Bulletin No. 2021–44

HIGHLIGHTS

OF THIS ISSUE





Bulletin No. 2021–44

November 1, 2021

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.

EMPLOYEE PLANS

INCOME TAX

Notice 2021-57, page 706.

Rev. Rul. 2021-21, page 704.

Notice 2021-57 provides guidance to multiemployer defined

benefit pension plan sponsors and actuaries on the application of funding relief under IRC § 431 and elections under IRC

§ 432 in accordance with §§ 9701, 9702 and 9703 of the

American Rescue Plan Act of 2021, which provide relief for

losses incurred on account of the COVID-19 pandemic.

Finding Lists begin on page ii.

Federal rates; adjusted federal rates; adjusted federal longterm rate, and the long-term tax exempt rate. For purposes of

sections 382, 1274, 1288, 7872 and other sections of the

Code, tables set forth the rates for November 2021.

The IRS Mission

Provide America’s taxpayers top-quality service by helping

them understand and meet their tax responsibilities and

enforce 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

Conventions, 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 otherwise indicated. Procedures relating solely to matters of internal management are not published; however, statements of

internal 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,

identifying 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,

Legislation 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

Rulings. Bank Secrecy Act Administrative Rulings are issued

by the Department of the Treasury’s Office of the Assistant

Secretary (Enforcement).

Part IV.—Items of General Interest.

This part includes notices of proposed rulemakings, disbarment 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 1, 2021 

Bulletin No. 2021–44

Part I

Section 1274.—

Determination of Issue

Price in the Case of Certain

Debt Instruments Issued for

Property

(Also Sections 42, 280G, 382, 467, 468, 482, 483,

1288, 7520, 7872.)

Rev. Rul. 2021-21

This revenue ruling provides various prescribed rates for federal income

AFR

110% AFR

120% AFR

130% AFR

AFR

110% AFR

120% AFR

130% AFR

150% AFR

175% AFR

AFR

110% AFR

120% AFR

130% AFR

Short-term adjusted AFR

Mid-term adjusted AFR

Long-term adjusted AFR

November 1, 2021

tax purposes for November 2021 (the

current month). Table 1 contains the

short-term, mid-term, and long-term

applicable federal rates (AFR) for the

current month for purposes of section

1274(d) of the Internal Revenue Code.

Table 2 contains the short-term, midterm, and long-term adjusted applicable federal rates (adjusted AFR) for the

current month for purposes of section

1288(b). Table 3 sets forth the adjusted

federal long-term rate and the longterm tax-exempt rate described in section 382(f). Table 4 contains the appro-

priate percentages for determining the

low-income housing credit described in

section 42(b)(1) for buildings placed in

service during the current month. However, under section 42(b)(2), the applicable percentage for non-federally subsidized new buildings placed in service

after July 30, 2008, shall not be less

than 9%. Finally, Table 5 contains the

federal rate for determining the present

value of an annuity, an interest for life

or for a term of years, or a remainder or

a reversionary interest for purposes of

section 7520.

REV. RUL. 2021-21 TABLE 1

Applicable Federal Rates (AFR) for November 2021

Period for Compounding

Annual

Semiannual

Quarterly

Short-term

0.22%

0.22%

0.22%

0.24%

0.24%

0.24%

0.26%

0.26%

0.26%

0.29%

0.29%

0.29%

Mid-term

1.08%

1.08%

1.08%

1.19%

1.19%

1.19%

1.30%

1.30%

1.30%

1.40%

1.40%

1.40%

1.63%

1.62%

1.62%

1.90%

1.89%

1.89%

Long-term

1.86%

1.85%

1.85%

2.05%

2.04%

2.03%

2.23%

2.22%

2.21%

2.42%

2.41%

2.40%

Annual

0.17%

0.82%

1.40%

REV. RUL. 2021-21 TABLE 2

Adjusted AFR for November 2021

Period for Compounding

Semiannual

0.17%

0.82%

1.40%

704

Monthly

0.22%

0.24%

0.26%

0.29%

1.08%

1.19%

1.30%

1.40%

1.61%

1.88%

1.84%

2.03%

2.21%

2.40%

Quarterly

0.17%

0.82%

1.40%

Monthly

0.17%

0.82%

1.40%

Bulletin No. 2021–44

REV. RUL. 2021-21 TABLE 3

Rates Under Section 382 for November 2021

Adjusted federal long-term rate for the current month

Long-term tax-exempt rate for ownership changes during the current month (the highest of the adjusted federal

long-term rates for the current month and the prior two months.)

1.40%

1.40%

REV. RUL. 2021-21 TABLE 4

Appropriate Percentages Under Section 42(b)(1) for November 2021

Note: Under section 42(b)(2), the applicable percentage for non-federally subsidized new buildings placed in service after July

30, 2008, shall not be less than 9%.

Appropriate percentage for the 70% present value low-income housing credit

7.34%

Appropriate percentage for the 30% present value low-income housing credit

3.14%

REV. RUL. 2021-21 TABLE 5

Rate Under Section 7520 for November 2021

Applicable federal rate for determining the present value of an annuity, an interest for life or a

term of years, or a remainder or reversionary interest

Section 42.—Low-Income

Housing Credit

The applicable federal short-term, mid-term,

and long-term rates are set forth for the month of

November 2021. See Rev. Rul. 2021-21, page 704.

Section 280G.—Golden

Parachute Payments

The applicable federal short-term, mid-term,

and long-term rates are set forth for the month of

November 2021. See Rev. Rul. 2021-21, page 704.

Section 382.—Limitation

on Net Operating Loss

Carryforwards and

Certain Built-In Losses

Following Ownership

Change

The adjusted applicable federal long-term rate

is set forth for the month of November 2021. See

Rev. Rul. 2021-21, page 704.

Section 467.—Certain

Payments for the Use of

Property or Services

The applicable federal short-term, mid-term,

and long-term rates are set forth for the month of

November 2021. See Rev. Rul. 2021-21, page 704.

Section 468.—Special

Rules for Mining and Solid

Waste Reclamation and

Closing Costs

The applicable federal short-term rates are set

forth for the month of November 2021. See Rev.

Rul. 2021-21, page 704.

Section 482.—Allocation

of Income and Deductions

Among Taxpayers

The applicable federal short-term, mid-term,

and long-term rates are set forth for the month of

November 2021. See Rev. Rul. 2021-21, page 704.

1.4%

Section 483.—Interest on

Certain Deferred Payments

The applicable federal short-term, mid-term,

and long-term rates are set forth for the month of

November 2021. See Rev. Rul. 2021-21, page 704.

Section 1288.—Treatment

of Original Issue Discount

on Tax-Exempt Obligations

The adjusted applicable federal short-term, midterm, and long-term rates are set forth for the month

of November 2021. See Rev. Rul. 2021-21, page 704.

Section 7520.—Valuation

Tables

The applicable federal mid-term rates are set

forth for the month of November 2021. See Rev.

Rul. 2021-21, page 704.

Section 7872.—Treatment

of Loans With BelowMarket Interest Rates

The applicable federal short-term, mid-term,

and long-term rates are set forth for the month of

November 2021. See Rev. Rul. 2021-21, page 704.

Bulletin No. 2021–44

705

November 1, 2021

Part III

Funding relief for

multiemployer defined

benefit pension plans under

the American Rescue Plan

Act of 2021

Notice 2021-57

I. PURPOSE

This notice provides guidance for

sponsors of multiemployer defined benefit

pension plans on the elections under sections 9701 and 9702 of the American Rescue Plan Act of 2021, Pub. L. 117-2, 135

Stat. 4 (the ARP), and the relief provided

under section 9703 of the ARP, relating to

sections 431 and 432 of the Internal Revenue Code (Code). These provisions permit

plan sponsors to:

• Elect to delay designating a plan as

being in endangered, critical, or critical and declining status under section

432(b)(3), as applicable, or to delay

updating the plan’s funding improvement plan or rehabilitation plan, as

applicable;

• Elect to extend the plan’s funding

improvement period under section

432(c)(4) or the rehabilitation period

under section 432(e)(4), as applicable; and

• Spread certain investment losses and

other experience losses related to

COVID-19 over a period of up to 30

years in determining charges to the

funding standard account under section 431.

