent permitted).
In response to comments inquiring
about the treatment of plans that provide
for a cumulative floor (such as, for exam-
ple, in order to comply with section
411(d)(6) in connection with a prior
amendment to change the plan’s interest
crediting rate on accrued pay credits), the
regulations provide for a special rule that
applies with respect to a participant under
a plan that takes into account a minimum
rate of return that applies less frequently
than annually or that determines the par-
ticipant’s benefit as of the annuity starting
date as the benefit provided by the greatest
of two or more account balances and that
minimum rate or benefit based on two or
more account balances does not satisfy the
market rate of return rules. If this rule
applies, the plan must be amended to pro-
vide that the benefit for a participant is
based solely on the benefit (and the asso-
ciated interest crediting rate with respect
to that benefit) that is greatest for that
participant as of the applicable amend-
ment date for the amendment adopted pur-
suant to these regulations. In addition, the
plan must be further amended pursuant to
the other rules in these regulations if the
remaining interest crediting rate does not
satisfy the market rate of return rules.
In response to comments as to the per-
missibility of rounding interest crediting
rates and the need for the regulations to
provide section 411(d)(6) relief for plans
that use an impermissible rounding rule,
the regulations provide for a rounding rule
and also provide for section 411(d)(6) re-
lief for transitional amendments to com-
ply with this rounding rule. Under the
rounding rule, a plan is not treated as
failing to meet the requirement that a plan
not credit interest at a rate that exceeds a
market rate of return merely because the
plan determines interest credits for an in-
terest crediting period by rounding the
calculated interest rate or rate of return.
Under this rule, an annual rate may be
rounded to the nearest multiple of 25 basis
points (or a smaller rounding interval). If
a plan provides for the crediting of interest
more frequently than annually, then the
rounding interval must not exceed a pro-
rata portion of 25 basis points. Notwith-
standing the preceding sentence, a plan is
permitted to round to the nearest basis
point regardless of the length of the inter-
est crediting period.
Several commenters identified the need
for section 411(d)(6) relief for plans that
provide for rules that apply upon plan
termination that do not comply with the
plan termination rules in the final hybrid
plan regulations. In response to these
comments, the regulations provide for
section 411(d)(6) relief for transitional
amendments made to enable a plan to
comply with the plan termination rules in
the final hybrid plan regulations.
In response to the comment request
included in the 2014 proposed regulations
with respect to all aspects of those pro-
posed rules, the Department of Treasury
and the IRS received a number of com-
ments with respect to provisions of the
2014 final hybrid plan regulations instead
of the 2014 proposed regulations. These
final regulations delay the applicability
date of certain provisions in the 2014 final
hybrid plan regulations (and provide for a
special delayed applicability date for col-
lectively bargained plans), but do not oth-
erwise address comments on provisions of
the 2014 final hybrid plan regulations.
4
Effective/Applicability Dates
These regulations generally apply to plan
amendments made on or after September
18, 2014 (or an earlier date as elected by the
taxpayer), and they do not apply for amend-
ments made on or after the first day of the
first plan year that begins on or after January
1, 2017. However, for collectively bar-
gained plans, these regulations continue to
apply for amendments made before the first
day of the first plan year that begins on or
after January 1, 2019, unless the last collective
bargaining agreement ratified on or before No-
vember 13, 2015 expires before January 1,
2019, inwhich case these regulations cease
to apply to amendments made on or after the
first day of the first plan year that begins on
or after the later of the date on which the last
applicable collective bargaining agreement
expires or January 1, 2017.
Special Analyses
Certain IRS regulations, including this
one, are exempt from the requirements of
Executive Order 12866, as supplemented
4
Proposed regulations (REG–132554–08) under sections 411(a)(13), 411(b)(1), and 411(b)(5) (2010 proposed hybrid plan regulations) were published by the Treasury Department and the
IRS in the Federal Register on October 19, 2010 (75 FR 64197). The Treasury Department and the IRS received written comments on the 2010 proposed hybridplan regulations, and a public
hearing was held on January 26, 2011. The 2014 final hybrid plan regulations, which finalized the 2010 proposed hybrid plan regulations, took into account the comments received prior
to publication of the 2014 final hybrid plan regulations.
November 30, 2015Bulletin No. 2015– 48
682

and reaffirmed by Executive Order 13563.
Therefore, a regulatory impact assessment
is not required. It also has been deter-
mined that section 553(b) of the Admin-
istrative Procedure Act (5 U.S.C. chapter
5) does not apply to these regulations, and
because these regulations do not impose a
collection of information on small entities,
the Regulatory Flexibility Act (5 U.S.C.
chapter 6) does not apply. Pursuant to
section 7805(f) of the Code, the notice of
proposed rulemaking preceding these reg-
ulations was submitted to the Chief Coun-
sel for Advocacy of the Small Business
Administration for comment on its impact
on small business.
Drafting Information
The principal authors of these regula-
tions are Neil S. Sandhu and Linda S. F.
Marshall, Office of Associate Chief Counsel
(Tax Exempt and Government Entities).
However, other personnel from the IRS and
the Treasury Department participated in the
development of these regulations.
*****
Adoption of Amendments to the
Regulations
Accordingly, 26 CFR part 1 is
amended as follows:
PART 1—INCOME TAXES
Paragraph 1. The authority citation for
part 1 continues to read in part as follows:
Authority: 26 U.S.C. 7805***
§ 1.411(a)(13)–1 [Amended]
Par. 2. For each entry listed in the
“Location” column, remove the language
in the “Remove” column and add the lan-
guage in the “Add” column in its place.
LocationRemoveAdd
§ 1.411(a)(13)–1(d)(3)(i),
third sentence
for plan years that begin on or after
January 1, 2016
for plan years described in paragraph
(e)(2)(ii)(A) or (e)(2)(ii)(B) of this
section, as applicable
§ 1.411(a)(13)–1(d)(3)(i),
fifth and sixth sentences
for plan years that begin on or after
January 1, 2016
for plan years described in paragraph
(e)(2)(ii)(A) or (e)(2)(ii)(B) of this
section (as applicable)
§ 1.411(a)(13)–1(d)(4)(ii)(A),
second sentence
for plan years that begin on or after
January 1, 2016
for plan years described in paragraph
(e)(2)(ii)(A) or (e)(2)(ii)(B) of this
section (as applicable)
§ 1.411(a)(13)–1(d)(4)(ii)(C),
second sentence
For plan years that begin on or after
January 1, 2016
For plan years described in paragraph
(e)(2)(ii)(A) or (e)(2)(ii)(B) of this
section (as applicable)
Par. 3. Section 1.411(a)(13)–1 is
amended by revising paragraph (e)(2)(ii)
to read as follows:
§ 1.411(a)(13)–1 Statutory hybrid plans.
*****
(e)***
(2)***
(ii)Special effective date—(A)In gen-
eral. Except as otherwise provided in this
paragraph (e)(2)(ii), paragraphs (b)(2), (3),
and (4) of this section apply to plan years
that begin on or after January 1, 2017.
(B)Collectively bargained plans.In
the case of a plan maintained pursuant to
one or more collective bargaining agree-
ments between employee representatives
and one or more employers ratified on or
before November 13, 2015,that consti-
tutes a collectively bargained plan under
the rules of § 1.436–1(a)(5)(ii)(B), para-
graphs (b)(2), (3), and (4) of this section
apply to plan years that begin on or after
the later of—
(1) January 1, 2017; and
(2) The earlier of—
(i) January 1, 2019; and
(ii) The date on which the last of those
collective bargaining agreements termi-
nates (determined without regard to any
extension thereof on or after November
13, 2015).
*****
§ 1.411(b)(5)–1 [Amended]
Par. 4. For each entry listed in the
“Location” column, remove the language
in the “Remove” column and add the lan-
guage in the “Add” column in its place.
LocationRemoveAdd
§ 1.411(b)(5)–1(b)(1)(ii)(F)For plan years that begin on or after
January 1, 2016
For plan years described in paragraph
(f)(2)(i)(B)(1) or (f)(2)(i)(B)(3)of
this section (as applicable)
§ 1.411(b)(5)–1(b)(1)(iii),
third sentence
for plan years that begin on or after
January 1, 2016
for plan years described in paragraph
(f)(2)(i)(B)(1) or (f)(2)(i)(B)(3)of
this section (as applicable)
Bulletin No. 2015– 48November 30, 2015
683

