These synopses are intended only as aids to the reader in

Agency decision

Ask Donna

What actually matters in this document.

Text

HIGHLIGHTS

OF THIS ISSUE

Bulletin No. 2024–6

February 5, 2024

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.

ADMINISTRATIVE

Announcement 2024-4, page 665.

Section 80603(b)(3) of the Infrastructure Investment and

Jobs Act, Pub. L. No. 117-58, 135 Stat. 429, 1339 (2021)

(Infrastructure Act) amended section 6050I of the Internal

Revenue Code to add digital assets to the list of assets

included in the definition of cash in section 6050I(d). This

Announcement clarifies that until the IRS issues new final

regulations under section 6050I to implement the Infrastructure Act, digital assets are not required to be included

when determining whether cash received in a single transaction (or two or more related transactions) has a value in

excess of the $10,000 reporting threshold for purposes

of determining whether reporting is required under section 6050I.

Notice 2024-22, page 662.

The IRS is issuing initial guidance on pension-linked emergency savings accounts (PLESAs), which are individual

accounts, in defined contribution plans, that are designed

to encourage employees to save for financial emergencies. The notice provides initial guidance regarding antiabuse rules under section 402A(e)(12) of the Internal

Revenue Code (Code) to assist in the implementation of

SECURE 2.0 Act section 127 provisions.

T.D. 9987, page 648.

EMPLOYEE PLANS

These regulations provide guidance relating to the minimum

present value requirements applicable to certain defined

benefit pension plans. These regulations provide guidance

on changes made by the Pension Protection Act of 2006

to the prescribed interest rate and mortality table and other

guidance, including rules regarding the treatment of preretirement mortality discounts and Social Security level income

options.

Notice 2024-21, page 659.

INCOME TAX

This notice sets forth updates on the corporate bond

monthly yield curve, the corresponding spot segment rates

for January 2024 used under § 417(e)(3)(D), the 24-month

average segment rates applicable for December 2023, and

the 30-year Treasury rates, as reflected by the application of

§ 430(h)(2)(C)(iv).

Finding Lists begin on page ii.

Rev. Rul. 2024-3, page 646.

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 February 2024.

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.

February 5, 2024

Bulletin No. 2024–6

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. 2024-03

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

February 5, 2024

tax purposes for February 2024 (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. 2024-03 TABLE 1

Applicable Federal Rates (AFR) for February 2024

Period for Compounding

Annual

Semiannual

Quarterly

Short-term

4.68%

4.63%

4.60%

5.15%

5.09%

5.06%

5.64%

5.56%

5.52%

6.11%

6.02%

5.98%

Mid-term

3.98%

3.94%

3.92%

4.38%

4.33%

4.31%

4.79%

4.73%

4.70%

5.19%

5.12%

5.09%

6.00%

5.91%

5.87%

7.02%

6.90%

6.84%

Long-term

4.18%

4.14%

4.12%

4.60%

4.55%

4.52%

5.03%

4.97%

4.94%

5.45%

5.38%

5.34%

Annual

3.55%

3.01%

3.16%

REV. RUL. 2024-03 TABLE 2

Adjusted AFR for February 2024

Period for Compounding

Semiannual

3.52%

2.99%

3.14%

646

Quarterly

3.50%

2.98%

3.13%

Monthly

4.59%

5.04%

5.50%

5.95%

3.91%

4.29%

4.68%

5.07%

5.84%

6.80%

4.10%

4.51%

4.92%

5.32%

Monthly

3.49%

2.97%

3.12%

Bulletin No. 2024–6

REV. RUL. 2024-03 TABLE 3

Rates Under Section 382 for February 2024

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.)

3.16%

3.81%

REV. RUL. 2024-03 TABLE 4

Appropriate Percentages Under Section 42(b)(1) for February 2024

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

7.95%

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

3.41%

REV. RUL. 2024-03 TABLE 5

Rate Under Section 7520 for February 2024

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

February 2024. See Rev. Rul. 2024-03, page 646.

Section 280G.—Golden

Parachute Payments

The applicable federal short-term, mid-term,

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

February 2024. See Rev. Rul. 2024-03, page 646.

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 February 2024. See

Rev. Rul. 2024-03, page 646.

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

February 2024. See Rev. Rul. 2024-03, page 646.

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 February 2024. See Rev. Rul.

2024-03, page 646.

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

February 2024. See Rev. Rul. 2024-03, page 646.

4.80%

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

February 2024. See Rev. Rul. 2024-03, page 646.

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 February 2024. See Rev. Rul. 2024-03, page 646.