II. BACKGROUND

Section 412 of the Code sets forth minimum funding rules that generally apply

to pension plans. Section 431 of the Code

sets forth the funding rules that apply specifically to multiemployer defined benefit

plans. Section 432 of the Code sets forth

additional rules that apply to a multiemployer plan that is in endangered status or

critical status.1

A. Minimum funding standards under

section 431

Section 412(a)(2)(C) provides that a

multiemployer plan is treated as satisfying

the minimum funding standard for a plan

year if the employers make contributions

to or under the plan that, in the aggregate,

are sufficient to ensure that the plan does

not have an accumulated funding deficiency under section 431 as of the end of

that plan year. Section 431(a) provides

that the accumulated funding deficiency

of a multiemployer plan for any plan year

is the amount, determined as of the end of

that plan year, equal to the excess (if any)

of (1) the total for all plan years of the

charges to the funding standard account of

the plan under section 431(b)(2), over (2)

the credits to that account under section

431(b)(3) (including employer contributions under section 431(b)(3)(A)) for those

plan years. Pursuant to section 431(b)(2)

(B)(iii), the charges to the funding standard account include a 15-year amortization of the plan’s net experience loss for

prior plan years.

Section 431(b)(8) provides two special

funding rules available to a multiemployer

plan meeting a solvency requirement under

section 431(b)(8)(C). These rules, which

were enacted in 2010 to provide funding

relief for the investment losses incurred

in the first two plan years ending after

August 31, 2008, provide for (1) a special

amortization rule under section 431(b)(8)

(A), and (2) a special asset valuation rule

under section 431(b)(8)(B).2

Section 431(b)(8)(A)(i) applies a special amortization rule to the portion of

a multiemployer plan’s experience loss

or gain for a plan year attributable to

net investment losses, if any, incurred in

either or both of the first 2 plan years ending after August 31, 2008. This portion of

the experience loss or gain may be treated

as an item separate from other experience

losses, to be amortized in equal annual

installments (until fully amortized) over

the period beginning with the plan year

in which that portion was first recognized

in the actuarial value of assets and ending

with the last plan year in the 30-plan-year

period beginning with the plan year in

which that portion was incurred. Section

431(b)(8)(A)(ii) provides that this special

amortization period cannot be extended

under section 431(d) (which permits a

plan sponsor to obtain an extension of an

amortization period), and any extension

granted under section 431(d) prior to the

application of the special amortization

period may not result in the amortization

period exceeding 30 years. Section 431(b)

(8)(A)(iii) provides that net investment

losses are to be determined in the manner described by the Secretary on the

basis of the difference between actual and

expected returns (including any difference

attributable to any criminally fraudulent

investment arrangement that is determined under rules that are substantially

similar to the rules that apply for purposes

of section 165).

Section 431(b)(8)(B)(i) provides a special asset valuation rule permitting a multiemployer plan to change its asset valuation method in a manner that (1) spreads

the difference between expected returns

and actual returns for either or both of

the first 2 plan years ending after August

31, 2008, over a period of not more than

10 years; (2) provides that, for either or

both of the first 2 years beginning after

August 31, 2008, the value of plan assets

at any time is not permitted to be less than

80 percent or greater than 130 percent of

the fair market value of the assets at that

time; or (3) provides for both (1) and (2).

Section 431(b)(8)(B)(ii) provides that,

if the special asset valuation rule applies

for any plan year, the Secretary will not

treat the plan’s asset valuation method

as unreasonable solely because of the

Sections 304 and 305 of the Employee Retirement Income Security Act of 1974, Pub. L. 93 406, as amended (ERISA), provide rules that are parallel to the rules under §§ 431and 432 of

the Code, respectively. Pursuant to section 101 of Reorganization Plan No. 4 of 1978, 5 U.S.C. App., the Secretary of the Treasury has interpretive jurisdiction over the subject matter of this

notice for purposes of ERISA as well as the Code. Thus, this notice also applies to the provisions of §§ 304(b)(8) and 305 of ERISA.

2

See § 211(a)(2) of the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010, Pub. L. 111-192.

1

November 1, 2021

706

Bulletin No. 2021–44

changes described in the preceding sentence and the changes in funding method

will be deemed approved by the Secretary. Section 431(b)(8)(B)(iii) provides

that if the special amortization rule and

the special asset valuation rule both apply

for any plan year, the plan must treat any

reduction in the plan’s unfunded accrued

liability resulting from the application of

the special asset valuation rule in those

years as a separate experience amortization base to be amortized in equal annual

installments (until fully amortized) over a

period of 30 plan years.

The solvency test of section 431(b)(8)

(C) is met for a multiemployer plan only

if the plan’s actuary certifies that the plan

is projected to have sufficient assets to

timely pay expected benefits and anticipated expenditures over the amortization

period, taking into account the changes in

the funding standard account under section 431(b)(8).

Section 431(b)(8)(D) provides that, if

the special amortization rule or the special

asset valuation rule applies to a multiemployer plan for any plan year, then a plan

amendment increasing benefits may not go

into effect during the 2 plan years immediately following that plan year. Section

431(b)(8)(D) provides for an exception to

this rule if (1) the plan’s actuary certifies

that the increase is paid for out of additional contributions not allocated to the

plan immediately before the plan’s application of the special amortization rule or

the special asset valuation rule and that the

plan’s funded percentage and projected

credit balances for those 2 plan years are

reasonably expected to be at least as high

as they would have been if the benefit

increase had not been adopted, or (2) the

amendment is required as a condition of

qualification under the Code or to comply with other applicable law. The section

431(b)(8)(D) benefit increase restriction

applies in addition to any other applicable

restrictions on benefit increases.

Section 431(b)(8)(E) provides that the

plan sponsor is required to give notice of

application of the special rules to plan participants and beneficiaries and the Pension

Benefit Guaranty Corporation (PBGC).

Notice 2010-83, 2010-51 IRB 862,

provides guidance on the application of

section 431(b)(8). Because section 9703

of the ARP provides for the application of

a modified version of section 431(b)(8) of

the Code for the first 2 plan years ending

after February 29, 2020, section III.E of

this notice provides that a modified version of the guidance in Notice 2010-83

applies for purposes of section 9703 of the

ARP.

B. Additional rules under section 432

for multiemployer plans in endangered

or critical status

Section 432(a) provides that certain

requirements apply to a multiemployer

defined benefit plan that was in effect on

July 16, 2006, if, as determined under section 432(b), the plan is in endangered status, critical status, or critical and declining

status (section 432 status). Section 432

does not apply to a multiemployer plan for

periods after the plan year of termination

within the meaning of section 4041A(a)

(2) of ERISA.3

1. Section 432 status

Section 432(b)(1) provides that, other

than in the case of a plan described in

section 432(b)(5), a plan is in endangered status for a plan year if the plan

is not in critical status for the plan year

and, as of the beginning of the plan year,

the plan’s actuary determines that either

(1) the plan’s funded percentage for such

plan year is less than 80 percent, or (2)

the plan has an accumulated funding

deficiency for the plan year, or is projected to have an accumulated funding

deficiency for any of the 6 succeeding plan years, taking into account any

extension of amortization periods under

section 431(d). If a plan meets both conditions (1) and (2) described in the preceding sentence, then the plan is in seriously endangered status.