LocationRemoveAdd
§ 1.411(b)(5)–1(b)(2)(i),
third sentence
for plan years that begin on or after
January 1, 2016
for plan years described in paragraph
(f)(2)(i)(B)(1) or (f)(2)(i)(B)(3)of
this section, as applicable
§ 1.411(b)(5)–1(e)(2)(ii)(B)(1),
second sentence
the first plan year that begins on or
after January 1, 2016
the first plan year described in
paragraph (f)(2)(i)(B)(1)or
(f)(2)(i)(B)(3) of this section
(as applicable)
§ 1.411(b)(5)–1(e)(3)(ii)(D)For plan years that begin on or after
January 1, 2016
For plan years described in paragraph
(f)(2)(i)(B)(1) or (f)(2)(i)(B)(3)of
this section (as applicable)
Par. 5. Section 1.411(b)(5)–1 is
amended by:
1. Adding a new sentence between the
second and third sentences of paragraph
(d)(1)(iv)(A);
2. Adding paragraph (d)(1)(iv)(E);
3. Adding paragraphs (e)(3)(vi) and
(vii); and
4. Revising paragraph (f)(2)(i)(B).
The additions and revisions read as fol-
lows:
§ 1.411(b)(5)–1 Reduction in rate of
benefit accrual under a defined benefit
plan.
*****
(d)***
(1)***
(iv)***
(A)***Inaddition, a plan is permit-
ted to round the calculated interest rate or
rate of return in accordance with para-
graph (d)(1)(iv)(E) of this section.* * *
*****
(E)Rounding of interest crediting rate.
A plan is not treated as failing to meet the
requirements of this paragraph (d) merely
because the plan determines interest cred-
its for an interest crediting period by
rounding the calculated interest rate or
rate of return in accordance with this para-
graph (d)(1)(iv)(E). An annual rate may
be rounded to the nearest multiple of 25
basis points (or a smaller rounding inter-
val). If a plan provides for the crediting of
interest more frequently than annually,
then the rounding interval must not ex-
ceed a pro-rata portion of 25 basis points.
Notwithstanding the preceding sentence, a
plan is permitted to round to the nearest
basis point regardless of the length of the
interest crediting period.
*****
(e)***
(3)***
(vi)Transitional amendments needed
to satisfy the market rate of return rules—
(A)In general. Notwithstanding the re-
quirements of section 411(d)(6), if the re-
quirements set forth in this paragraph
(e)(3)(vi) are satisfied, a plan may be
amended to change its interest crediting
rate with respect to benefits that have al-
ready accrued in order to comply with the
requirements of section 411(b)(5)(B)(i)
and paragraph (d) of this section. A plan
amendment is eligible for the treatment
provided under this paragraph (e)(3)(vi)(A) to
the extent that the amendment modifies an
interest crediting rate that does not satisfy
the requirements of section 411(b)(5)(B)(i)
and paragraph (d) of this section in the
manner specified in paragraph (e)(3)(vi)(C) of
this section.
(B)Rules of application—(1)Multiple
noncompliant features. If a plan’s interest
crediting rate has more than one noncom-
pliant feature as described in paragraph
(e)(3)(vi)(C) of this section, then each
noncompliant feature must be addressed
separately in the manner specified in para-
graph (e)(3)(vi)(C) of this section.
(2)Definition of investment-based rate.
The application of the rules of paragraph
(e)(3)(vi)(C) of this section to an interest
crediting rate depends on whether the inter-
est crediting rate is an investment-based
rate. For purposes of this paragraph
(e)(3)(vi), an investment-based rate is a rate
based on either a rate of return provided by
actual investments (taking into account the
return attributable to any change in the value
of the underlying investments) or a rate of
return for an index that measures the change
in the value of investments. A rate is an
investment-based rate even if it is based
only in part on a rate described in the pre-
ceding sentence.
(3)Timing rules for permitted amend-
ments. The rules under this paragraph
(e)(3)(vi) apply only to a plan amendment
that is adopted prior to and effective no
later than the first day of the first plan year
described in paragraph (f)(2)(i)(B)(1)or
(f)(2)(i)(B)(3) of this section, as applica-
ble. In addition, the rules under this para-
graph (e)(3)(vi) apply to a plan amend-
ment only with respect to interest credits
that are credited for interest crediting pe-
riods that begin on or after the applicable
amendment date (within the meaning of
§ 1.411(d)–3(g)(4)).
(4)Amendments that provide for
greater interest crediting rates. If a plan is
amended in accordance with paragraphs
(e)(3)(vi)(C)(1) through (10) of this sec-
tion to switch from a noncompliant rate to
a compliant rate and is subsequently
amended to switch to a second compliant
rate that can never be less than the first
compliant rate, then the second amend-
ment does not violate section 411(d)(6).
If, instead, the plan is amended to switch
from the noncompliant rate to the second
compliant rate in a single amendment, that
amendment also does not violate section
411(d)(6). For example, if it is permitted
under paragraph (e)(3)(vi)(C) of this sec-
tion to first amend the plan to credit inter-
est using the lesser of the current rate and
a rate described in paragraph (d)(3) of this
section, it is then permissible to amend the
plan to credit interest using that rate de-
scribed in paragraph (d)(3) of this section.
In such a case, it is also permissible to
amend the plan to switch from the current
rate to a rate described in paragraph (d)(3)
of this section in a single amendment.
November 30, 2015Bulletin No. 2015– 48
684

(5)Cumulative floors, including floors
resulting from a prior change in rates
with section 411(d)(6) protection. This
paragraph (e)(3)(vi)(B)(5) applies to a
plan that takes into account a minimum
rate of return that applies less frequently
than annually. This paragraph (e)(3)(vi)(B)(5)
also applies to a plan that determines the
participant’s benefit as of the annuity
starting date as the benefit provided by the
greatest of two or more account balances
(for example, in order to comply with
section 411(d)(6) in connection with a
prior amendment to change the plan’s in-
terest crediting rate). In either case, this
paragraph (e)(3)(vi)(B)(5) applies with re-
spect to a participant only if the require-
ments of paragraph (d)(6) of this section
are not satisfied with respect to that par-
ticipant. If this paragraph (e)(3)(vi)(B)(5)
applies with respect to a participant, the
plan must be amended to provide that the
benefit for the participant is based solely
on the benefit (and the associated interest
crediting rate with respect to that benefit)
that is greatest for that participant as of the
applicable amendment date for the
amendment made pursuant to this para-
graph (e)(3)(vi). In addition, the plan must
be further amended pursuant to the other
rules in this paragraph (e)(3)(vi) if the
remaining interest crediting rate does not
satisfy the requirements of paragraph (d)
of this section.
(6)Plans that permit participant direc-
tion of interest crediting rates. This para-
graph (e)(3)(vi)(B)(6) applies in the case
in which a plan permits a participant to
choose an interest crediting rate from
among a menu of hypothetical investment
options and at least one of those hypothet-
ical investment options provides for an
interest crediting rate that is not permitted
under paragraph (d) of this section (so that
the plan fails to satisfy the requirements of
paragraph (d) of this section). In such a
case, the rules of this paragraph (e)(3)(vi)
may be applied separately to correct each
impermissible investment option. Alterna-
tively, with respect to such a plan that
permitted a participant to choose an inter-
est crediting rate from among a menu of
hypothetical investment options on Sep-
tember 18, 2014, pursuant to plan provi-
sions that were adopted on or before Sep-
tember 18, 2014, the entire menu of
investment options may be treated as an
impermissible investment-based rate for
which there is no permitted investment-
based rate with similar risk and return
characteristics (so that the rule of para-
graph (e)(3)(vi)(C)(7) of this section does
not apply). As a result, plans described in
the preceding sentence may be amended
to eliminate a participant’s ability to
choose an interest crediting rate from
among a menu of hypothetical investment
options in accordance with paragraph
(e)(3)(vi)(C)(9) of this section.
(C)Noncompliant feature and amend-
ment to bring plan into compliance—(1)
Timing or other rules related to determin-
ing interest credits not satisfied. If a plan
has an underlying interest rate that gener-
ally satisfies the rules of paragraph (d) of
this section but that does not satisfy the
rules relating to how interest credits are
determined and credited as set forth in
paragraph (d)(1)(iv) of this section, then
the plan must be amended either—
(i) To correct the aspect of the plan’s
interest crediting rate that fails to comply
with the rules of paragraph (d)(1)(iv) of
this section with respect to its underlying
interest crediting rate; or
(ii) If the plan’s interest crediting rate
is a variable rate that is not an investment-
based rate of return, to provide that the
plan’s interest crediting rate is the lesser
of that variable rate and a rate described in
paragraph (d)(3) of this section that satis-
fies the rules of paragraph (d)(1)(iv) of
this section.
(2)Fixed rate in excess of 6 percent.If
a plan’s interest crediting rate is a fixed
rate in excess of the rate described in
paragraph (d)(4)(v) of this section, then
the plan must be amended to reduce the
interest crediting rate to an annual interest
crediting rate of 6 percent.
(3)Bond-based rate with margin ex-
ceeding maximum permitted margin.Ifa
plan’s interest crediting rate is a noncom-
pliant rate that consists of an underlying
rate described in paragraph (d)(3) or
(d)(4) of this section except that the plan
applies a margin that exceeds the maxi-
mum permitted margin under paragraph
(d)(3) or (d)(4) of this section to the un-
derlying rate, then the plan must be
amended either—
(i) To reduce the margin to the maxi-
mum permitted margin for the underlying
rate used by the plan; or
(ii) To provide that the plan’s interest
crediting rate is the lesser of the plan’s
noncompliant rate and a rate described in
paragraph (d)(3) of this section (together
with any fixed minimum rate that was part
of the noncompliant rate, reduced to the
extent necessary to comply with para-
graph (d)(6)(ii) of this section).
(4)Bond-based rate with fixed mini-
mum rate applied on an annual or more
frequent basis in excess of the highest
permitted fixed minimum rate. If a plan’s
interest crediting rate is a composite rate
that consists of a variable rate described in
paragraph (d)(3) or (d)(4) of this section in
combination with a fixed minimum rate in
excess of the highest permitted fixed mini-
mum rate under paragraph (d)(6)(ii)(A)(2)
or (B)(2) of this section (as applicable), then
the plan must be amended in one of the
following manners:
(i) To reduce the fixed minimum rate to
the highest permitted fixed minimum rate
that may be used in combination with the
plan’s variable rate;
(ii) To credit interest using an annual
interest crediting rate of 6 percent; or
(iii) To provide that the plan’s interest
crediting rate is the lesser of the plan’s
noncompliant composite rate and a rate
described in paragraph (d)(3) of this sec-
tion (together with a fixed minimum rate
of 4 percent).
(5)Greatest of two or more variable
bond-based rates. If a plan’s interest cred-
iting rate is a composite rate that is the
greatest of two or more variable rates de-
scribed in paragraph (d)(3) or (d)(4) of
this section, then the plan must be
amended to provide for an interest credit-
ing rate that is the lesser of the composite
rate and a rate described in paragraph
(d)(3) of this section.
(6)Other impermissible bond-based
rates. If, after application of the rules of
paragraphs (e)(3)(vi)(C)(1) through (5)of
this section, a plan’s interest crediting rate
is a variable rate that is not an investment-
based rate of return and is not described in
paragraph (d)(3) or (d)(4) of this section,
then the plan must be amended either—
(i) To provide for an interest crediting
rate based on a variable rate described in
paragraph (d)(3) or (d)(4) of this section
that has similar duration and quality char-
acteristics as the plan’s variable rate, if
such a rate can be selected; or
Bulletin No. 2015– 48November 30, 2015
685