Section 7520.—Valuation

Tables

The applicable federal mid-term rates are set

forth for the month of February 2024. See Rev. Rul.

2024-03, page 646.

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

February 2024. See Rev. Rul. 2024-03, page 646.

Bulletin No. 2024–6

647

February 5, 2024

26 CFR 411(d)-3; 26 CFR 417(e)-1

T.D. 9987

DEPARTMENT OF THE

TREASURY

Internal Revenue Service

26 CFR Part 1

Update to Minimum Present

Value Requirements for

Defined Benefit Plan

Distributions

AGENCY: Internal Revenue Service

(IRS), Treasury.

ACTION: Final regulations.

SUMMARY: This document sets forth

final regulations providing guidance relating to the minimum present value requirements applicable to certain defined benefit

pension plans. These regulations provide

guidance on changes made by the Pension

Protection Act of 2006 to the prescribed

interest rate and mortality table and other

guidance, including rules regarding the

treatment of preretirement mortality discounts and Social Security level income

options. These regulations affect participants, beneficiaries, sponsors, and administrators of defined benefit pension plans.

DATES: Effective date: These regulations

are effective on January 19, 2024.

Applicability date: These regulations generally apply to distributions with annuity

starting dates that occur on or after October 1, 2024.

FOR FURTHER INFORMATION

CONTACT: Diane S. Bloom or Linda S.

F. Marshall at (202) 317-6700 (not a tollfree number).

SUPPLEMENTARY INFORMATION:

Background

Section 401(a)(11) of the Internal Revenue Code (Code) provides rules that a

defined benefit plan must satisfy with

respect to a vested participant in order to

be a qualified plan under section 401(a).

Under those rules, except as provided

under section 417: (1) if the participant

survives to the annuity starting date, the

accrued benefit payable to the participant

must be provided in the form of a qualified joint and survivor annuity (QJSA);

and (2) if the participant dies before the

annuity starting date and has a surviving

spouse, the plan must provide a qualified

preretirement survivor annuity (QPSA) to

the surviving spouse.

Under section 417(e)(1), a plan may

provide that the present value of a QJSA

or a QPSA will be distributed immediately if that present value does not exceed

the amount that may be distributed without the participant’s consent under section 411(a)(11).1 Under section 417(e)(2),

if the present value of the QJSA or the

QPSA exceeds that amount, then a plan

may immediately distribute the present

value of the QJSA or the QPSA only if the

participant and the spouse of the participant (or, if the participant has died, the

surviving spouse) consent in writing to the

distribution.

Section 417(e)(3)(A) provides that the

present value of the QJSA or QPSA must

not be less than the present value calculated by using the applicable mortality

table and the applicable interest rate.2

Section 417(e)(3)(B), as amended by

section 302 of the Pension Protection Act

of 2006, Public Law 109-280, 120 Stat.

780 (PPA ’06), provides that the term

“applicable mortality table” means a mortality table, modified as appropriate by

the Secretary, based on the mortality table

specified for the plan year under section

430(h)(3)(A) of the Code (without regard

to section 430(h)(3)(C) or (D)).

Section 417(e)(3)(C), as amended by

section 302 of PPA ‘06, provides that the

term “applicable interest rate” means the

adjusted first, second, and third segment

rates applied under rules similar to the

rules of section 430(h)(2)(C) of the Code

for the month before the date of the distribution or such other time as the Secretary may prescribe by regulations. However, for purposes of section 417(e)(3),

these rates are determined without regard

to the segment rate stabilization rules of

section 430(h)(2)(C)(iv). In addition,

under section 417(e)(3)(D), these rates are

determined using the average yields for a

month, rather than the 24-month average

used under section 430(h)(2)(D).

Section 411(a)(13), as added by section

701(b) of PPA ‘06, provides that an “applicable defined benefit plan,” as defined by

section 411(a)(13)(C) of the Code, is not

treated as failing to meet the requirements

of section 417(e) with respect to accrued

benefits derived from employer contributions solely because the present value

of a participant’s accrued benefit (or any

portion thereof) may be, under the terms

of the plan, equal to the amount expressed

as the hypothetical account balance or as

an accumulated percentage of such participant’s final average compensation.

The Department of the Treasury (Treasury Department) and the IRS issued final

regulations under section 417 relating to

the QJSA and QPSA requirements in 1988

(53 FR 31854, August 22, 1988), and

amended those regulations in 1998 (63 FR

16898, April 3, 1998), to reflect changes

to section 417(e)(3) enacted by the Retirement Protection Act of 1994, Subtitle F of

Title VII of the Uruguay Round Agreements Act, Public Law 103-465, 108 Stat.

