# Bulletin No. 2021–44

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URL: https://www.frixlaw.com/law-library/documents/agency%3Airs%3A043733ca40539437

## Record

- **Collection:** Agency decision
- **Document type:** Agency decision

## Text

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.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/agency%3Airs%3A043733ca40539437. Public record. Not legal advice.