(ii) To provide for an interest crediting
rate that is the lesser of the plan’s variable
rate and a rate described in paragraph
(d)(3) of this section.
(7)Impermissible investment-based
rate that can be replaced with a permis-
sible rate that has similar risk and return
characteristics. If a plan’s interest credit-
ing rate is an investment-based rate of
return that is not described in paragraph
(d)(5) of this section and a permitted
investment-based rate described in para-
graph (d)(5)(ii)(A), (d)(5)(ii)(B), or
(d)(5)(iv) of this section that has similar
risk and return characteristics as the plan’s
impermissible investment-based rate can
be selected, then the plan must be
amended to provide for an interest credit-
ing rate based on such a permitted
investment-based rate.
(8)Investment-based rate with an an-
nual or more frequent minimum rate that
is either a fixed rate or a non-investment
based variable rate. If a plan’s interest
crediting rate is an investment-based rate
of return that would be described in para-
graph (d)(5) of this section except that the
plan uses an annual or more frequent min-
imum rate that is either a fixed rate or a
non-investment based variable rate in con-
junction with the investment-based rate,
then the plan must be amended either—
(i) To credit interest using that
investment-based rate of return described
in paragraph (d)(5) of this section without
the minimum rate and eliminating any re-
duction (or other adjustment) to the
investment-based rate; or
(ii) To provide that the plan’s interest
crediting rate is a rate described in para-
graph (d)(3) of this section (together with
any fixed minimum rate, reduced to the
extent necessary to comply with para-
graph (d)(6)(ii) of this section).
(9)Other impermissible investment-
based rates. If, after application of the
rules of paragraphs (e)(3)(vi)(C)(1), (7),
and (8) of this section, a plan’s interest
crediting rate is an investment-based rate
that is not described in paragraph (d)(5) of
this section, then the plan must be
amended either—
(i) To provide for an interest crediting
rate that is an investment-based rate that is
described in paragraph (d)(5) of this sec-
tion and that is otherwise similar to the
plan’s impermissible investment-based
rate but without the risk and return char-
acteristicsoftheimpermissibleinvestment-
based rate that caused it to be impermis-
sible (generally requiring the use of a rate
that is less volatile than the plan’s imper-
missible investment-based rate but is oth-
erwise similar to that rate); or
(ii) To provide that the plan’s interest
crediting rate is a rate described in para-
graph (d)(3) of this section with a fixed
minimum rate of 4 percent.
(D)Examples. The following examples
illustrate the application of the rules of
this paragraph (e)(3)(vi). Each plan has a
plan year that is the calendar year, and all
amendments are adopted on October 1,
2016, and become effective for interest
crediting periods beginning on or after
January 1, 2017. Except as otherwise pro-
vided, the interest crediting rate under the
plan satisfies the timing and other rules
related to crediting interest under para-
graph (d)(1)(iv) of this section.
Example 1. (i)Facts. A plan determines interest
credits for a plan year using the average yield on
30-year Treasury Constant Maturities for the last
week of the preceding plan year (which is an imper-
missible lookback period for this purpose pursuant to
paragraph (d)(1)(iv)(B) of this section because it is
not a month).
(ii)Conclusion. Pursuant to paragraph
(e)(3)(vi)(C)(1) of this section, the plan must be
amended in one of two manners. It may be amended
to determine interest credits for a plan year using the
average yield on 30-year Treasury Constant Matur-
ities for a lookback month that complies with the
requirements of paragraph (d)(1)(iv)(B) of this sec-
tion. Alternatively, the plan may be amended to cap
the existing rate so that it cannot exceed a third
segment rate described in paragraph (d)(3) of this
section for a period that complies with the require-
ments of paragraph (d)(1)(iv)(B) of this section.
Example 2. (i)Facts. A plan determines interest
credits for a plan year using the average yield on
30-year Treasury Constant Maturities for the last
week of the preceding plan year, plus 50 basis
points.
(ii)Conclusion. Pursuant to paragraph
(e)(3)(vi)(B)(1) of this section, the plan must be
amended to correct both the impermissible lookback
period and the excess margin. Accordingly, pursuant
to paragraph (e)(3)(vi)(C)(1) and (3) of this section,
the plan may be amended to determine interest cred-
its for a plan year using the average yield on 30-year
Treasury Constant Maturities (with no margin) for a
period that complies with the requirements of para-
graph (d)(1)(iv)(B) of this section. Alternatively, the
plan may be amended to cap the existing rate so that
it cannot exceed a third segment rate described in
paragraph (d)(3) of this section for a period that
complies with the requirements of paragraph
(d)(1)(iv)(B) of this section.
Example 3. (i)Facts. A plan credits interest for a
plan year using the rate of return on plan assets for
the preceding plan year.
(ii)Conclusion. Pursuant to paragraph
(e)(3)(vi)(C)(1) of this section, the plan must be
amended to determine interest credits for each plan
year using the rate of return on plan assets for that
plan year.
Example 4. (i)Facts. A plan credits interest
using the average yield on 30-year Treasury Con-
stant Maturities for December of the preceding plan
year with a minimum rate of 5.5 percent per year.
(ii)Conclusion. Pursuant to paragraph
(e)(3)(vi)(C)(4) of this section, the plan must be
amended to change the plan’s interest crediting rate.
The new interest crediting rate under the plan may be
the average yield on 30-year Treasury Constant Ma-
turities for December of the preceding plan year with
a minimum rate of 5 percent per year. Alternatively,
the new interest crediting rate under the plan may be
an annual interest crediting rate of 6 percent. As
another alternative, the existing noncompliant com-
posite rate may be capped so that it cannot exceed a
third segment rate described in paragraph (d)(3) of
this section, with a minimum rate of 4 percent as a
floor on the entire resulting rate.
Example 5. (i)Facts. A plan credits interest
using the greater of the unadjusted yield on 30-year
Treasury Constant Maturities and the yield on 1-year
Treasury Constant Maturities plus 100 basis points.
(ii)Conclusion. Pursuant to paragraph
(e)(3)(vi)(C)(5) of this section, the plan must be
amended to cap the existing composite “greater-of”
rate so that the composite rate cannot exceed a third
segment rate described in paragraph (d)(3) of this
section.
Example 6. (i)Facts. A plan credits interest
using a broad-based index that measures the yield to
maturity on a group of intermediate-term investment
grade corporate bonds.
(ii)Conclusion. Pursuant to paragraph
(e)(3)(vi)(C)(6) of this section, the plan must be
amended in one of two manners. The plan may be
amended to credit interest using a second segment
rate described in paragraph (d)(4)(iv) of this section.
Alternatively, the plan may be amended to cap the
existing rate so that it cannot exceed a third segment
rate described in paragraph (d)(3) of this section.
Example 7. (i)Facts. A plan credits interest
using the rate of return for a broad-based index that
measures the yield to maturity on a group of short-
term non-investment grade corporate bonds.
(ii)Conclusion. Pursuant to paragraph
(e)(3)(vi)(C)(6)(ii) of this section, the plan must be
amended to cap the existing rate so that it cannot
exceed a third segment rate described in paragraph
(d)(3) of this section.
Example 8. (i)Facts. A plan credits interest
using the rate of return for the S&P 500 index. To
bring the plan into compliance with the market rate
of return rules, the plan sponsor amends the plan to
credit interest based on the rate of return on a RIC
that is designed to track the rate of return on the S&P
500 index.
(ii)Conclusion. The amendment satisfies the rule
of paragraph (e)(3)(vi)(C)(7) of this section.
Example 9. (i)Facts. A plan credits interest
based on the rate of return on a collective trust that
November 30, 2015Bulletin No. 2015– 48
686