4809 (RPA ‘94). Section 1.417(e)-1 was

further amended in 2016 (81 FR 62359,

September 9, 2016) to permit defined

benefit plans to bifurcate a benefit that is

paid partly in the form of an annuity and

partly in a more accelerated form and to

apply the requirements of section 417(e)

(3) only to the accelerated portion of the

distribution. However, §1.417(e)-1 was

not updated at that time to reflect changes

made by PPA ‘06.

Under §1.417(e)-1(d)(1), a defined

benefit plan generally must provide that

the present value of any accrued benefit

and the amount (subject to sections 411(c)

(3) and 415) of any distribution, including a single sum, may not be less than the

amount calculated using the applicable

interest rate and the applicable mortality

table. In addition, under §1.417(e)-1(d)

(1), the present value of any optional form

of benefit may not be less than the pres-

Section 411(a)(11)(A) generally provides that if the present value of a participant’s nonforfeitable accrued benefit exceeds $7,000 ($5,000 for distributions made on or before December 31,

2023), then the benefit may not be distributed immediately without the participant’s consent.

Under section 411(a)(11)(B), the present value that is used to apply the rules of section 411(a)(11) is calculated using the rules of section 417(e)(3).

February 5, 2024

648

Bulletin No. 2024–6

ent value of the normal retirement benefit

determined in accordance with the preceding sentence.

Section 1.417(e)-1(d)(6) provides an

exception from the minimum present

value requirements of section 417(e) and

§1.417(e)-1(d) for certain distributions.

This exception applies to the amount of a

distribution paid in the form of an annual

benefit that either does not decrease during

the life of the participant (or, in the case

of a QPSA, the life of the participant’s

spouse), or that decreases during the life

of the participant merely because of (1)

the death of the survivor annuitant (but

only if the reduction is to a level not below

50 percent of the annual benefit payable

before the death of the survivor annuitant), or (2) the cessation or reduction of

Social Security supplements or qualified

disability benefits.

Section 1.401(a)-20 provides rules

regarding the survivor annuity requirements of sections 401(a)(11) and 417.

Section 1.401(a)-20, Q&A-16, provides

that, in the case of a married participant,

the QJSA must be at least as valuable as

any other optional form of benefit payable

under the plan at the same time. Section

1.401(a)-20, Q&A-16 does not specify a

particular actuarial basis for applying this

requirement; therefore, this requirement

may be satisfied using any set of reasonable actuarial assumptions. In addition,

§1.401(a)-20, Q&A-16 provides that a

plan does not fail to satisfy the at-leastas-valuable requirement merely because

the amount payable under an optional

form of benefit that is subject to the minimum present value requirement of section

417(e)(3) is calculated using the applicable interest rate (and, for periods when

required, the applicable mortality table)

under section 417(e)(3).

Under section 401(a)(7), a plan is not

a qualified plan unless the plan satisfies

the requirements of section 411. Section 411(d)(6)(A) provides that a plan is

treated as not satisfying the requirements

of section 411 if it is amended to reduce

accrued benefits (subject to certain exceptions). For this purpose, section 411(d)

(6)(B) provides that a plan amendment is

treated as impermissibly reducing accrued

benefits if it has the effect of eliminating

or reducing an early retirement benefit or

a retirement-type subsidy, or eliminating

an optional form of benefit, with respect to

benefits attributable to service before the

amendment. However, the last sentence

of section 411(d)(6)(B) provides that the

Secretary may by regulations provide

that section 411(d)(6)(B) does not apply

to a plan amendment that eliminates an

optional form of benefit (other than a plan

amendment that has the effect of eliminating or reducing an early retirement benefit

or a retirement-type subsidy).

Notice 2007-81, 2007-2 CB 899, provides guidance on the applicable interest

rate. Rev. Rul. 2007-67, 2007-2 CB 1047,

provides guidance on the applicable mortality table3 and the timing rules that apply

to the determination of the applicable

interest rate under section 417(e)(3)(C)

and the applicable mortality table under

section 417(e)(3)(B).

Sections 203(e), 204(g), and 205(g) of

the Employee Retirement Income Security Act of 1974, Public Law 93-406, 88

Stat. 829, as amended (ERISA), provide

rules that are parallel to Code sections

411(a)(11), 411(d)(6), and 417(e), respectively. Under section 101 of Reorganization Plan No. 4 of 1978, 5 U.S.C. App.,

as amended, the Secretary of the Treasury

has interpretive jurisdiction over the subject matter addressed in these regulations

for purposes of ERISA, as well as the

Code. Thus, these regulations apply for

purposes of the Code and the corresponding provisions of ERISA.

