IRS written determination 201437021

Private letter rulings and published taxpayer determination letters. Native document type is retained separately; a determination letter is not labeled a private letter ruling. These taxpayer-specific releases cannot be used or cited as precedent under 26 USC 6110(k)(3); applicability and current legal force are not independently certified. Keep repeated UILC subjects attached to one actual numbered document.

Significant Index No. 412.00-00
TAX EXEMPT AND
GOVERNMENT ENTITIES
DIVISION
Re:
Dear
DEPARTMENT OF THE TREASURY
INTERNAL REVENUE SERVICE
WASHINGTON, D.C. 20224
JUN 1 2 2014
201437021
This letter is to inform you that, effective for the plan year beginning October 1,. 2011,
conditional approval has been granted for your request for a modification of our ruling
letter dated September
6, 2006, as modified by our ruling letter dated March 2, 2011
(the letters dated September
6, 2006, and March 2, 2011, shall be collectively referred
to as "Letter Ruling"). The conditions
of this approval are specifically described below.
Your authorized representative agreed to these conditions
in a letter dated
May 30, 2014. It should be noted that the mailing address has changed for filing copies
of the actuarial valuation report to this office.
Pursuant to the Letter Ruling, the Plan was conditionally granted a 7 -year extension for
amortizing the Plan's unfunded liabilities described in section 412(b)(2)(B) of the
Internal Revenue Code ("Code") and section 302(b)(2)(B) of the Employee Retirement
Income Security Act
of 1974 ("ERISA"), prior to amendment by the Pension Protection
Act
of 2006 ("PPA '06"), for the plan year beginning October 1, 2002.
Pursuant to Letter Ruling, the amortization extension under section 412(e)
of the Code
had been granted subject to the following conditions:
(1) A credit balance is maintained such that the credit balance is at least as large as
the accumulation (at the Plan's valuation rate)
of the amortized (at the Plan's
valuation rate over a period of 15 years) differences between the amortization
payments
of the extended bases (amortized at the section 6621 (b) rate) and the
amortization payments
of such bases had such bases been extended and
amortized at the Plan's valuation rate;
(2) The Plan's funded ratio, calculated by dividing the Plan's market value
of assets
by its actuarial accrued liability (computed using the unit credit method and the
Plan's assumptions as
of October 1, 2002 for plan years beginning before
October
1, 2009, and computed using the unit credit method and the Plan's

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201437021
assumptions as of October 1, 2009 for plan years beginning on and after
October
1, 2009) remain:
a. no less than 67% for each valuation date from October 1, 2002 through
October
1, 2005, inclusive;
b. no less than 70% for each valuation date from October 1, 2006 through
October
1, 2008, inclusive;
c. no less than 64% for each valuation date from October 1, 2009 through
October
1, 2010, inclusive;
d. no less than 67% for each valuation date from October 1, 2011 through
October
1, 2013, inclusive;
e. no less than 68% for each valuation date from October 1, 2014 through
October
1, 2016, inclusive;
f. no less than 70% for each valuation date from October 1, 2017 through
October
1, 2019, inclusive;
g. for each valuation date subsequent to October 1, 2019, no less than 3%
greater than the required funded ratio as of the previous valuation date,
until a funded ratio of 100%
is achieved October 1, 2029. (For example,
because the floor funded ratio as of October
1, 2019, is 70%, the funded
ratio must be at least 73% as of October
1, 2020, and 76% as of October
1,2021).
(3) For each plan year that the extension remains
in effect, starting with the plan
year beginning October
1, 2005, a copy of the actuarial valuation report for each
plan year will be provided to this office by eight and one half months
(8 %) after
the end of the plan year at the address below:
IRS-EP Classification
1
0 Metro Tech Center
625
Fulton Street
Brooklyn, NY 11201
(4) Within 30-days after any amendment
is made that is subject to section 412(c)(7)
of the Code and section 302(c)(7) of ERISA as discussed below,
or after any
action
is taken that has the effect of such an amendment, the Plan sponsor must
request a ruling approving the Plan's prospective amortization
of unfunded
liabilities and pay the applicable user fee.
The Letter Ruling stated that if any one of these conditions was not satisfied, the
approval to extend the amortization periods for amortizing the unfunded liabilities would
be retroactively null and void. However, the Service would consider modifications of
these conditions especially
in the event that unforeseen circumstances beyond the
control
of the Fund caused the actual experience of the Plan to fail the funded ratio
condition. An example of such
an unforeseen circumstance would include a market

3
2014370JI
fluctuation affecting the value of the Plan's assets. Such an unforeseen circumstance
occurred during the plan years ending September
30, 2008, and September 30, 2009,
with a general decline
in assets worldwide which was followed by a severe protracted
recession.
Granting the modification of the Letter
Ruling carries out the purposes of ERISA and
provides adequate protection for participants under the plan and their beneficiaries.
Further, failure to permit the modification will (1) result
in (A) a substantial risk to the
voluntary continuation of the plan, or (B) a substantial curtailment
of pension benefit
levels or employee compensation, and
(2) be adverse to the interests of plan
participants
in the aggregate. Accordingly, your request for a modification of the Letter
Ruling has been granted.
This
approval modifies condition (2) and condition (3) contained
in the Letter Ruling to
read as
follows. No other conditions are modified.
(2) The Plan's funded ratio, calculated by dividing the Plan's market value of assets
by its actuarial accrued liability (computed using the unit credit method and the
Plan's assumptions as of October
1, 2002 for plan years beginning before
October
1, 2009, and computed using the unit credit method and the Plan's
assumptions as
of October 1, 2009 for plan years beginning on and after
October
1, 2009) remain:
a. no less than 67% for each valuation date from October 1, 2002 through
October
1, 2005, inclusive;
b. no less than 70% for each valuation date from October 1, 2006 through
October
1, 2008, inclusive;
c. no less than 64% for each valuation date from October 1, 2009 through
October
1, 2010, inclusive;
d. no less than 65% for the October 1, 2011, valuation date;
e. no less than 67% for both the October 1, 2012 and October 1, 2013,
valuation dates;
f. no less than 68% for each valuation date from October 1, 2014 through
October
1, 2016, inclusive;
g. no less than 70% for each valuation date from October 1, 2017 through
October 1, 2019, inclusive;
a. for each valuation date subsequent to October 1, 2019, no less than 3%
greater than the required funded ratio as of the previous valuation date,
until a funded ratio of 100%
is achieved October 1, 2029. (For example,
because the floor funded ratio as of October
1, 2019, is 70%, the funded
ratio must be at
least 73%
as of October 1, 2020, and 76% as of October
1,2021).

4
201437021
(3) For each plan year that the extension remains in effect, starting with the plan
year beginning October
1, 2005, a copy of the actuarial valuation report for each
plan year will
be provided to this office by eight and one half months (8 %) after
the end of the plan year at the address below:
Internal Revenue Service
Manager, Actuarial Group 2
1111 Constitution Avenue, N.W. (NCA-629)
Washington,
DC 20224
If any one of the conditions written
in Letter Ruling, as modified by this letter, is not
satisfied, the approval to extend the amortization periods for amortizing the unfunded
liabilities would be retroactively null and void to October
1, 2002. However, the Service
will consider modifications of these conditions, especially
in the event that unforeseen
circumstances beyond the control of the Fund may cause the actual experience
of the
Plan to fail the funded ratio condition.
An example of such an unforeseen circumstance
would be market fluctuations which affect the value of the Plan's assets.
Of course, any
request for a modification
is considered another ruling request and would be subject to
an additional user fee.
Your attention is called to section 412(c)(7) of the Code and section 302(c)(7) of ERISA
which describe the consequences that would result
in the event the Plan is amended to
increase benefits, change the rate
in the accrual of benefits or to change the rate of
vesting, while the amortization extension remains in place. Please note that any
amendment that increases liabilities for a profit sharing plan or any other retirement
plans (whether qualified or unqualified) maintained by the Trustees for the
Plan and
covering participants of the Plan to which this ruling applies, would be considered an
amendment for purposes of section 412(c)(7) of the Code and section 302(c)(7)
of
ERISA. Similarly, the establishment of a new profit sharing plan or any other retirement
plan (whether qualified or unqualified) maintained by the Trustees for the
Plan and
covering participants of the
Plan to which this ruling applies, would be considered
an
amendment for purposes of section 412(c)(7) of the Code and section 302(c)(7) of
ERISA.
It should be noted that, should your amortization extension become prospectively null
and void on a future date, the following steps must be taken
in determining the funding
standard account as of the beginning of the plan year
in which it becomes prospectively
null and void (Revocation Date).
1. Effective at the Revocation Date, the balance of each extended amortization
base would be redetermined as
an amount equal to the balance that each
extended base would have had if the extension had not been granted

5
(hereinafter, the "Redetermined Prospective Revocation Balance"). For this
purpose, if as
of the Revocation Date, the base would have been fully amortized
had the extension not been granted, the Redetermined Prospective Revocation
Balance
on account of such base as of the Revocation Date shall equal $0.
2. There is a one-time charge to the funding standard account at the Revocation
Date
on account of each extended amortization base equal to the excess of (A)
over (B), where:
A.
Is the actual balance of the extended amortization bases determined as if
the amortization extension was not
null and void
on the Revocation Date.
[Note that the
balance
of each extended amortization base is determined
as the prior year's
balance brought forward with interest at the prior year's
valuation interest rate
less the prior year's extended amortization payment
brought forward with interest at the prior year's IRC
6621 (b) rate.]
B. Is the Redetermined Prospective Revocation Balance.
3. The annual amortization charge at the Revocation Date for each amortization
base that was previously extended shall be redetermined by amortizing each
Redetermined Prospective Revocation Balance over the remaining amortization
period, determined without regard to the extension previously granted under
section 412(e)
of the Code. The resulting amortization charges would be
determined using the applicable valuation interest rate at the Revocation Date.
[Note that if the Redetermined Prospective Revocation Balance
of an extended
base is $0, there is no amortization charge with respect to such base at the
Revocation Date.]
4.
At the Revocation Date, the reconciliation account shall be redetermined as if the
amortization extension had never been approved.
Your attention
is called to section 431 (b)(7)(B) of the Code which provides for an
adjustment to the funding standard account when a multiemployer plan leaves
reorganization. If a multiemployer plan
is not in reorganization in the current plan year
but was in reorganization
in the immediately preceding plan year, any balance in the
funding standard account at the
close of such immediately preceding plan year shall be
eliminated by an offsetting credit or charge (as the case may be) and shall be taken into
account in subsequent plan years by being amortized
in equal installments (until fully
amortized) over a period of 30 plan years.
This
ruling
is directed only to the taxpayer that requested it. Section 611 O(k)(3) of the
Code provides that it may not be used or cited by others as precedent.

6
201437021"'
We have sent a copy of this letter to the Manager, EP Classification in Baltimore,
Maryland, to the Manager, EP Compliance Unit
in Chicago, Illinois, and to your
authorized representatives pursuant to a power
of attorney on file in this office.
If you have any questions regarding this matter, please contact
at
cc:
Sincerely,
David
M. Ziegler, Manager
Employee Plans Actuarial Group 2