holds a portfolio of equity investments, which pro-
vides a rate of return that is reasonably expected to
be not significantly more volatile than the broad U.S.
equities market or a similarly broad international
equities market. To bring the plan into compliance
with the market rate of return rules, the plan sponsor
amends the plan to credit interest based on the actual
rate of return on the assets within a specified subset
of the plan’s assets that is invested in the collective
trust and that satisfies the requirements of paragraph
(d)(5)(ii)(B) of this section.
(ii)Conclusion. The amendment satisfies the rule
of paragraph (e)(3)(vi)(C)(7) of this section.
Example 10. (i)Facts. A plan credits interest for
a plan year using the rate of return on a RIC that has
most of its investments concentrated in the semicon-
ductor industry.
(ii)Conclusion. Pursuant to paragraph
(e)(3)(vi)(C)(9) of this section, the plan must be
amended in one of two manners. The plan may be
amended to provide for an interest crediting rate that
is an investment-based rate that is described in para-
graph (d)(5) of this section and that is similar to the
plan’s impermissible investment-based rate except to
the extent that the risk and return characteristics of
the impermissible investment-based rate caused it to
be impermissible. Thus, the plan may be amended to
provide for an interest crediting rate based on the
rate of return on a RIC that is invested in a broader
sector of the market than the semiconductor industry
(such as the overall technology sector of the market),
provided that the sector in which the RIC is invested
is broad enough that the volatility requirements of
paragraph (d)(5)(iv) of this section are satisfied. Al-
ternatively, the plan may be amended to provide that
the plan’s interest crediting rate is a third segment
rate described in paragraph (d)(3) of this section with
a fixed minimum rate of 4 percent.
Example 11. (i)Facts. A plan was amended in
2014 to change its interest crediting rate for all
interest crediting periods after the applicable amend-
ment date of the amendment. The amendment
changed the rate from the yield on 30-year Treasury
Constant Maturities to the rate of return on aggregate
plan assets under paragraph (d)(5)(ii)(A) of this sec-
tion. The amendment also provided for section
411(d)(6) protection with respect to the account bal-
ance as of the applicable amendment date (by pro-
viding that the account balance after the applicable
amendment date will never be smaller than the ac-
count balance as of the applicable amendment date
credited with interest using the yield on 30-year
Treasury Constant Maturities).
(ii)Conclusions.(A)Participants benefiting un-
der the plan. With respect to those participants who
were benefiting under the plan as of the applicable
amendment date of the amendment described in
paragraph (i) of thisExample 11, the requirements of
paragraph (e)(3)(iii) of this section (which provides a
special market rate of return rule to permit certain
changes in rates for participants benefiting under the
plan) are satisfied. Accordingly, no amendment is
required under this paragraph (e)(3)(vi) with respect
to those participants.
(B)Participants not benefiting under the plan.
With respect to those participants who were not
benefiting under the plan as of the applicable amend-
ment date of the amendment described in paragraph
(i) of thisExample 11, the requirements of paragraph
(e)(3)(iii) of this section are not satisfied and, ac-
cordingly, the “greater-of” rate resulting from the
section 411(d)(6) protection does not satisfy the re-
quirements of paragraph (d)(6) of this section. As a
result, pursuant to paragraph (e)(3)(vi)(B)(5) of this
section, it must be determined on a participant-by-
participant basis which account balance provides the
benefit that is greater as of the applicable amendment
date for the amendment made pursuant to this para-
graph (e)(3)(iv) (the transitional amendment). If, as
of the applicable amendment date for the transitional
amendment, the account balance credited with inter-
est after the change in rates using the yield on
30-year Treasury Constant Maturities is greater, then
the plan must be amended to provide that the partic-
ipant’s benefit is based solely on that account bal-
ance credited with interest using the yield on 30-year
Treasury Constant Maturities. On the other hand, if,
as of the applicable amendment date for the transi-
tional amendment, the account balance using the rate
of return on aggregate plan assets is greater, then the
plan must be amended to provide that the partici-
pant’s benefit is based solely on that account balance
credited with interest at the rate of return on aggre-
gate plan assets.
(vii)Plan termination amendments.A
plan amendment with an applicable
amendment date on or before the first day
of the first plan year described in para-
graph (f)(2)(i)(B)(1)or(3) of this section
(as applicable) is not treated as reducing
accrued benefits in violation of section
411(d)(6) merely because the amendment
changes the rules that apply upon plan
termination in order to satisfy the require-
ments of paragraph (e)(2) of this section.
*****
(f)***
(2)***
(i)***
(B)Special effective date—(1)In gen-
eral. Except as otherwise provided in this
paragraph (f)(2)(i)(B), paragraphs (d)(1)(iii),
(d)(1)(iv)(D) and (E), (d)(1)(vi), (d)(2)(ii),
(d)(4)(v), (d)(5)(ii)(B), (d)(5)(iv), (d)(6), (e)(2),
(e)(3)(iii), (iv) and (v), and (e)(4) of this sec-
tion apply to plan years that begin on or after
January 1, 2017 (or an earlier date as elected
by the taxpayer).
(2)Transitional amendments. Para-
graphs (e)(3)(vi) and (vii) of this section
apply to plan amendments made on or
after September 18, 2014 (or an earlier
date as elected by the taxpayer).
(3)Collectively bargained plans.Inthe
case of a plan maintained pursuant to one
or more collective bargaining agreements
between employee representatives and
one or more employers ratified on or be-
fore November 13, 2015,that constitutes a
collectively bargained plan under the rules
of § 1.436–1(a)(5)(ii)(B), the paragraphs
referenced in paragraph (f)(2)(i)(B)(1)of
this section apply to plan years that begin
on or after the later of—
(i) January 1, 2017; and
(ii) The earlier of January 1, 2019; and
the date on which the last of those collec-
tive bargaining agreements terminates
(determined without regard to any exten-
sion thereof on or after November 13,
2015).
*****
John Dalrymple
Deputy Commissioner for
Services and Enforcement.
Approved: November 3, 2015.
Mark J. Mazur
Assistant Secretary of the
Treasury (Tax Policy).
(Filed by the Office of the Federal Register on November
13, 2015, 8:45 a.m., and published on the issue of the federal
Register for November 16, 2015, 80 F.R. 70680)
Section 1274A.—Special
Rules for Certain
Transactions Where Stated
Principal Amount Does Not
Exceed $2,800,000
26 CFR 1.1274A–1: Special rules for certain trans-
actions where stated principal amount does not ex-
ceed $2,800,000.
(Also §§ 483, 1274.)
Rev. Rul. 2015–24
This revenue ruling provides the dollar
amounts, increased by the 2016 inflation
adjustment, for § 1274A of the Internal
Revenue Code.
BACKGROUND
In general, §§ 483 and 1274 determine
the principal amount of a debt instrument
given in consideration for the sale or ex-
change of nonpublicly traded property. In
addition, any interest on a debt instrument
subject to § 1274 is taken into account
under the original issue discount provisions
of the Code. Section 1274A, however,
Bulletin No. 2015– 48November 30, 2015
687

modifies the rules under §§ 483 and 1274
for certain types of debt instruments.
In the case of a “qualified debt instru-
ment,” the discount rate used for purposes
of §§ 483 and 1274 may not exceed nine
percent, compounded semiannually. Sec-
tion 1274A(b) defines a qualified debt in-
strument as any debt instrument given in
consideration for the sale or exchange of
property (other than new § 38 property
within the meaning of § 48(b), as in effect
on the day before the date of enactment of
the Revenue Reconciliation Act of 1990)
if the stated principal amount of the in-
strument does not exceed the amount
specified in § 1274A(b). For debt instru-
ments arising out of sales or exchanges
before January 1, 1990, this amount is
$2,800,000.
In the case of a “cash method debt
instrument,” as defined in § 1274A(c), the
borrower and lender may elect to use the
cash receipts and disbursements method
of accounting. In particular, for any cash
method debt instrument, § 1274 does not
apply, and interest on the instrument is
accounted for by both the borrower and
the lender under the cash receipts and
disbursements method of accounting. A
cash method debt instrument is a qualified
debt instrument that meets the following
additional requirements: (A) in the case of
a debt instrument arising out of a sale or
exchange before January 1, 1990, the
stated principal amount does not exceed
$2,000,000; (B) the lender does not use an
accrual method of accounting and is not a
dealer with respect to the property sold or
exchanged; (C) § 1274 would have ap-
plied to the debt instrument but for an
election under § 1274A(c); and (D) an
election under § 1274A(c) is jointly made
with respect to the debt instrument by the
borrower and the lender. Section 1.1274A–
1(c)(1) of the Income Tax Regulations pro-
vides rules concerning the time for, and
manner of, making this election.
Section 1274A(d)(2) provides that, for
any debt instrument arising out of a sale or
exchange during any calendar year after
1989, the dollar amounts stated in
§ 1274A(b) and § 1274A(c)(2)(A) are in-
creased by the inflation adjustment for the
calendar year. Any increase due to the in-
flation adjustment is rounded to the nearest
multiple of $100 (or, if the increase is a
multiple of $50 and not of $100, the in-
crease is increased to the nearest multiple of
$100). The inflation adjustment for any cal-
endar year is the percentage (if any) by
which the CPI for the preceding calendar
year exceeds the CPI for calendar year
1988. Section 1274A(d)(2)(B) defines the
CPI for any calendar year as the average of
the Consumer Price Index as of the close of
the 12-month period ending on September
30 of that calendar year.
INFLATION-ADJUSTED AMOUNTS
UNDER § 1274A
For debt instruments arising out of
sales or exchanges after December 31,
1989, the inflation-adjusted amounts un-
der § 1274A are shown in Table 1.
Rev. Rul. 2015–24 TABLE 1
Inflation-Adjusted Amounts Under Section 1274A
Calendar Year
of Sale
or Exchange
1274A(b) Amount
(qualified debt
instrument)
1274A(c)(2)(A) Amount
(cash method debt
instrument)
1990$2,933,200$2,095,100
1991$3,079,600$2,199,700
1992$3,234,900$2,310,600
1993$3,332,400$2,380,300
1994$3,433,500$2,452,500
1995$3,523,600$2,516,900
1996$3,622,500$2,587,500
1997$3,723,800$2,659,900
1998$3,823,100$2,730,800
1999$3,885,500$2,775,400
2000$3,960,100$2,828,700
2001$4,085,900$2,918,500
2002$4,217,500$3,012,500
2003$4,280,800$3,057,700
2004$4,381,300$3,129,500
2005$4,483,000$3,202,100
2006$4,630,300$3,307,400
2007$4,800,800$3,429,100
2008$4,913,400$3,509,600
2009$5,131,700$3,665,500
2010$5,115,100$3,653,600
November 30, 2015Bulletin No. 2015– 48
688

Rev. Rul. 2015–24 TABLE 1
Inflation-Adjusted Amounts Under Section 1274A
Calendar Year
of Sale
or Exchange
1274A(b) Amount
(qualified debt
instrument)
1274A(c)(2)(A) Amount
(cash method debt
instrument)
2011$5,201,300$3,715,200
2012$5,339,300$3,813,800
2013$5,468,200$3,905,900
2014$5,557,200$3,969,500
2015$5,647,300$4,033,800
2016$5,664,800$4,046,300
Note:These inflation adjustments were computed using the All-Urban, Consumer Price Index, 1982–1984 base, published
by the Bureau of Labor Statistics.
EFFECT ON OTHER DOCUMENTS
Rev. Rul. 2014–30, 2014–49 I.R.B.
910, is supplemented and superseded.
DRAFTING INFORMATION
The author of this revenue ruling is Kate
Sleeth of the Office of Associate Chief
Counsel (Financial Institutions & Products).
For further information regarding this reve-
nue ruling, contact Kate Sleeth at (202) 317-
7053 (not a toll-free number).
Section 483.—Interest on
Certain Deferred
Payments.
This ruling provides the dollar amounts, in-
creased by the 2016 inflation adjustment, for section
1274A of the Code. Rev. Rul. 2014–30 supple-
mented and superseded. See Rev. Rul. 2015–24,
page 687.
Section 1274.—
Determination of Issue
Price in the Case of
Certain Debt Instruments
Issued for Property.
This ruling provides the dollar amounts, in-
creased by the 2016 inflation adjustment, for section
1274A of the Code. Rev. Rul. 2014–30 supple-
mented and superseded. See Rev. Rul. 2015–24,
page 687.
Bulletin No. 2015– 48November 30, 2015
689

Part III. Administrative, Procedural, and Miscellaneous
Qualified Student Loan
Bonds
Notice 2015–78
SECTION 1. PURPOSE
This notice provides guidance regard-
ing qualified student loan bonds under
§ 144(b) of the Internal Revenue Code
(Code) to clarify certain requirements for
tax-exempt bond financing for loan pro-
grams of general application approved by
a State under § 144(b)(1)(B) (State Sup-
plemental Loan programs). (Except as
otherwise expressly provided, section ref-
erences in this notice are to the Code.)
This notice addresses: (1) eligibility of
borrowers of loans through State Supple-
mental Loan programs; (2) the application
of the requirement under § 144(b)(3) that
the student have a nexus to the State (stu-
dent nexus requirement) for loans made to
refinance student loans (refinancing
loans); (3) the loan size limitation for
State Supplemental Loans; and (4) the
types of student loans that may be refi-
nanced with a State Supplemental Loan.
SECTION 2. BACKGROUND
Section 144(b)(1) defines a “qualified
student loan bond” for which tax-exempt
private activity bonds may be issued to
mean any bond issued as part of an issue
the applicable percentage of the proceeds
of which are to be used directly or indi-
rectly to make or finance student loans
(that is, loans to pay the costs of postsec-
ondary education) under two types of loan
programs.
The first type of loan program, de-
scribed in § 144(b)(1)(A), is the Federal
Family Education Loan Program under
the Higher Education Act of 1965, Pub. L.
No. 89–329, 79 Stat 1219 (Higher Edu-
cation Act), under which education loans
are indirectly Federally guaranteed
(FFELP loans). The FFELP loans that are
eligible for tax-exempt bond financing un-
der § 144(b)(1)(A) include, among other
types of loans, loans made to parents of
undergraduate students under the program
known as the “PLUS” loan program. H.R.
Conf. Rep. No. 99–841, at II–712 (1986);
Sen. Rep. No. 99–313, at 842 (1986). The
FFELP guarantee authority extends only
to loans originated before July 1, 2010,
and was discontinued for loans originated
on or after that date. Health Care and
Education Reconciliation Act of 2010,
Pub. L. No. 111–152, § 2201, 124 Stat
1029, 1074 (2010).
The second type of loan program, de-
scribed in § 144(b)(1)(B), is for State Sup-
plemental Loans. Section 144(b)(1)(B)
describes a State Supplemental Loan pro-
gram as a program of general application
approved by the State if no loan under
such program exceeds the difference be-
tween (1) the total cost of attendance and
(2) subject to certain stated exceptions, the
other forms of student assistance for
which the student borrower may be eligi-
ble. A program shall not be treated as
described in § 144(b)(1)(B) if such pro-
gram is described in § 144(b)(1)(A).
The student nexus requirement applies
to both FFELP loans and State Supple-
mental Loans financed with proceeds of
qualified student loan bonds. Section
144(b)(3) provides that a student loan
shall be treated as being made or financed
under a program described in § 144(b)(1)
with respect to an issue only if the student
is (1) a resident of the State from which
the volume cap under § 146 for such loan
was derived, or (2) enrolled at an educa-
tional institution located in such State.
Several questions have arisen concern-
ing loans made by State Supplemental
Loan programs that are eligible to be fi-
nanced with the proceeds of qualified stu-
dent loan bonds. Specifically, questions
have arisen regarding (1) the eligibility of
parents to borrow for their child’s educa-
tion; (2) how the student nexus require-
ment applies in the context of refinancing
loans; (3) the loan size limitation; and (4)
the types of student loans that may be
refinanced with a State Supplemental Loan.
SECTION 3. SCOPE AND
APPLICATION
Section 3.1.Eligible Borrowers. For
purposes of § 144(b)(1)(B), an eligible
borrower of an original loan under a State
Supplemental Loan program is a student
(with or without a co-obligor or guaran-
tor) or a parent (with or without a co-
obligor or guarantor) borrowing for the
benefit of a child who is a student. An
eligible borrower of a refinancing loan
under § 144(b)(1)(B) is the student or
parent borrower of the original loan.
Section 3.2.The Student Nexus Re-
quirement. The student nexus requirement
applies to the student beneficiary of the
loan, even if the borrower is the parent of
the student beneficiary. An original loan
meets the student nexus requirement if, at
the time the original loan is originated, the
student beneficiary is a resident of the
State from which the volume cap for the
qualified student loan bonds that finance
the original loan is derived or is enrolled
at an educational institution located in that
State. A refinancing loan meets the stu-
dent nexus requirement if: (1) at the time
the original loan was originated, the stu-
dent beneficiary was a resident of the
State from which the volume cap for the
qualified student loan bonds that finance
the refinancing loan is derived or was en-
rolled at an educational institution located
in that State; or (2) at the time the refi-
nancing loan is originated, the student
beneficiary of the original loan resides in
the State from which the volume cap for
the qualified student loan bonds that fi-
nance the refinancing loan is derived or is
a student enrolled in an educational insti-
tution located in that State. In the case of
refunding bonds for which no volume cap
is required under § 146, the student nexus
requirement is applied with respect to the
State from which the volume cap on the
refunded bonds (or in a series of refund-
ings, the original bonds) was derived.
Section 3.3.The Loan Size Limitation.
Under § 144(b)(1)(B), the amount of a
State Supplemental Loan may not exceed
the difference between the total cost of
attendance and other forms of student as-
sistance for which the student may be
eligible. For this purpose, for an original
loan, an issuer may rely on a certification
of the student’s total cost of attendance
and other student assistance by the insti-
tution of higher education at which the
student is enrolled. Further, for this pur-
pose, certifying institutions may use the
definition of “total cost of attendance” un-
der § 472 of the Higher Education Act, 20
U.S.C. § 1087ll, and the definition of
November 30, 2015Bulletin No. 2015– 48
690