Section 432(b)(2) provides that a plan

is in critical status for a plan year if the

plan’s actuary determines the plan is

described in one or more of the following

categories as of the beginning of the plan

year:

i. The plan’s funded percentage is less

than 65 percent, and the sum of the

fair market value of plan assets, plus

the present value of the reasonably

anticipated employer contributions

for the current plan year and each of

the 6 succeeding plan years (assuming that the terms of all collective

bargaining agreements pursuant to

which the plan is maintained for the

current plan year continue in effect

for succeeding plan years) is less than

the present value of all nonforfeitable

benefits projected to be payable under

the plan during the current plan year

and each of the 6 succeeding plan

years (plus administrative expenses

for such plan years).

ii. The plan has an accumulated funding

deficiency for the current plan year, or

is projected to have an accumulated

funding deficiency for any of the 3

succeeding plan years (4 succeeding

plan years if the funded percentage

of the plan is 65 percent or less). For

purposes of the prior sentence, any

extension of amortization periods

under section 431(d) is not taken into

account.

iii. The plan meets the following three

factors: (1) the plan’s normal cost

for the current plan year, plus interest (determined at the rate used for

determining costs under the plan) for

the current plan year on the amount

of unfunded benefit liabilities under

the plan as of the last date of the preceding plan year, exceeds the present

value of the reasonably anticipated

employer and employee contributions

for the current plan year; (2) the present value, as of the beginning of the

current plan year, of nonforfeitable

benefits of inactive participants is

greater than the present value of nonforfeitable benefits of active participants; and (3) the plan has an accumulated funding deficiency for the

current plan year, or is projected to

have such a deficiency for any of the

4 succeeding plan years, not taking

See § 301(c) of ERISA, which provides that part 3 of title I of ERISA, including the minimum funding rules parallel to sections 412, 431, and 432 of the Code, applies until the last day of

the plan year in which the plan terminates within the meaning of section 4041A(a)(2) of ERISA. The Secretary of the Treasury has interpretive jurisdiction over the minimum funding rules

in Part 3 of title I of ERISA pursuant to section 101 of Reorganization Plan No. 4 of 1978.

3

Bulletin No. 2021–44

707

November 1, 2021

into account any extension of amortization periods under section 431(d).

iv. The sum of the fair market value of

plan assets of the plan plus the present value of the reasonably anticipated employer contributions for the

current plan year and each of the 4

succeeding plan years (assuming that

the terms of all collective bargaining agreements pursuant to which

the plan is maintained for the current

plan year continue in effect for succeeding plan years) is less than the

present value of all benefits projected

to be payable under the plan during

the current plan year and each of the 4

succeeding plan years (plus administrative expenses for such plan years).

Section 432(b)(6) provides that a plan

is in critical and declining status if the

plan meets one or more of the definitions of critical status as described in section 432(b)(2) and the plan is projected to

become insolvent within the meaning of

section 418E during the current plan year

or any of the 14 succeeding plan years (19

succeeding plan years if the plan has a

ratio of inactive participants to active participants that exceeds 2:1 or if the funded

percentage of the plan is less than 80 percent).

2. Special rules relating to section 432

status

Section 432(b)(4) provides that the

plan sponsor of a multiemployer plan

that has not been certified to be in critical

status for a plan year but that is projected

by the plan’s actuary to be in critical status in any of the succeeding 5 plan years

may, not later than 30 days after the date

of the certification of status for the plan

year, elect to be in critical status effective

beginning with the plan year in which the

election is made. For this purpose, the projection must take into account the rules of

section 432(b)(3)(B)(iv). Under section

432(b)(4), a plan that is in critical status

as a result of a sponsor election remains

in critical status until the plan emerges

from critical status in accordance with

section 432(e)(4)(B).

Section 432(b)(5) describes a plan that

would be in endangered status for a plan

year but for which the plan’s actuary certifies that: (1) the plan is projected to not

November 1, 2021

be in endangered status as of the end of the

tenth plan year ending after the plan year

to which the certification relates; and (2)

the plan was not in critical status or endangered status in the immediately preceding

plan year.

Section 432(b)(7), as added by section

9704 of the ARP, provides that a multiemployer plan receiving special financial

assistance under section 4262 of ERISA,

is deemed to be in critical status for plan

years beginning with the plan year in

which the effective date for such assistance occurs and ending with the last plan

year ending in 2051.

Section 432(e)(4)(B)(i) of the Code

provides, as a general rule, that a multiemployer plan in critical status remains in

critical status until a plan year for which

the plan actuary certifies that: (1) the plan

is not described in section 432(b)(2)(A),

(B), (C), or (D) for the plan year; (2) the

plan is not projected to have an accumulated funding deficiency for that plan year

or any of the 9 succeeding plan years; and

(3) the plan is not projected to become

insolvent within the meaning of section

418E for any of the 30 succeeding plan

years. Section 432(e)(4)(B)(ii) provides a

special emergence rule for a plan with an

automatic amortization extension under

section 431(d)(1). The emergence rules

described in section 432(e)(4)(B) also

apply to a plan that is in critical status pursuant to a plan sponsor election under section 432(b)(4). In addition, section 432(e)

(9)(J) provides that a plan to which a suspension of benefits under section 432(e)

(9) applies may not emerge from critical

status under section 432(e)(4)(B) until (1)

the plan is no longer certified to be in critical or endangered status, and (2) the plan

is projected to avoid insolvency under

section 418E.

3. Certification and notice of section 432

status

Under section 432(b)(3)(A), the actuary for a multiemployer plan must, by

the 90th day of each plan year, certify the

plan’s section 432 status for the plan year

to the Secretary of the Treasury and to the

plan sponsor. The certification must state

whether: (1) the plan is in endangered

status for that plan year (or would be in

endangered status for that plan year but

708

for section 432(b)(5)); (2) the plan is or

will be in critical status for that plan year

or for any of the succeeding 5 plan years;

(3) the plan is in critical and declining

status for that plan year; or (4) the plan

is in neither endangered status nor critical status for that plan year. In the case

of a plan that is in a funding improvement

or rehabilitation period, the plan actuary

must also certify whether the plan is making the scheduled progress in meeting the

requirements of its funding improvement

or rehabilitation plan.

Section 432(b)(3)(D)(i) provides that

if a multiemployer plan is certified to be

in endangered status or critical status for

a plan year (or if the plan sponsor elects

under section 432(b)(4) for the plan to

be treated as in critical status for a plan

year), then the plan sponsor must provide

notice of the plan’s section 432 status to

participants and beneficiaries, the bargaining parties, PBGC, and the Secretary

of Labor, not later than 30 days after the

date of the certification. In addition, in

any case in which a plan sponsor elects to

be in critical status for a plan year under

section 432(b)(4), the plan sponsor must

notify the IRS of the election not later

than 30 days after the date of certification

(or any other time as prescribed in regulations or other guidance). Section 432(b)

(3)(D)(ii) provides that if the plan is or

will be in critical status, the notice must

explain the rules under which adjustable

benefits, as defined in section 432(e)(8),

may be reduced. Section 432(b)(3)(D)

(iii) provides that a plan sponsor must

notify the bargaining parties and PBGC

if the plan would be in endangered status

but for the application of section 432(b)

(5). Section 432(b)(3)(D)(v) provides that

if a multiemployer plan will be in critical

status for any of 5 succeeding plan years

(but not for the current plan year) and the

plan sponsor has not made an election to

be in critical status for the plan year under

section 432(b)(4), the plan sponsor must

notify PBGC of the projected critical status not later than 30 days after the date of

the certification.

4. Adoption and update of funding

improvement plan or rehabilitation plan

Section 432(c)(1)(A) provides that,

if a plan is in endangered status (includ-

Bulletin No. 2021–44

ing seriously endangered status), the plan

sponsor must adopt a funding improvement plan no later than 240 days after

the date the plan’s actuary is required to

make a certification of the plan’s section

432 status for the plan year. As described

in section 432(c)(1)(B)(i), the funding

improvement plan must be reasonably

expected to enable the plan to achieve certain funding improvements by the end of

its 10-year funding improvement period

(or 15-year funding improvement period

for a plan in seriously endangered status).

