Automatic approval for certain funding method changes for single-employer defined…

Rev. Proc. 2017–56

26 CFR § 601.201 Rulings and determination letters. TABLE OF CONTENTS SECTION 1. PURPOSE AND SCOPE .........................................................................................................................................466 SECTION 2. BACKGROUND ......................................................................................................................................................466 SECTION 3. APPROVAL FOR SPECIFIED CHANGES IN FUNDING METHOD................................................................467

.01 Approval for changes in asset valuation method ................................................................................................................467 .02 Approval for changes in valuation date...............................................................................................................................467 .03 Approval for change in treatment of benefits funded through insurance contracts...........................................................467 SECTION 4. APPROVAL FOR CHANGES IN FUNDING METHOD IN SPECIAL SITUATIONS.....................................467

.01 Approval for change in funding method for takeover plans...............................................................................................467 .02 Approval for change in funding method due to change in valuation software .................................................................468 .03 Approval for change in funding method due to change in selection of data elements.....................................................468 .04 Approval for change in funding method for fully funded terminated plans......................................................................468 SECTION 5. APPROVAL FOR CHANGES IN FUNDING METHOD IN CONNECTION WITH PLAN MERGERS ........469

.01 Approval for change in funding method in connection with de minimis merger..............................................................469 .02 Approval for change in funding method in connection with a merger of plans with same

plan year and merger date of first or last day of plan year................................................................................................469 .03 Approval for change in funding method in connection with a merger of plans with a transition

period not exceeding 12 months ..........................................................................................................................................470 SECTION 6. RESTRICTIONS ON USE OF AUTOMATIC APPROVAL UNDER THIS

REVENUE PROCEDURE.......................................................................................................................................473 SECTION 7. EFFECTIVE DATE .................................................................................................................................................474 SECTION 8. EFFECT ON OTHER DOCUMENTS ....................................................................................................................474 SECTION 9. DRAFTING INFORMATION.................................................................................................................................474

Bulletin No. 2017–44 465 October 30, 2017

further action by the IRS. For example, § 1.430(d)–1(g)(3)(iii) provides that any change in a plan’s funding method for the first plan year to which § 430 applies to determine the plan’s minimum required contribution is automatically approved by the IRS. In addition, under § 1.430(g)– 1(b)(2)(iv), if a plan ceases to be eligible for the small plan exception for a plan year because the number of participants exceeded 100 in the prior plan year, then any required change in the valuation date to the first day of the plan year is automatically approved by the IRS.

.05 Rev. Proc. 2000–40 grants automatic approval for certain changes in funding method, but does not take into account the provisions of § 430. This revenue procedure modifies Rev. Proc. 2000–40 for plans subject to the requirements of § 430. Rev. Proc. 2000–40 continues to provide automatic approval for certain changes in funding method for defined benefit plans that are not subject to the required minimum funding rules of § 430. Rev. Proc. 2017–57 provides the procedure for obtaining the IRS’s approval for a change in funding method if that change is not eligible for automatic approval.

.06 Announcement 2010–3, 2010–4 I.R.B. 333, provides for automatic approval of changes in funding method for takeover plans (plans for which there has been a change in both the plan’s enrolled actuary and the business organization providing actuarial services to the plan) and changes in pension valuation software with respect to single-employer defined benefit plans subject to § 430, provided certain conditions are satisfied. Announcement 2010–3 was effective for plan years beginning on or after January 1, 2009. Announcement 2015–3 amplified Announcement 2010–3 and provided for additional circumstances under which automatic approval for a change in funding method for takeover plans is available. Announcement 2015–3 was effective for plan years beginning on or after January 1, 2013. These two announcements provided interim automatic approval for changes in funding method prior to the issuance of the more comprehensive guidance regarding changes in funding method under § 430 set forth in this revenue procedure.