“estimated financial assistance” under
§ 428(a)(2)(C)(ii) of the Higher Education
Act, 20 U.S.C. § 1078(a)(2)(C)(ii), re-
spectively. For a refinancing loan, (1) the
original loan must have met the loan size
limitation under § 144(b)(1)(B) and (2)
the stated principal amount of the refi-
nancing loan may not exceed the sum of
the refinanced loan’s outstanding stated
principal amount and any accrued but un-
paid stated interest as of the date of the
refinancing.
Section 3.4.Types of Loans Eligible
for Refinancing. Under § 144(b)(1)(B), a
State Supplemental Loan may refinance
an original loan that was a State Supple-
mental Loan or another type of original
loan, for example, a FFELP loan or a
student loan made by a private lender,
provided that the refinancing loan meets
all of the requirements for a State Supple-
mental Loan.
SECTION 4. APPLICABILITY DATE
This notice applies to loans originated
on or after February 11, 2016. Issuers may
apply this notice to loans originated be-
fore February 11, 2016.
SECTION 5. DRAFTING
INFORMATION
The principal author of this notice is
Johanna Som de Cerff of the Office of
Associate Chief Counsel (Financial Insti-
tutions & Products). For further informa-
tion regarding this notice, contact Johanna
Som de Cerff or David White at (202)
317-6980 (not a toll-free number).
Update for Weighted
Average Interest Rates,
Yield Curves, and Segment
Rates
Notice 2015– 80
This notice provides guidance on the
corporate bond monthly yield curve, the
corresponding spot segment rates used un-
der § 417(e)(3), and the 24-month average
segment rates under § 430(h)(2) of the
Internal Revenue Code. In addition, this
notice provides guidance as to the interest
rate on 30-year Treasury securities under
§ 417(e)(3)(A)(ii)(II) as in effect for plan
years beginning before 2008 and the 30-
year Treasury weighted average rate un-
der § 431(c)(6)(E)(ii)(I).
YIELD CURVE AND SEGMENT
RATES
Generally, except for certain plans un-
der sections 104 and 105 of the Pension
Protection Act of 2006 and CSEC plans
under § 414(y), § 430 of the Code speci-
fies the minimum funding requirements
that apply to single-employer plans pursu-
ant to § 412. Section 430(h)(2) specifies
the interest rates that must be used to
determine a plan’s target normal cost and
funding target. Under this provision, pres-
ent value is generally determined using
three 24-month average interest rates
(“segment rates”), each of which applies
to cash flows during specified periods. To
the extent provided under § 430(h)(2)(C)(iv),
these segment rates are adjusted by the
applicable percentage of the 25-year aver-
age segment rates for the period ending
September 30 of the year preceding the
calendar year in which the plan year be-
gins.
1
However, an election may be made
under § 430(h)(2)(D)(ii) to use the
monthly yield curve in place of the seg-
ment rates.
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 seg-
ment rates used to compute the target nor-
mal cost and the funding target. Consis-
tent with the methodology specified in
Notice 2007–81, the monthly corporate
bond yield curve derived from October
2015 data is in Table I at the end of this
notice. The spot first, second, and third
segment rates for the month of October
2015 are, respectively, 1.61, 4.02, and
5.03.
The 24-month average segment rates
determined under § 430(h)(2)(C)(i)
through (iii) must be adjusted pursuant to
§ 430(h)(2)(C)(iv) to be within the appli-
cable minimum and maximum percent-
ages of the corresponding 25-year average
segment rates. For plan years beginning
before 2018, the applicable minimum per-
centage is 90% and the applicable maxi-
mum percentage is 110%. The 25-year
average segment rates for plan years be-
ginning in 2014, 2015, and 2016 were
published in Notice 2013–58, 2013–40
I.R.B. 294, Notice 2014–50, 2014–40
I.R.B. 590, and Notice 2015–61, 2015–39
I.R.B. 408, respectively.
24-MONTH AVERAGE CORPORATE
BOND SEGMENT RATES
The three 24-month average corporate
bond segment rates applicable for Novem-
ber 2015 without adjustment for the 25-
year average segment rate limits are as
follows:
Applicable
Month
First
Segment
Second
Segment
Third
Segment
November 20151.363.995.02
Based on § 430(h)(2)(C)(iv), the 24-
month averages applicable for October
2015 adjusted to be within the applicable
minimum and maximum percentages of
the corresponding 25-year average seg-
ment rates, are as follows:
1
Pursuant to § 433(h)(3)(A), the 3
rd
segment rate determined under § 430(h)(2)(C) is used to determine the current liability of a CSEC plan (which is used to calculate the minimum amount
of the full funding limitation under § 433(c)(7)(C)).
Bulletin No. 2015– 48November 30, 2015
691

For Plan
Years
Beginning
In
Adjusted 24-Month Average
Segment Rates
Applicable
Month
First
Segment
Second
Segment
Third
Segment
2014November20154.996.326.99
2015November20154.726.116.81
2016November20154.435.916.65
30-YEAR TREASURY SECURITIES
INTEREST RATES
Generally for plan years beginning after
2007, § 431 specifies the minimum funding
requirements that apply to multiemployer
plans pursuant to § 412. Section 431(c)(6)(B)
specifies a minimum amount for the full-
funding limitation described in § 431(c)(6)(A),
based on the plan’s current liability. Sec-
tion 431(c)(6)(E)(ii)(I) provides that the
interest rate used to calculate current lia-
bility for this purpose must be no more
than 5 percent above and no more than 10
percent below the weighted average of the
rates of interest on 30-year Treasury se-
curities during the four-year period ending
on the last day before the beginning of the
plan year. Notice 88–73, 1988–2 C.B.
383, provides guidelines for determining
the weighted average interest rate. The
rate of interest on 30-year Treasury secu-
rities for October 2015 is 2.89 percent.
The Service determined this rate as the
average of the daily determinations of
yield on the 30-year Treasury bond ma-
turing in August 2045. For plan years
beginning in the month shown below, the
weighted average of the rates of interest
on 30-year Treasury securities and the
permissible range of rate used to calculate
current liability are as follows:
For Plan Years
Beginning in
30-Year
Treasury
Weighted
Average
Permissible Range
MonthYear90%to105%
November20153.132.823.29
MINIMUM PRESENT VALUE
SEGMENT RATES
In general, the applicable interest rates
under § 417(e)(3)(D) are segment rates
computed without regard to a 24-month
average. Notice 2007–81 provides guide-
lines for determining the minimum pres-
ent value segment rates. Pursuant to that
notice, the minimum present value seg-
ment rates determined for October 2015
are as follows:
First
Segment
Second
Segment
Third
Segment
1.614.025.03
DRAFTING INFORMATION
The principal author of this notice is
Tom Morgan of the Office of the Associ-
ate Chief Counsel (Tax Exempt and Gov-
ernment Entities). However, other person-
nel from the IRS participated in the
development of this guidance. For further
information regarding this notice, contact
Mr. Morgan at 202-317-6700 or Tony
Montanaro at 202-317-8698 (not toll-free
numbers).
November 30, 2015Bulletin No. 2015– 48
692