In West v. AK Steel Corporation Retirement Accumulation Pension Plan, 484

F.3d 395, 411 (6th Cir. 2007), cert. denied

555 U.S. 1097 (2009), the court held that a

preretirement mortality discount could not

be used in the computation of the present

value of a participant’s single-sum distribution under a cash balance plan if the

death benefit under the plan was equal in

value to the participant’s accrued benefit

under the plan. The court found that, if a

participant’s beneficiary is entitled to the

participant’s entire accrued benefit upon

the participant’s death before attainment

of normal retirement age, the use of a

mortality discount for the period before

normal retirement age would result in a

partial forfeiture of benefits in violation of

the ERISA vesting rules that correspond

to the rules of section 411(a). Id. See also

Berger v. Xerox Retirement Income Guaranty Plan, 231 F.Supp.2d 804, 814 (S.D.

Ill. 2002), modified and affirmed, 338

F.3d 755, 764 (7th Cir. 2003) (holding that

use of a preretirement mortality discount

was not warranted in determining participants’ normal retirement benefits payable

under plan); Crosby v. Bowater, Inc. Ret.

Plan, 212 F.R.D. 350, 362 (W.D. Mich.

2002), rev’d on other grounds, 382 F.3d

587 (6th Cir. 2004), cert. denied 544 U.S.

976 (2005) (holding that accrued benefits

include not only retirement benefits themselves, but also death benefits which are

directly related to the value of the retirement benefits); and McCutcheon v. Colgate-Palmolive Co., 62 F.4th 674 (2nd Cir.

2023) (holding that a preretirement mortality factor may not be applied to calculate

the value of a participant’s accrued benefit

previously distributed from a cash-balance plan for purposes of determining a

residual annuity). In Stewart v. AT&T Inc.,

354 Fed. App’x. 111, 118 (5th Cir. 2009),

however, the court held that a preretirement mortality discount was appropriately

applied to determine a single-sum distribution under a traditional defined benefit

plan. The court distinguished AK Steel and

Berger on the basis that the plans at issue

in those cases did not provide for a forfeiture of the accrued benefit on the death of

the participant before retirement, whereas

the plan at issue in Stewart provided for

such a forfeiture.

Proposed regulations that would update

the regulations under section 417(e) and

make certain clarifying changes were published in the Federal Register on November 25, 2016 (81 FR 85190). Comments

were received on the proposed regulations, and a public hearing was held on

March 7, 2017. After consideration of the

comments, the proposed regulations are

adopted by this Treasury decision with

certain changes described in the section

of this preamble entitled “Summary of

Notice 2008-85, 2008-2 CB 905, Notice 2013-49, 2013-32 IRB 127, Notice 2015-53, 2015-33 IRB 190, Notice 2016-50, 2016-38 IRB 371, Notice 2017-60, 2017-43 IRB 365, Notice 2018-2,

2018-2 IRB 281, Notice 2019-26, 2019-15 IRB 943, Notice 2019-67, 2019-52 IRB 1510, Notice 2020-85, 2020-51 IRB 1645, Notice 2022-22, 2022-20 IRB 1057, and Notice 2023-73, 2023-45

IRB 1232, set forth the section 417(e)(3) applicable mortality tables for 2009 through 2024.

Bulletin No. 2024–6

649

February 5, 2024

Comments and Explanation of Revisions.”

Summary of Comments and

Explanation of Revisions

1. Overview

These regulations amend the existing

regulations under section 417(e) regarding

the minimum present value requirements

of section 417(e)(3) in several respects.

Specifically, these regulations update

§1.417(e)-1 to reflect changes to sections

411(a) and 417(e) made by PPA ’06 and

to eliminate certain obsolete provisions.

These regulations also set forth other

updates and clarifying changes.

2. Updates to Reflect Statutory Changes

These regulations update the existing

regulations to reflect the statutory changes

made by PPA ’06, including the new interest rates and mortality tables set forth in

section 417(e)(3) and the exception from

the valuation rules for certain applicable

defined benefit plans set forth in section

411(a)(13). These regulations clarify that,

for purposes of section 417(e)(3), the

interest rates that are published by the

Commissioner are to be used without further adjustment. In addition, these regulations eliminate obsolete provisions relating to the transition from pre-1995 law to

the interest rates and mortality assumptions under section 417(e)(3) as modified

by RPA ’94.

3. