SECTION 4. APPLICATION

PROCEDURES

.01 A plan administrator, plan sponsor, or the authorized representative of either, that seeks to obtain approval for a change in funding method must make a written request for that approval that satisfies all the requirements of Rev. Proc. 2017–4 (or its successor). Attention is called to sections 6.02(10) through (14) of Rev. Proc. 2017–4 (or the corresponding portions of its successor) concerning signatures, authorized representatives (such as attorneys and enrolled actuaries), a power of attorney and declaration of representative, and a penalties of perjury statement. However, a statement of proposed deletions pursu

ant to § 6110(c) is not required to be furnished. All signatures must be accompanied by the typed name and title (if applicable) of the signer. Refer to Appendix A of this revenue procedure for a checklist of the information that must be included with the request for approval. Any information described in this revenue procedure that is unduly burdensome to furnish need not be included, but the request for approval must include a statement indicating why this material is not being furnished.

.02 The request should generally be made no later than 2½ months following the close of the plan year for which the change is to be effective. Requests made after 2½ months following the close of the plan year generally will not be considered unless the request involves a plan merger. In the case of a request for approval for a change in funding method that involves a plan merger, the request should be made no later than 4 months before the Form 5500 filing deadline for the ongoing plan for the plan year in which the merger took place.

.03 The information specified in this section 4.03 must accompany the request:

(1) The employer identification number, the plan name and number, and the name, address, and phone number of the plan administrator or plan sponsor.

(2) A statement of the plan year first affected by the proposed change.

(3) A copy of the actuarial valuation report for the plan year preceding the year of change, and, if available, a draft of the actuarial valuation report for the year of change.

(4) A copy of the most recently filed Schedule SB or Schedule MB, as applicable, of Form 5500 including attachments thereto.

(5) A description of the current funding method, the proposed funding method, and the transition between the two funding methods. For this purpose, a funding method may be described by reference to a funding method contained in Rev. Proc. 2000–40, Rev. Proc. 2017–56, or other published guidance. The description of a funding method should include sufficient details so that two independent actuaries applying the described method would arrive at the same valuation results using the same assumptions for a given plan.

If applicable, the description must indicate how the proposed method applies differently in the first year of the change than it applies in the subsequent years. For example, a proposed asset valuation method may start at market value in the year of change and phase in gains and losses in subsequent years. Additionally, if either of those asset valuation methods is not described in Rev. Proc. 2000–40 or Rev. Proc. 2017–56 (as applicable), a numerical illustration demonstrating the calculation of the actuarial value of assets under the current method and the proposed method must be included.

(6) A brief statement of the reason for the proposed change and a statement why automatic approval under Rev. Proc. 2000–40 or Rev. Proc. 2017–56 (as applicable) may not be used to make the change.

(7) A statement of whether a change in funding method was made (or whether approval for a change of funding method was requested, but the change was not made) for any of the 5 plan years preceding the year of change. If the funding method was changed, or a change was requested, in any of the 5 preceding plan years the following information must be provided:

(A) If the change in funding method was automatically approved,

(i) the plan year of the change (ii) the details of the change in funding method, and

(iii) the specific provision of the statute, regulation, revenue procedure, or other authority providing for the automatic approval.

(B) If approval for the change in funding method was requested and granted, a copy of the approval letter.

(C) If approval for the change in funding method was requested and denied, a copy of the denial letter.

(D) If approval for a change in funding method was requested and the request withdrawn, a summary of the request and the reason for the withdrawal.

(8) A statement of whether a waiver of the minimum funding standard was requested for any of the 5 plan years preceding the year of change. Also, provide a statement of whether a request for a waiver is currently pending or is expected to be submitted in the near future. If a

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method by including the information before and after the change in funding method, with both sets of information based on a consistent set of actuarial assumptions and plan provisions (which may either reflect the changes in the actuarial assumptions and plan provisions or not reflect those changes).

(B)(i) A list of the amortization bases maintained (including, for each base, the type of base, outstanding balance, amortization amount, and remaining amortization period). The calculation of the new base or bases must also be shown. If bases are combined or offset in the year of change, in addition to the resulting single base, show information for each base.

(ii) The unfunded liability of the plan. For immediate gain methods, show the actuarial value of assets prior to any adjustments (such as adjustments for credit balances or outstanding balances of amortization bases) but excluding contributions designated for the current plan year.

(iii) The basic funding formula (or equation of balance). If the equation of balance is not satisfied, explain the effect on the operation of the funding method in the year of change.

(C) The calculation of the minimum required contribution for the year of change (determined without reduction for the credit balance in the funding standard account). This information must include the accrued liability (if applicable), the fair market value of assets, the actuarial value of assets, the normal cost, and the amortization charges and credits.

(D) The calculation of the full funding limitation under § 412 (prior to amendment by the Pension Protection Act of 2006 (PPA ’06), Public Law 109–280 (120 Stat. 780 (2006)), or § 433(c)(7) (as applicable), for the year of change.

(14) Technical information for multiemployer plans:

(A) A worksheet prepared by the enrolled actuary for the plan containing the information described in sections 4.03(14) (B) through (F), determined as of the valuation date in the year of the change in funding method. That information must be shown both (i) without regard to any change in plan provisions, actuarial assumptions, or funding methods that first apply in the year of change, and (ii) taking into account the change in funding method and other

waiver was requested in any of the preceding 5 plan years, the following information must be provided:

(A) If the waiver was approved, a copy

of the letter granting the waiver. (B) If the waiver was denied, a copy of

the letter denying the waiver. (C) If the waiver request was with drawn, a summary of the request and the reason for the withdrawal. (9) A statement of whether an extension of any amortization period is currently in effect or whether an amortization extension was requested for any of the 5 plan years preceding the year of change. Also, provide a statement of whether a request for an amortization extension is currently pending or is expected to be submitted in the near future. If an amortization extension was requested in any of the preceding 5 plan years, the following information must be provided:

(A) If the amortization extension was

approved, a copy of the approval letter. (B) If the amortization extension was

denied, a copy of the denial letter. (C) If the amortization extension re quest was withdrawn, a summary of the request and the reason for the withdrawal. (10) A statement of other changes being made for the year of the proposed change that have an impact on the funding requirements, such as a plan amendment or a change in actuarial assumptions.

(11) The technical information specified in sections 4.03(12) through (14) of this revenue procedure, as applicable, depending on whether the plan is a singleemployer plan subject to § 430, a singleemployer plan not subject to § 430, or a multiemployer plan.

(12) Technical information for singleemployer plans subject to § 430:

(A) A worksheet prepared by the enrolled actuary for the plan containing the information described in sections 4.03(12)(B) through (D) of this revenue procedure, determined as of the valuation date in the year of the change in funding method. That information must be shown both (i) without regard to any change in plan provisions, actuarial assumptions, or funding methods that first apply in the year of change, and (ii) taking into account the change in fund

ing method and other changes that first apply in the year of change. In addition, if there are changes in actuarial assumptions or plan provisions, then the worksheet must separately identify the impact of the change in funding method by including the information before and after the change in funding method, with both sets of information based on a consistent set of actuarial assumptions and plan provisions (which may either reflect the changes in the actuarial assumptions and plan provisions or not reflect those changes).

(B) If there are any shortfall or waiver amortization bases, for each base:

(i) The type of base (shortfall or

waiver); (ii) The valuation date as of which the

base was established; (iii) The amortization installment; (iv) The number of years remaining in

the amortization period; and (v) The present value of any remaining installments (including the installment for the current plan year).

(C) The calculation of the § 430 minimum required contribution for the year of change (determined without regard to the use of the prefunding balance or funding standard carryover balance). This information must include the funding target, the fair market value of assets, the actuarial value of assets, target normal cost, and amortization installments.

(D) The calculation of the § 436 adjusted funding target attainment percentage (AFTAP) for the year of change.

(13) Technical information for singleemployer plans not subject to § 430:

(A) A worksheet prepared by the enrolled actuary for the plan containing the information described in sections 4.03(13) (B) through (D) of this revenue procedure, determined as of the valuation date in the year of the change in funding method. That information must be shown both (i) without regard to any change in plan provisions, actuarial assumptions, or funding methods that first apply in the year of change, and (ii) taking into account the change in funding method and other changes that first apply in the year of change. In addition, if there are changes in actuarial assumptions or plan provisions, then the worksheet must separately identify the impact of the change in funding

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requesting the approval for the change in funding method, this information may be provided using the assumption that there are no changes following the spin-off.

.06 The IRS may request additional information as needed. For example, the IRS may request detailed valuation results for test lives that illustrate the effect of the change. See section 27 of Rev. Proc. 2017–4 (or the corresponding portion of its successor) for timing to respond to a request for additional information.

.07 If a conference has been requested, a conference will be granted only in accordance with section 28 of Rev. Proc. 2017–4 (or the corresponding portion of its successor). If the IRS proposes an adverse holding, the taxpayer will be offered a conference in accordance with section 28 of Rev. Proc. 2017–4 (or the corresponding portion of its successor).

.08 If the request for the change in funding method is approved, the instructions to Schedule SB or Schedule MB, as applicable, of Form 5500 should be followed in reporting the change.