Table I
Monthly Yield Curve for October 2015
Derived from October 2015 Data
MaturityYieldMaturityYieldMaturityYieldMaturityYieldMaturityYield
0.50.5020.54.7540.55.0760.55.1880.55.24
1.00.8521.04.7741.05.0761.05.1881.05.24
1.51.1621.54.7841.55.0861.55.1981.55.24
2.01.4322.04.7942.05.0862.05.1982.05.24
2.51.6422.54.8142.55.0862.55.1982.55.24
3.01.8123.04.8243.05.0963.05.1983.05.24
3.51.9623.54.8343.55.0963.55.1983.55.24
4.02.1124.04.8444.05.1064.05.1984.05.25
4.52.2524.54.8544.55.1064.55.2084.55.25
5.02.4025.04.8645.05.1065.05.2085.05.25
5.52.5525.54.8745.55.1165.55.2085.55.25
6.02.7026.04.8846.05.1166.05.2086.05.25
6.52.8526.54.8946.55.1166.55.2086.55.25
7.03.0027.04.9047.05.1267.05.2087.05.25
7.53.1527.54.9147.55.1267.55.2187.55.25
8.03.2928.04.9248.05.1268.05.2188.05.25
8.53.4328.54.9248.55.1368.55.2188.55.25
9.03.5529.04.9349.05.1369.05.2189.05.26
9.53.6729.54.9449.55.1369.55.2189.55.26
10.03.7930.04.9550.05.1370.05.2190.05.26
10.53.8930.54.9650.55.1470.55.2190.55.26
11.03.9931.04.9651.05.1471.05.2291.05.26
11.54.0731.54.9751.55.1471.55.2291.55.26
12.04.1532.04.9852.05.1472.05.2292.05.26
12.54.2232.54.9852.55.1572.55.2292.55.26
13.04.2933.04.9953.05.1573.05.2293.05.26
13.54.3533.55.0053.55.1573.55.2293.55.26
14.04.4034.05.0054.05.1574.05.2294.05.26
14.54.4534.55.0154.55.1674.55.2294.55.26
15.04.4935.05.0155.05.1675.05.2395.05.27
15.54.5335.55.0255.55.1675.55.2395.55.27
16.04.5636.05.0356.05.1676.05.2396.05.27
16.54.5936.55.0356.55.1776.55.2396.55.27
17.04.6237.05.0457.05.1777.05.2397.05.27
17.54.6437.55.0457.55.1777.55.2397.55.27
18.04.6638.05.0558.05.1778.05.2398.05.27
18.54.6838.55.0558.55.1778.55.2398.55.27
19.04.7039.05.0659.05.1879.05.2499.05.27
19.54.7239.55.0659.55.1879.55.2499.55.27
20.04.7440.05.0660.05.1880.05.24100.05.27
Bulletin No. 2015– 48November 30, 2015
693

Part IV. Items of General Interest
Section 7428(c) Validation
of Certain Contributions
Made During Pendency of
Declaratory Judgment
Proceedings
Announcement 2015–27
This announcement serves notice to
potential donors that the organization
listed below has recently filed a timely
declaratory judgment suit under section
7428 of the Code, challenging revocation
of its status as an eligible donee under
section 170(c)(2).
Protection under section 7428(c) of the
Code begins on the date that the notice of
revocation is published in the Internal
Revenue Bulletin and ends on the date on
which a court first determines that an or-
ganization is not described in section
170(c)(2), as more particularly set forth in
section 7428(c)(1).
In the case of individual contributors,
the maximum amount of contributions
protected during this period is limited to
$1,000.00, with a husband and wife being
treated as one contributor. This protection
is not extended to any individual who was
responsible, in whole or in part, for the
acts or omissions of the organization that
were the basis for the revocation. This
protection also applies (but without limi-
tation as to amount) to organizations de-
scribed in section 170(c)(2) which are ex-
empt from tax under section 501(a). If the
organization ultimately prevails in its de-
claratory judgment suit, deductibility of
contributions would be subject to the nor-
mal limitations set forth under section
170.
Name of OrganizationDate Suit FiledEffective Date of RevocationLocation
Summit Foundation10/23/20159/14/2009Grand Rapids, MI
November 30, 2015Bulletin No. 2015– 48
694

Definition of Terms
Revenue rulings and revenue procedures
(hereinafter referred to as “rulings”) that
have an effect on previous rulings use the
following defined terms to describe the
effect:
Amplifieddescribes a situation where
no change is being made in a prior pub-
lished position, but the prior position is
being extended to apply to a variation of
the fact situation set forth therein. Thus, if
an earlier ruling held that a principle ap-
plied to A, and the new ruling holds that
the same principle also applies to B, the
earlier ruling is amplified. (Compare with
modified, below).
Clarifiedis used in those instances
where the language in a prior ruling is
being made clear because the language
has caused, or may cause, some confu-
sion. It is not used where a position in a
prior ruling is being changed.
Distinguisheddescribes a situation
where a ruling mentions a previously pub-
lished ruling and points out an essential
difference between them.
Modifiedis used where the substance
of a previously published position is being
changed. Thus, if a prior ruling held that a
principle applied to A but not to B, and the
new ruling holds that it applies to both A
and B, the prior ruling is modified because
it corrects a published position. (Compare
with amplified andclarified, above).
Obsoleteddescribes a previously pub-
lished ruling that is not considered deter-
minative with respect to future transac-
tions. This term is most commonly used in
a ruling that lists previously published rul-
ings that are obsoleted because of changes
in laws or regulations. A ruling may also
be obsoleted because the substance has
been included in regulations subsequently
adopted.
Revokeddescribes situations where the
position in the previously published ruling
is not correct and the correct position is
being stated in a new ruling.
Supersededdescribes a situation where
the new ruling does nothing more than
restate the substance and situation of a
previously published ruling (or rulings).
Thus, the term is used to republish under
the 1986 Code and regulations the same
position published under the 1939 Code
and regulations. The term is also used
when it is desired to republish in a single
ruling a series of situations, names, etc.,
that were previously published over a pe-
riod of time in separate rulings. If the new
ruling does more than restate the sub-
stance of a prior ruling, a combination of
terms is used. For example, modified and
supersededdescribes a situation where the
substance of a previously published ruling
is being changed in part and is continued
without change in part and it is desired to
restate the valid portion of the previously
published ruling in a new ruling that is
self contained. In this case, the previously
published ruling is first modified and then,
as modified, is superseded.
Supplementedis used in situations in
which a list, such as a list of the names of
countries, is published in a ruling and that
list is expanded by adding further names
in subsequent rulings. After the original
ruling has been supplemented several
times, a new ruling may be published that
includes the list in the original ruling and
the additions, and supersedes all prior rul-
ings in the series.
Suspendedis used in rare situations to
show that the previous published rulings
will not be applied pending some future
action such as the issuance of new or
amended regulations, the outcome of
cases in litigation, or the outcome of a
Service study.
Abbreviations
The following abbreviations in current
use and formerly used will appear in ma-
terial published in the Bulletin.
A—Individual.
Acq.—Acquiescence.
B—Individual.
BE—Beneficiary.
BK—Bank.
B.T.A.—Board of Tax Appeals.
C—Individual.
C.B.—Cumulative Bulletin.
CFR—Code of Federal Regulations.
CI—City.
COOP—Cooperative.
Ct.D.—Court Decision.
CY—County.
D—Decedent.
DC—Dummy Corporation.
DE—Donee.
Del. Order—Delegation Order.
DISC—Domestic International Sales Corporation.
DR—Donor.
E—Estate.
EE—Employee.
E.O.—Executive Order.
ER—Employer.
ERISA—Employee Retirement Income Security Act.
EX—Executor.
F—Fiduciary.
FC—Foreign Country.
FICA—Federal Insurance Contributions Act.
FISC—Foreign International Sales Company.
FPH—Foreign Personal Holding Company.
F.R.—Federal Register.
FUTA—Federal Unemployment Tax Act.
FX—Foreign corporation.
G.C.M.—Chief Counsel’s Memorandum.
GE—Grantee.
GP—General Partner.
GR—Grantor.
IC—Insurance Company.
I.R.B.—Internal Revenue Bulletin.
LE—Lessee.
LP—Limited Partner.
LR—Lessor.
M—Minor.
Nonacq.—Nonacquiescence.
O—Organization.
P—Parent Corporation.
PHC—Personal Holding Company.
PO—Possession of the U.S.
PR—Partner.
PRS—Partnership.
PTE
—Prohibited Transaction Exemption.
Pub. L.—Public Law.
REIT—Real Estate Investment Trust.
Rev. Proc.—Revenue Procedure.
Rev. Rul.—Revenue Ruling.
S—Subsidiary.
S.P.R.—Statement of Procedural Rules.
Stat.—Statutes at Large.
T—Target Corporation.
T.C.—Tax Court.
T.D.—Treasury Decision.
TFE—Transferee.
TFR—Transferor.
T.I.R.—Technical Information Release.
TP—Taxpayer.
TR—Trust.
TT—Trustee.
U.S.C.—United States Code.
X—Corporation.
Y—Corporation.
Z—Corporation.
Bulletin No. 2015– 48November 30, 2015
i