Similarly, section 432(e)(1)(A) provides

that the sponsor of a plan that is in critical status must adopt a rehabilitation plan

no later than 240 days after the date the

plan’s actuary is required to make a certification of the plan’s section 432 status

for the plan year. As described in section

432(e)(1)(B)(i), the rehabilitation plan

must be reasonably expected to enable

the plan to emerge from critical status by

the end of its 10-year rehabilitation period

(with alternative approaches available if

the plan sponsor determines, as described

in section 432(e)(3)(A)(ii), that the plan

cannot reasonably be expected to emerge

from critical status by the end of the rehabilitation period using all reasonable measures).4

Under section 432(c)(6), the plan sponsor of a multiemployer plan in endangered

status must update the funding improvement plan and schedule of contribution

rates annually to reflect the experience of

the plan. Similarly, under section 432(e)

(3)(B), the plan sponsor of a multiemployer plan in critical status must update

the rehabilitation plan and schedule of

contribution rates annually. The plan sponsor must include the update to the funding

improvement plan or rehabilitation plan

with its filing of the plan’s annual report

under section 104 of ERISA.

C. Applicability of excise tax under

section 4971

Section 4971(a) and (b) of the Code

imposes an excise tax on an employer

responsible for contributing to or under a

plan if the plan has an accumulated funding deficiency. Section 4971(g) provides

special rules that apply with respect to a

multiemployer plan in critical or endangered status. Under section 4971(g)(1)

(A), no excise tax is imposed under section 4971(a) or (b) for a taxable year with

respect to a plan in critical status for the

plan year that ends with or within the taxable year. However, under section 4971(g)

(3), if a plan in seriously endangered status fails to meet the applicable benchmarks by the end of the funding improvement period, or if a plan in critical status

either fails to meet the requirements of

section 432(e) by the end of the rehabilitation period or has received a certification under section 432(b)(3)(A)(ii) for

three consecutive years that the plan is

not making scheduled progress in meeting

its requirements under the rehabilitation

plan, then the plan is treated as having an

accumulated funding deficiency for purposes of section 4971. A plan described

in the preceding sentence will be treated

as having an accumulated funding deficiency for the last plan year in the funding

improvement, rehabilitation, or 3-consecutive-year period, as applicable, and

for each succeeding plan year until those

benchmarks or requirements are met.

The amount of the deemed accumulated

funding deficiency is equal to the greater

of the amount of the contributions necessary to meet those applicable benchmarks

or requirements, or the amount of such

accumulated funding deficiency without

regard to this special rule.

III. GUIDANCE

A. Election under section 9701 of the

ARP

Section 9701 of the ARP permits a

multiemployer plan sponsor to make an

election relating to the certification and

update requirements under section 432

of the Code for certain plan years. Section 9701(a)(1) of the ARP provides that,

notwithstanding the actuarial certification

of the plan’s section 432 status under section 432(b)(3) of the Code for the plan

year, a multiemployer plan sponsor may

make an election (freeze election) under

which the plan’s section 432 status for a

plan year (election year), is the same as the

plan’s section 432 status for the preceding

plan year. A multiemployer plan sponsor

may make a freeze election for the first

plan year beginning on or after March 1,

2020, or the next succeeding plan year.

If a freeze election applies to a multiemployer plan for a plan year (that is,

the plan year is an election year), then

the plan’s section 432 status for the preceding year applies for the plan year

(elected section 432 status), and the plan

must be operated in accordance with the

elected section 432 status for that plan

year, rather than the plan’s section 432

status as certified by the plan’s actuary

under section 432(b)(3) of the Code for

that plan year. Thus, for example, if a plan

has been certified to be in critical status

for a plan year (but was certified to be in

a different section 432 status for the preceding year), and the plan sponsor makes

a freeze election for the plan year, then the

plan is not treated as being in critical status for the election year. Because the plan

is not treated as being in critical status for

the election year, the plan sponsor is not

required to adopt a rehabilitation plan in

that year and cannot assess employer surcharges under section 432(e)(7), reduce

adjustable benefits under section 432(e)

(8), or restrict lump sum distributions

under section 432(f)(2).5

Section 9701(a)(2) of the ARP provides that the sponsor of a multiemployer

plan for which a freeze election is made

for a plan year, and that was in endangered status or critical status for the preceding year, is not required to update its

funding improvement plan, rehabilitation

plan, or schedules as otherwise required

under section 432(c)(6) or (e)(3)(B) of

the Code until the plan year following

the election year. Thus, for example, if

a multiemployer plan for which a freeze

Section 205 of the Worker, Retiree, and Employer Recovery Act of 2008, Pub. L. 110-458 (WRERA), provided for an elective extension of the funding improvement period or rehabilitation

period for multiemployer plans in endangered status or critical status for a plan year beginning in 2008 or 2009.

5

However, PBGC has informed the Treasury Department and IRS that, under section 4262(b)(1)(C) of ERISA, the determination of a plan’s eligibility for special financial assistance is based

on the plan’s certified section 432 status, rather than its elected section 432 status.

4

Bulletin No. 2021–44

709

November 1, 2021

election is made was certified as being

in critical status in both the election year

and the preceding year, then the plan

sponsor is not required to update the

plan’s rehabilitation plan for the election

year. However, the actuary for a multiemployer plan that is in a funding improvement period or rehabilitation period must

certify whether the plan is making the

scheduled progress under its funding

improvement plan or rehabilitation plan,

as applicable, regardless of whether the

plan year is an election year.

If elections under section 9701(a) of

the ARP are made for 2 plan years, then

the plan’s section 432 status for both years

is the plan’s section 432 status for the plan

year immediately preceding the first election year. Thus, for example, if the sponsor of a multiemployer plan with a plan

year beginning on April 1 makes freeze

elections for both the plan year beginning

April 1, 2020, and the plan year beginning

April 1, 2021, then the plan’s section 432

status for both plan years is the plan’s

section 432 status for the plan year beginning April 1, 2019. This is true even if the

plan’s actuary had previously certified the

plan’s section 432 status for the plan year

beginning on April 1, 2020.

Section 9701(b) of the ARP provides

that if a multiemployer plan has, without

regard to a freeze election, been certified

by the plan actuary to be in critical status for the election year, then the plan is

treated as a plan in critical status for that

year for purposes of applying the minimum funding requirement under section

412(b)(3) of the Code and the section

4971(g)(1)(A) exception to the excise tax

on an accumulated funding deficiency

under section 4971(a). Accordingly, the

minimum funding requirements do not

apply for a plan year with respect to such

a plan for which a freeze election is made.

B. Election under section 9702 of the

ARP

Section 9702 of the ARP provides that

the sponsor of a multiemployer plan in

endangered status or critical status for a

plan year beginning in 2020 or 2021 may

make an election (extension election)

under which the plan’s funding improvement period or rehabilitation period,

whichever is applicable, is extended by

November 1, 2021

5 years. Section 9702 of the ARP also

provides that a plan’s eligibility to make

an extension election is made taking into

account the plan’s section 432 status, as

determined after application of section

9701 of the ARP.

If the sponsor of a multiemployer plan

that is in endangered status or critical

status for a plan year beginning in either

2020 or 2021 makes an extension election then, for purposes of section 432 of

the Code, the plan’s funding improvement

period or rehabilitation period, whichever

is applicable, is extended by 5 years. For

example, if a multiemployer plan’s section

432 status for the 2021 plan year is endangered (taking into account any freeze election under section 9701(a)(1) of the ARP),

and the plan sponsor makes an extension

election, then the funding improvement

period is extended by 5 years. Thus, if

the plan’s funding improvement period

(as determined taking into account an

election under section 205 of WRERA)

ends on the last day of the 2022 plan year

(assuming the plan does not change from

endangered status at an earlier date), and

the plan sponsor timely elects to extend

the funding improvement period in accordance with section 9702 of the ARP,

then the funding improvement period is

extended so that it ends on the last day of

the 2027 plan year (assuming that the plan

does not change from endangered status at

an earlier date). Although a sponsor may

make an extension election for either the

2020 plan year or the 2021 plan year, only

one extension election may be made.

A plan sponsor should take into

account the interaction between sections

9701(a) and 9702 of the ARP in choosing

whether to elect the relief provided under

either section. For example, if the sponsor

of a plan that was in neither endangered

status nor critical status for the 2020 plan

year, but that is certified to be in endangered status for the 2021 plan year, makes

a freeze election for the 2021 plan year,

then the sponsor could not elect under section 9702 of the ARP to extend the plan’s

funding improvement period. The sponsor cannot make an extension election

because the extension election is available

only in the case of a plan that is in endangered status for a plan year that begins

in 2020 or 2021 (and section 9702 of the

ARP provides that the determination of

710

the plan’s status is made after application

of section 9701 of the ARP).

C. Timing and submission of elections

under sections 9701 and 9702 of the

ARP

1. Timing of elections

Section 9701(c)(1)(A) of the ARP provides that a freeze election under section

9701(a) must be made at the time and in the

manner that the Secretary of the Treasury

or the Secretary’s delegate may prescribe

and, once made, may be revoked only

with the consent of the Secretary. Under

section 9702(b)(1) of the ARP, an election

to extend a plan’s funding improvement

period or rehabilitation period, as applicable, must be made at the time, and in the

manner and form as the Secretary of the

Treasury or the Secretary’s delegate may

prescribe, in consultation with the Secretary of Labor.

If a freeze election changes a plan’s

section 432 status for a plan year, the

freeze election must be made within 30

days after the plan actuary certifies the

plan’s section 432 status (or, if earlier,

30 days after the due date for that certification under section 432(b)(3)(A) of the

Code). If a freeze election does not change

a plan’s section 432 status for a plan year,

the freeze election must be made by the

last day of the election year. Pursuant to

the authority in section 9702(b)(1) of the

ARP to specify the time and manner of

an extension election, an extension election must be made by the last day of the

election year. However, a freeze election

or an extension election will be treated as

timely if it is made by December 31, 2021.

2. Submission of elections to the IRS

Section 9701(c)(1)(B) of the ARP provides that if a freeze election is made for a

plan year before the annual certification of

the plan’s section 432 status for that plan

year is submitted to the Secretary (or the

Secretary’s delegate), then the election

must be included with the submission of

the certification. If the election is made

after the submission of the certification,

then the election must be submitted to the

IRS not later than 30 days after the due

date for making the election.

Bulletin No. 2021–44

Pursuant to the authority in section

9702(b)(1) of the ARP, an extension election must be submitted to the Secretary (or

the Secretary’s delegate) under the same

rules that apply for a freeze election. If

more than one election is made for a plan

(for example, freeze elections are made for

two election years, or a freeze election and

an extension election are both made for a

plan year), the elections may be included

in a single submission.

The following submission procedures

apply if a freeze election or extension election is made after the plan’s annual certification is submitted to the IRS Employee

Plans Compliance Unit (EPCU). A plan

sponsor may submit the election by email

(EPCU@IRS.GOV), e-fax (855-2157122), or regular mail at the following

address:

Internal Revenue Service

Employee Plans Compliance Unit

Group 7602 (TEGE:EP:EPCU)

230 S. Dearborn Street

Room 1700 - 17th Floor

Chicago, IL 60604

An election must include each of the

following items of information, as applicable:

i. Name, address, telephone number,

and Employer Identification Number

(EIN) of the plan sponsor.

ii. Name, plan EIN (if different from

sponsor EIN), and plan number of the

plan for which the election is being

made.

iii. A statement that the election is

intended to be an election under

either section 9701 or section 9702 of

the ARP.

iv. A statement of the plan year for which

the election is being made.

v. The section 432 status of the plan for

the election year taking the freeze

election into account.

vi. Whether the election is contingent on

the resolution of arbitration regarding

the election.

vii. The signature of an authorized trustee

who is a current member of the board

of trustees that is the plan sponsor.

3. Election subject to arbitration

If, as of the otherwise applicable deadline for making a freeze election or extension election, a plan sponsor has been

Bulletin No. 2021–44

unable to reach agreement as to whether

to make an election so that the decision

must be resolved through an arbitration

process, there is no extension of the deadline for making the election. However, a

plan sponsor in this situation may make

an election that is contingent on the resolution of the arbitration and indicate that

contingency as required under section

III.C.2.vi of this notice.

4. Revocation of election

Pursuant to this notice, revocation of

a freeze election or extension election is

automatically approved if the revocation

request: (1) is submitted to IRS EPCU

in accordance with the instructions provided in section III.C.2 of this notice;

(2) satisfies the conditions described in

either paragraph (i) (revocation of election contingent on outcome of arbitration) or (ii) (revocation of freeze election

in other circumstances) of this section

III.C.4, as applicable; and (3) in the case

of a freeze election, satisfies the conditions under paragraph (iii) of this section

III.C.4.

i. If the freeze election or extension

election was made contingent on

the resolution of arbitration, and the

result of the arbitration is to not make

that election, the plan sponsor must

submit the request to revoke the election within 30 days following the resolution of the arbitration and include

a copy of the arbitration ruling.

ii. If the freeze election was a freeze

election that was not made contingent on the resolution of arbitration,

the plan sponsor must submit the

request to revoke the election by the

due date for the adoption of a funding improvement plan, rehabilitation

plan, or update, whichever is applicable, for the election year after taking

the revocation into account.

iii. The additional requirements that

must be satisfied for the revocation of

a freeze election are-a. The plan sponsor must have

complied with the requirements

of section 432(d)(1) and (2) or

section 432(f)(1) and (3), as

applicable, determined as though

a freeze election had never been

made; and

711

b.

Notice of the plan’s certified section 432 status for the election

year must be provided no later

than 30 days after the request

for revocation is submitted. This

notice must satisfy the requirements of section 432(b)(3)(D),

include a statement that the election was revoked and, in the case

of a freeze election revoked on

account of arbitration, explain

the consequences of the revocation.

Although a request to revoke either a

freeze election on an extension election

will not be automatically approved in circumstances other than those set forth in

this section III.C.4, the IRS may approve

a revocation request that is made in accordance with the private letter ruling request

procedures under Rev. Proc. 2021-1,

2021-1 IRB 1, or its successors.

D. Notice requirements for section

9701 election

Section 9701(c)(2) of the ARP provides special notice rules that apply when

an election is made to freeze a plan’s section 432 status. In the case of a plan that

has been certified to be in endangered

status or critical status for a plan year, but

that is in neither endangered status nor

critical status as a result of the freeze election, the plan sponsor must provide the

notice described in section 9701(c)(2)(A)

of the ARP to the participants and beneficiaries, the bargaining parties, PBGC, and

the Department of Labor (DOL) in lieu of

the notice that is otherwise required under

section 432(b)(3)(D) of the Code. Section

9701(c)(2)(A) of the ARP provides that

the notice must include such information

about the election as the Secretary (in

consultation with the Secretary of Labor)

may require. In the case of a plan that

has been certified to be in critical status

but is in endangered status as a result of

a freeze election, section 9701(c)(2)(B) of

the ARP requires the plan sponsor to provide the notice that would have been provided if the plan had been certified to be in

endangered status in lieu of the notice that

is otherwise required under section 432(b)

(3)(D)(ii) of the Code.

The notice required under section

9701(c)(2)(A) of the ARP must be written

November 1, 2021

in a manner calculated to be understood

by the average employee to whom the

notice applies. The notice must include

each of the following items of information, as applicable:

i. The name of the plan, the EIN of the

plan sponsor, the EIN of the plan (if

different from the EIN of the plan

sponsor), and the plan number.

ii. A statement that a freeze election has

been made under the American Rescue Plan Act of 2021 to treat the plan

as being neither in endangered nor

critical status and the year or years to

which the election applies.

iii. The plan’s endangered or critical status for the election year (or election

years) as certified by the plan’s actuary (that is, the plan’s status in each

election year if no freeze election

were made).

iv. An explanation that: (1) the freeze

election applies for the current plan

year (and the immediately preceding year, if applicable); and (2) if

the plan is in endangered or critical

status for the following plan year, the

plan sponsor will provide notice of

the plan’s section 432 status (that is,

endangered or critical) for that following year, that steps will have to

be taken to improve the plan’s funded

situation, and that those steps may

include increases in contributions and

reductions in future benefit accruals.

v. Solely in the case of a plan that was

certified to be in critical status for the

election year, an explanation that, if

the plan is in critical status for the following year, the steps that will have to

be taken to improve the plan’s funded

situation will include a surcharge

on employer contributions and the

suspension of the payment of lump

sums and similar accelerated distributions for individuals who commence

receiving benefits after notice is provided of the plan’s critical status, and

may include amendments to reduce

early retirement benefits or other

adjustable benefits for those individuals.

vi. Information on how to obtain additional information about the election

from the plan administrator, including a telephone number, address, and

email address (if appropriate).

November 1, 2021

In accordance with section 9701(c)(2)

(A)(ii) of the ARP, if the freeze election

is made before the date the annual certification of the plan’s section 432 status is

submitted to the IRS, then this notice must

be furnished no later than 30 days after the

date of the certification. If the election is

made after the date the annual certification

is submitted to the IRS, then this notice

must be provided no later than 30 days

after the date of the election. The notice to

participants and beneficiaries must be provided either in the form of a paper document or in an electronic form that satisfies

the requirements of § 1.401(a)-21 of the

Income Tax Regulations.

The notice that must be submitted to

PBGC should be sent to the following

address:

Pension Benefit Guaranty Corporation Multiemployer Program

Division

1200 K Street, N.W., Suite 930

Washington, D.C. 20005

Alternatively, the notice to PBGC may

be submitted electronically to multiemployerprogram@pbgc.gov.

The notice that must be submitted

to DOL should be sent to the following address:

U.S. Department of Labor

Employee Benefits Security

Administration Public Disclosure

Room, N-1513

200 Constitution Ave., N.W.

Washington, DC 20210

Alternatively, the notice may be submitted electronically to DOL in accordance with instructions posted on the

Employee Benefits Security Administration website at www.dol.gov/ebsa.

Notices received by DOL will be available

for public inspection at the Public Disclosure Room, and accessible electronically

at that same website.

E. Special funding rules under section

9703 of the ARP

Section 9703(a)(2) of the ARP amended

section 431(b)(8) of the Code to provide a

modified version of the special amortization rule under section 431(b)(8)(A) and

the special asset valuation rule under section 431(b)(8)(B) for a multiemployer plan

that meets the solvency test under section

431(b)(8)(C). Specifically, section 431(b)

712

(8)(F)(i) allows a multiemployer plan

sponsor to apply either the special amortization rule or the special asset valuation

rule (or both) with respect to certain experience losses that are incurred in either or

both of the first 2 plan years ending after

February 29, 2020. Section 431(b)(8)(F)

(ii) allows experience losses related to the

virus SARS-CoV-2 or coronavirus disease 2019 (COVID-19) incurred during

one of those 2 plan years to be added to

those investment losses. The experience

losses related to COVID-19 (COVID-19

losses) include experience losses related

to reductions in contributions, reductions

in employment, and deviations from

anticipated retirement rates, as determined

by the plan sponsor. For purposes of this

relief, the IRS is required to rely on the

plan sponsor’s calculations of plan losses

unless such calculations are clearly erroneous.

Section 431(b)(8)(B)(iii) provides

that if both the special amortization rule

of section 431(b)(8)(A) and the special

asset valuation rule of section 431(b)(8)

(B) apply for a plan year, then the plan

is required to treat any reduction in the

plan’s unfunded accrued liability resulting

from the application of the special asset

valuation rule as a separate experience

amortization base to be amortized in equal

annual installments (until fully amortized)

over a period of 30 plan years. However,

section 431(b)(8)(F)(iii) provides that

the rule under section 431(b)(8)(B)(iii)

applies for a plan year even if the special

amortization rule under section 431(b)(8)

(A) does not apply for that year.

Under section 431(b)(8)(F), the special

amortization rule under section 431(b)

(8)(A) or the special asset valuation

rule under section 431(b)(8)(B) may be

applied with respect to net investment

losses that are incurred in either or both of

the first 2 plan years ending after February

29, 2020 without regard to whether the

relief provided under section 432(b)(8)

was previously applied. However, these

special funding rules are not available in

the case of a plan to which special financial assistance is paid under section 4262

of ERISA.

The relief provided under section

431(b)(8)(F) of the Code is effective for

the first day of the first plan year ending on

or after February 29, 2020, except that any

Bulletin No. 2021–44

application of the special funding rules

that affects the plan’s funding standard

account for the first plan year beginning

after February 29, 2020, is disregarded

for purposes of applying section 432 to

that plan year. However, the restriction

on plan amendments increasing benefits

in section 431(b)(8)(D) is effective on the

date of enactment of the ARP (March 11,

2021).

1. Application of the special amortization

rule and special asset valuation rule

If, pursuant to section 431(b)(8)(F), a

plan is applying the special amortization

rule of section 431(b)(8)(A) to either or

both of the first 2 plan years ending after

February 29, 2020, then the COVID-19

losses for that plan year are added to the

net investment losses for the plan year.

The sum of those losses for a plan year

is treated as an item separate from other

experience losses to be amortized in equal

annual installments (until fully amortized)

over an extended amortization period.

The extended amortization period begins

with the plan year in which that portion of

the net investment loss is first recognized

in the actuarial value of assets and ends

with the last plan year in the 30-plan-year

period beginning with the plan year in

which the net investment loss is incurred.

The guidance provided in section III.A

of Notice 2010-83 applies with respect

to the treatment of net investment losses

for purposes of the special amortization

rule, except that: (1) February 29, 2020,

is substituted for August 31, 2008, in the

definition of eligible loss year, and (2)

the COVID-19 losses for an eligible loss

year are added to the eligible net investment loss described in Q&A A-5 of Notice

2010-83 for that year before applying the

rules of Q&A A-3 and Q&A A-4 of that

notice for a year.

If, pursuant to section 431(b)(8)(F),

a plan is applying the special asset valuation rule of section 431(b)(8)(B) with

respect to net investment losses incurred

in either or both of the first 2 plan years

ending on or after February 29, 2020, then

the guidance on the special asset valuation

rule provided in section III.V of Notice

2010-83 applies, except that: (1) February 29, 2020, is substituted for August

31, 2008, in Q&A V-3, and (2) the amortization period applicable to the change

in unfunded accrued liability attributable

to the change in asset valuation method

described in Q&A V-4 is 30 years, even

if the plan sponsor decides not to use the

special amortization rule of section 431(b)

(8)(A). Note that COVID-19 losses are

not included in the eligible net investment

losses described in Q&A V-1 of Notice

2010-83.

Section 431(b)(8)(C), as applied under

section 9703(a)(2) of the ARP, describes

the solvency test that a multiemployer

plan must meet in order for either the special amortization rule or the special asset

valuation rule, or both, to apply to losses

incurred in either or both of the first 2 plan

years beginning on or after February 29,

2020. The guidance on the solvency test

provided in section III.S of Notice 201083 also applies in determining a multiem-

ployer plan’s solvency through the end of

the amortization period for purposes of

applying the special funding rules, except

that if the multiemployer plan sponsor

decides to apply only the special asset valuation rule under section 431(b)(8)(B) of

the Code, then the period for determining

the plan’s solvency is 30 years.

The application of the special rules

must be taken into account in any contemporaneous or subsequent certification

of status required under section 432(b)

(3) and in any contemporaneous or subsequent required adoption or update of a

funding improvement plan or rehabilitation plan. The guidance on certification

of status under section 432 provided in

section III.C, Q&As C-1 through C-3, of

Notice 2010-83 applies for purposes of

this certification requirement.

2. Examples of special amortization rules

Example 1

Assume that the sponsor of a multiemployer plan

that uses the calendar year as its plan year and has a

beginning of year valuation date decides to apply the

special amortization rule in section 431(b)(8)(A) in

order to extend the amortization period for the eligible net investment loss of $1,000,000 incurred in the

plan year beginning January 1, 2020. The valuation

interest rate for the plan is 7 percent. Assume that

$100,000 of the net investment loss is first reflected

in the January 1, 2021 actuarial valuation. The plan

has a total net experience loss in 2020 that is first

reflected in the January 1, 2021 actuarial valuation

of $3,000,000. In addition to the $100,000 of eligible net investment losses reflected in the actuarial

value of plan assets as of January 1, 2021, the total

net experience loss includes $900,000 of COVID-19

related losses from reductions in contributions and

employment. The following table sets forth the components of the experience loss:

Amounts (Dollars)

(1)

Total net experience gain (or loss) in 2020 reflected in actuarial valuation as of January 1, 2021

($3,000,000)

(2)

Portion of 2020 eligible net investment loss reflected in actuarial value of plan assets as of January 1, 2021

($100,000)

(3)

Portion of net experience loss attributable to COVID-19 losses

($900,000)

(4)

Portion of net experience loss not attributable to 2020 eligible net investment loss or COVID-19 losses

($2,000,000)

Under section 431(b)(2)(B)(iii), amortization

of the experience loss of $3,000,000 would be

over 15 plan years at $307,835 per year (that is,

$3,000,000/9.745468). Under the special amortization rule, the experience loss of $3,000,000 is bifurcated into two pieces: (a) the portion attributable

to the 2020 eligible net investment loss ($100,000)

is added to the additional COVID-19 losses

($900,000), resulting in an amortization charge base

Bulletin No. 2021–44

of $1,000,000, and (b) the remaining loss, resulting in an amortization charge base of $2,000,000.

The $1,000,000 loss is amortized over the 29-year

period ending in 2049 (which is the 30th plan year

of the 30-plan year period that began in 2020, the

plan year in which the loss was incurred), resulting in an amortization charge of $76,120 per year

(that is, $1,000,000/13.137111), and the remaining

$2,000,000 is amortized over a period of 15 years,

713

resulting in an amortization charge of $205,224 per

year ($2,000,000/9.745468).

The combined amortization charges are

$281,344 annually for the first 15 plan years (that is,

$76,120 + $205,224), and $76,120 annually for the

succeeding 14 plan years. This results in a reduction

in amortization charges of $26,491 (that is, $307,835

– $281,344) during those first 15 plan years and an

increase in amortization charges of $76,120 per year

November 1, 2021

for each of those succeeding 14 plan years, as contrasted with the schedule of charges under section

431(b)(2)(B)(iii) (that is, level charges of $307,835

over 15 plan years).

Example 2

The facts are the same as in Example 1, except

that the plan has a total net experience loss in 2020 of

$400,000 that is first reflected in the January 1, 2021

actuarial valuation.

Under section 431(b)(2)(B)(iii), amortization of the net experience loss of $400,000 would

be over 15 plan years at $41,045 per year (that is,

$400,000/9.745468). Under the special amortization

rule, the experience loss of $400,000 is bifurcated

into two pieces: (a) the portion attributable to the

2020 eligible net investment loss and COVID-19

losses, resulting in an amortization charge base of

$1,000,000, and (b) an offsetting credit base, resulting in an amortization credit base of $600,000. The

$1,000,000 loss is amortized over the 29-year period

ending in 2049 (which is the 30th plan year of the

30-plan year period that began in 2020, the plan

year in which the loss was incurred), resulting in

an amortization charge of $76,120 per year (that is,

$1,000,000/13.137111), and the amortization credit

base is amortized over a period of 15 plan years,

resulting in an amortization credit of $61,567 per

year ($600,000/9.745468).

The combined amortization charges are $14,553

annually for the first 15 plan years (that is, $76,120

- $61,567), and $76,120 annually for the succeeding

14 plan years.

Example 3

The facts are the same as in Example 1, except

that the plan has a total net experience gain in 2020

of $100,000 that is first reflected in the January 1,

2021 actuarial valuation.

Under section 431(b)(3)(B)(ii), amortization

of the total net experience gain of $100,000 would

be over 15 plan years at $10,261 per year (that is,

$100,000/9.745468). Under the special amortization rule, the total net experience gain of $100,000

is bifurcated into two pieces: (a) the portion attributable to the 2020 eligible net investment loss and

COVID-19 losses, resulting in an amortization

charge base of $1,000,000, and (b) an offsetting

gain base, resulting in an amortization credit base of

$1,100,000. The $1,000,000 loss is amortized over

the 29-year period ending in 2049 (which is the 30th

plan year of the 30-plan year period that began in

2020, the plan year in which the loss was incurred),

resulting in an amortization charge of $76,120 per

year (that is, $1,000,000/13.137111), and the credit

base is amortized over a period of 15 plan years,

resulting in an amortization credit of $112,873 per

year (that is, $1,100,000/9.745468).

The combined amortization credits are $36,753

annually for the first 15 plan years (that is, $76,120 $112,873), and the amortization charges are $76,120

annually for the succeeding 14 plan years.

Example 4

The facts are the same as in Example 1. For the

January 1, 2022 actuarial valuation, an additional

$100,000 of the 2020 eligible net investment loss is

reflected in the actuarial value of plan assets as of

January 1, 2022.

The additional $100,000 attributable to the 2020

eligible net investment loss reflected in the actuarial

November 1, 2021

value of plan assets as of January 1, 2022, is amortized over the 28-year period ending in 2049 (which

is the 30th plan year of the 30-plan year period that

began in 2020, the plan year in which the loss was

incurred), resulting in an amortization charge of

$7,700 per year (that is, $100,000/12.986709) and is

added to the existing amortization charges.

(8)(E), except that “January 31, 2022”

is substituted for “January 18, 2011” in

Q&A N-6 and the addresses in section

III.D of this notice should be used.

3. Restriction on benefit increases

If a plan sponsor decides to apply

either or both of the special funding rules

under section 431(b)(8) for a plan year

after the filing of a Form 5500 (Annual

Return/Report of Employee Benefit

Plan) and Schedule MB (Multiemployer

Defined Benefit Plan and Certain Money

Purchase Plan Actuarial Information)

for that plan year that did not reflect the

application of the special funding rules,

an amended Form 5500 may be filed

with a revised Schedule MB showing

the corrected information for that year.

If an amended Form 5500 and Schedule MB are not filed for that plan year,

the Schedule MB filed for a subsequent

plan year that is no later than the plan

year beginning in 2021 must include an

attachment showing how the information

on a Schedule MB filed for any previous

plan year would have differed if it had

reflected application of the special funding rules (to the extent applicable) for

that previous plan year. The attachment

described in the instructions for Line 9f

of the Schedule MB is an appropriate

means for providing an explanation of

this difference. These reporting options

also apply if the plan sponsor decides to

apply either or both of the special funding

rules under section 431(b)(8) for a plan

year and a Form 5500 and Schedule MB

were filed for that plan year that reflected

application of the special funding rules,

but the calculations were different from

the calculations required by this notice.

Under section 431(b)(8)(D), if either or

both special funding rules apply for any

plan year, a special restriction on benefit increases applies, in addition to any

other applicable restrictions on benefit

increases. The guidance on restrictions

on plan amendments increasing benefits

provided in section III.R of Notice 201083 also applies to benefit restrictions

described in section 431(b)(8)(D) with

respect to eligible loss years for which the

relief for COVID-19 losses applies, except

that “March 11, 2021” (the date of enactment of the ARP) is substituted for “June

5, 2010.” Thus, benefit increases that

went into effect before March 11, 2021,

are not subject to the restriction under

section 431(b)(8)(D). Benefit increases

that are effective on or after March 11,

2021, are subject to the restriction, even if

adopted before that date.

4. Decision to apply special funding rules

The guidance on the decision to apply

the relief provided in section III.D of

Notice 2010-83 applies with respect to

the decision to apply either or both of the

special funding rules, except that in lieu of

the deadline described in Q&A D-2 of that

notice, the decision must be made by the

deadline described for a freeze election or

extension election in section III.C.1 of this

notice.

Under section 431(b)(8)(E), the sponsor of a multiemployer plan to which

either or both of the special funding rules

apply must give notice of application of

the special rules to plan participants and

beneficiaries. In addition, the plan sponsor must inform PBGC of the application

of the special funding rules in such form

and manner as the Director of the PBGC

may prescribe. The guidance on providing

the notice to participants, beneficiaries,

PBGC and DOL provided in section III.N

of Notice 2010-83 applies for purposes of

the notice requirement in section 431(b)

714

5. Reporting requirements

IV. Paperwork Reduction Act

The collection of information contained in this notice has been reviewed and

approved by the Office of Management

and Budget in accordance with the Paperwork Reduction Act (44 U.S.C. 3507).

An agency may not conduct or sponsor,

and a person is not required to respond

to, a collection of information unless the

collection of information displays a valid

OMB control number. The OMB control

number for this notice is 1545-2300.

Bulletin No. 2021–44

The collections of information are in

section III of this notice. Specifically, section III.C describes procedures for submitting elections under section 9701 and

section 9702 of the ARP to the IRS and on

the revocation of an election. Section III.D

provides guidance on the notice required

if an election under section 9701 is made.

Section III.E.5 provides guidance with

respect to reporting a decision to apply

the relief described in section 9703 of the

ARP. These collections of information are

mandatory for those plan sponsors making an election and providing the related

notices and filings. The likely respondents

are sponsors of multiemployer defined

benefit retirement plans.

Because the relief under the ARP is

available only for two years, these collection of information estimates apply only in

2021 and 2022. The estimated number of

respondents for each collection was determined using the database for the Form

5500, Schedule MB for 2019, which is the

Statutory source

Section 9701 of the ARP

Section 9702 of the ARP

Section 9703 of the ARP and

­section 432(b)(8) of the Code

Total

Number of respondents per year

Hourly burden

Total burden Cost per year

6

277

1 hour

277 hours

N/A

145

1 hour

145 hours

N/A

515

55 minutes (.92 hour) 474 hours

N/A

Books or records relating to a collection of information must be retained as

long as their contents may become material in the administration of any internal

revenue law. Generally, tax returns and

tax return information are confidential, as

required by section 6103.

V. Drafting Information

937

last year for which the data is complete.

The database for the Form 5500, Schedule

MB for 2020, though incomplete, has been

used to confirm some of this information.

The hourly burden of the collection of

information was determined using the burden information reported in Notice 200931, 2009-16 IRB 856 (sections 9701 and

9702), and Notice 2010-83 (section 9703),

which imposed burdens substantially similar to the burdens imposed in this notice.

No estimate for the cost burden is available.

896 hours

The principal author of this notice is

Diane S. Bloom of the Office of Associate

Chief Counsel, Employee Plans, Exempt

Organizations, and Employment Taxes.

For further information, please contact

Ms. Bloom at (202) 317-6700. This telephone call is not toll-free.

6

The burden imposed is increased to 2 hours to include the hourly burden for revoking an election in accordance with section III.C.4 of this notice. The estimated number of respondents for

this additional collection is 1.

Bulletin No. 2021–44

715

November 1, 2021

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:

Amplified describes a situation where

no change is being made in a prior published 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

applied to A, and the new ruling holds that

the same principle also applies to B, the

earlier ruling is amplified. (Compare with

modified, below).

Clarified is used in those instances

where the language in a prior ruling is

being made clear because the language

has caused, or may cause, some confusion. It is not used where a position in a

prior ruling is being changed.

Distinguished describes a situation

where a ruling mentions a previously published ruling and points out an essential

difference between them.

Modified is 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 and clarified, above).

Obsoleted describes a previously published ruling that is not considered determinative with respect to future transactions.

This term is most commonly used in a ruling

that lists previously published rulings 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.

Revoked describes situations where the

position in the previously published ruling

is not correct and the correct position is

being stated in a new ruling.

Superseded describes 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

period of time in separate rulings. If the

new ruling does more than restate the substance of a prior ruling, a combination of

terms is used. For example, modified and

superseded describes 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.

Supplemented is 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 rulings in the series.

Suspended is 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 material

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.

Bulletin No. 2021–44

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.

i

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.

November 1, 2021

Numerical Finding List1

Revenue Procedures:—Continued

Bulletin 2021–44

2021-44, 2021-42 I.R.B. 469

2021-42, 2021-43 I.R.B. 666

Announcements:

2021-12, 2021-31 I.R.B. 267

2021-13, 2021-33 I.R.B. 314

2021-14, 2021-33 I.R.B. 315

Notices:

2021-39, 2021-27 I.R.B. 3

2021-40, 2021-28 I.R.B. 15

2021-41, 2021-29 I.R.B. 17

2021-42, 2021-29 I.R.B. 19

2021-38, 2021-30 I.R.B. 155

2021-44, 2021-31 I.R.B. 166

2021-45, 2021-31 I.R.B. 170

2021-47, 2021-32 I.R.B. 269

2021-46, 2021-33 I.R.B. 303

2021-48, 2021-33 I.R.B. 305

2021-49, 2021-34 I.R.B. 316

2021-43, 2021-35 I.R.B. 332

2021-50, 2021-35 I.R.B. 333

2021-51, 2021-36 I.R.B. 361

2021-52, 2021-38 I.R.B. 381

2021-53, 2021-39 I.R.B. 438

2021-54, 2021-41 I.R.B. 457

2021-55, 2021-41 I.R.B. 461

2021-58, 2021-43 I.R.B. 660

2021-59, 2021-43 I.R.B. 664

2021-57, 2021-44 I.R.B. 706

Revenue Rulings:

2021-12, 2021-27 I.R.B. 1

2021-13, 2021-30 I.R.B. 152

2021-14, 2021-31 I.R.B. 164

2021-19, 2021-42 I.R.B. 470

2021-15, 2021-35 I.R.B. 331

2021-16, 2021-36 I.R.B. 359

2021-17, 2021-37 I.R.B. 362

2021-18, 2021-40 I.R.B. 447

2021-21, 2021-44 I.R.B. 704

Treasury Decisions:

9951, 2021-30 I.R.B. 25

9952, 2021-39 I.R.B. 428

9953, 2021-39 I.R.B. 430

9956, 2021-41 I.R.B. 449

9957, 2021-41 I.R.B. 452

9955, 2021-42 I.R.B. 471

Proposed Regulations:

REG-107705-21, 2021-30 I.R.B. 162

REG-102951-16, 2021-32 I.R.B. 272

REG-109077-21, 2021-39 I.R.B. 445

REG-100718-21, 2021-42 I.R.B. 653

REG-107707-21, 2021-42 I.R.B. 657

Revenue Procedures:

2021-28, 2021-27 I.R.B. 5

2021-29, 2021-27 I.R.B. 12

2021-24, 2021-29 I.R.B. 19

2021-14, 2021-30 I.R.B. 158

2021-30, 2021-31 I.R.B. 172

2021-31, 2021-33 I.R.B. 324

2021-33, 2021-34 I.R.B. 327

2021-34, 2021-35 I.R.B. 337

2021-35, 2021-35 I.R.B. 355

2021-36, 2021-35 I.R.B. 357

2021-37, 2021-38 I.R.B. 385

2021-38, 2021-38 I.R.B. 425

2021-39, 2021-38 I.R.B. 426

2021-40, 2021-38 I.R.B. 426

2021-41, 2021-39 I.R.B. 443

2021-32, 2021-42 I.R.B. 465

A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2021–27 through 2021–52 is in Internal Revenue Bulletin

2021–52, dated December 27, 2021.

1

November 1, 2021

ii

Bulletin No. 2021–44

Finding List of Current Actions on

Previously Published Items1

Bulletin 2021–44

A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2021–27 through 2021–52 is in Internal Revenue Bulletin

2021–52, dated December 27, 2021.

1

Bulletin No. 2021–44

iii

November 1, 2021

Internal Revenue Service

Washington, DC 20224

Official Business

Penalty for Private Use, $300

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 at www.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.