Numerical Finding List
1
Bulletins 2015–27 through 2015–48
Announcements:
2015-17, 2015-28 I.R.B.67
2015-18, 2015-33 I.R.B.198
2015-19, 2015-32 I.R.B.157
2015-20, 2015-38 I.R.B.355
2015-21, 2015-34 I.R.B.220
2015-22, 2015-35 I.R.B.288
2015-23, 2015-36 I.R.B.311
2015-24, 2015-36 I.R.B.313
2015-25, 2015-39 I.R.B.422
2015-26, 2015-47 I.R.B.677
2015-27, 2015-48 I.R.B.694
2015-28, 2015-46 I.R.B.673
2015-29, 2015-46 I.R.B.673
2015-30, 2015-46 I.R.B.673
Notices:
2015-43, 2015-29 I.R.B.73
2015-46, 2015-28 I.R.B.64
2015-47, 2015-30 I.R.B.76
2015-48, 2015-30 I.R.B.77
2015-49, 2015-30 I.R.B.79
2015-50, 2015-30 I.R.B.81
2015-51, 2015-31 I.R.B.133
2015-52, 2015-35 I.R.B.227
2015-53, 2015-33 I.R.B.190
2015-54, 2015-34 I.R.B.210
2015-55, 2015-34 I.R.B.217
2015-56, 2015-35 I.R.B.235
2015-57, 2015-36 I.R.B.294
2015-58, 2015-37 I.R.B.322
2015-59, 2015-40 I.R.B.459
2015-60, 2015-43 I.R.B.604
2015-61, 2015-39 I.R.B.408
2015-62, 2015-39 I.R.B.411
2015-63, 2015-40 I.R.B.461
2015-64, 2015-40 I.R.B.464
2015-65, 2015-40 I.R.B.466
2015-66, 2015-41 I.R.B.541
2015-67, 2015-41 I.R.B.546
2015-68, 2015-41 I.R.B.547
2015-69, 2015-41 I.R.B.550
2015-70, 2015-43 I.R.B.604
2015-71, 2015-43 I.R.B.606
2015-72, 2015-44 I.R.B.613
2015-73, 2015-46 I.R.B.660
2015-74, 2015-46 I.R.B.663
2015-75, 2015-46 I.R.B.668
2015-76, 2015-46 I.R.B.669
2015-77, 2015-47 I.R.B.676
2015-78, 2015-48 I.R.B.690
2015-80, 2015-48 I.R.B.691
Proposed Regulations:
REG-140379-02, 2015-45 I.R.B.653
REG-136459-09, 2015-37 I.R.B.332
REG-155164-09, 2015-41 I.R.B.560
REG-109370-10, 2015-33 I.R.B.198
REG-112997-10, 2015-39 I.R.B.422
REG-103033-11, 2015-37 I.R.B.325
REG-109813-11, 2015-37 I.R.B.330
REG-138344-13, 2015-41 I.R.B.557
REG-139483-13, 2015-40 I.R.B.475
REG-148998-13, 2015-45 I.R.B.653
REG-115452-14, 2015-32 I.R.B.158
REG-127895-14, 2015-41 I.R.B.556
REG-132075-14, 2015-35 I.R.B.288
REG-138526-14, 2015-28 I.R.B.67
REG-143800-14, 2015-37 I.R.B.347
REG-102648-15, 2015-31 I.R.B.134
REG-102837-15, 2015-27 I.R.B.43
REG-121496-15, 2015-46 I.R.B.674
REG-123640-15, 2015-37 I.R.B.350
Revenue Procedures:
2015-34, 2015-27 I.R.B.4
2015-36, 2015-27 I.R.B.20
2015-38, 2015-36 I.R.B.295
2015-39, 2015-33 I.R.B.195
2015-40, 2015-35 I.R.B.236
2015-41, 2015-35 I.R.B.263
2015-42, 2015-36 I.R.B.310
2015-43, 2015-40 I.R.B.467
2015-44, 2015-38 I.R.B.354
2015-45, 2015-39 I.R.B.412
2015-46, 2015-39 I.R.B.414
2015-47, 2015-39 I.R.B.419
2015-48, 2015-40 I.R.B.469
2015-49, 2015-41 I.R.B.555
2015-50, 2015-42 I.R.B.583
2015-51, 2015-42 I.R.B.583
2015-52, 2015-45 I.R.B.638
2015-53, 2015-44 I.R.B.615
2015-54, 2015-45 I.R.B.648
Revenue Rulings:
2015-15, 2015-27 I.R.B.1
2015-16, 2015-31 I.R.B.130
2015-17, 2015-39 I.R.B.358
2015-18, 2015-34 I.R.B.209
2015-19, 2015-36 I.R.B.291
2015-20, 2015-38 I.R.B.353
2015-21, 2015-40 I.R.B.447
2015-22, 2015-44 I.R.B.610
2015-24, 2015-48 I.R.B.687
Treasury Decisions:
9723, 2015-31 I.R.B.84
9726, 2015-31 I.R.B.98
9727, 2015-32 I.R.B.154
Treasury Decisions:—Continued
9728, 2015-33 I.R.B.169
9729, 2015-35 I.R.B.221
9730, 2015-35 I.R.B.223
9731, 2015-37 I.R.B.314
9732, 2015-39 I.R.B.371
9733, 2015-41 I.R.B.494
9734, 2015-41 I.R.B.500
9735, 2015-37 I.R.B.316
9736, 2015-39 I.R.B.402
9737, 2015-40 I.R.B.449
9738, 2015-40 I.R.B.453
9739, 2015-41 I.R.B.528
9740, 2015-42 I.R.B.573
9741, 2015-45 I.R.B.628
9742, 2015-46 I.R.B.657
9743, 2015-48 I.R.B.679
1
A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2015–01 through 2015–26 is in Internal Revenue Bulletin
2015–26, dated June 29, 2015.
November 30, 2015Bulletin No. 2015– 48
ii

Finding List of Current Actions on
Previously Published Items
1
Bulletins 2015–27 through 2015–48
Notices:
2011-55
Amplified by
Notice 2015-77, 2015-47 I.R.B.676
2013-7
Amplified by
Notice 2015-77, 2015-47 I.R.B.676
2014-4
Modified by
Notice 2015-51, 2015-31 I.R.B.133
2014-17
Superseded by
Notice 2015-67, 2015-41 I.R.B.546
Proposed Regulations:
2009-57
Obsoleted by
REG-112997-10 2015-39 I.R.B.422
2013-17
Obsoleted by
REG-148998-13 2015-45 I.R.B.653
Revenue Procedures:
1992-75
Clarified by
Rev. Proc. 2015-40, 2015-35 I.R.B.236
2003-40
Modified by
Rev. Proc. 2015-40, 2015-35 I.R.B.236
2003-78
Modified by
Rev. Proc. 2015-46, 2015-39 I.R.B.414
2006-9
Modified by
Rev. Proc. 2015-41, 2015-35 I.R.B.263
2006-9
Superseded by
Rev. Proc. 2015-41, 2015-35 I.R.B.263
2006-54
Modified by
Rev. Proc. 2015-40, 2015-35 I.R.B.236
2006-54
Superseded by
Rev. Proc. 2015-40, 2015-35 I.R.B.236
Revenue Procedures:—Continued
2008-31
Modified by
Rev. Proc. 2015-41, 2015-35 I.R.B.263
2008-31
Superseded by
Rev. Proc. 2015-41, 2015-35 I.R.B.263
2011-49
Modified by
Rev. Proc. 2015-36, 2015-27 I.R.B.20
2011-49
Superseded by
Rev. Proc. 2015-36, 2015-27 I.R.B.20
2015-14
Modified by
Rev. Proc. 2015-39, 2015-33 I.R.B.195
2015-40
Amplified by
Rev. Proc. 2015-41, 2015-35 I.R.B.263
2015-41
Amplified by
Rev. Proc. 2015-40, 2015-35 I.R.B.236
Revenue Rulings:
2014-30
Supplemented by
Rev. Rul. 2015-24, 2015-48 I.R.B.687
2014-30
Superseded by
Rev. Rul. 2015-24, 2015-48 I.R.B.687
Treasury Decisions:
58-422
Obsoleted by
T.D. 9739 2015-41 I.R.B.528
66-284
Obsoleted by
T.D. 9739 2015-41 I.R.B.528
79-250
Obsoleted by
T.D. 9739 2015-41 I.R.B.528
79-289
Obsoleted by
T.D. 9739 2015-41 I.R.B.528
96-29
Obsoleted by
T.D. 9739 2015-41 I.R.B.528
1
A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2015–01 through 2015–26 is in Internal Revenue Bulletin
2015–26, dated June 29, 2015.
Bulletin No. 2015– 48November 30, 2015
iii

INTERNAL REVENUE BULLETIN
The Introduction at the beginning of this issue describes the purpose and content of this publication. The weekly Internal Revenue
Bulletins are available atwww.irs.gov/irb/.
We Welcome Comments About the Internal Revenue Bulletin
If you have comments concerning the format or production of the Internal Revenue Bulletin or suggestions for improving it, we
would be pleased to hear from you. You can email us your suggestions or comments through the IRS Internet Home Page
(www.irs.gov) or write to the Internal Revenue Service, Publishing Division, IRB Publishing Program Desk, 1111 Constitution Ave.
NW, IR-6230 Washington, DC 20224.
Internal Revenue Service
Washington, DC 20224
Official Business
Penalty for Private Use, $300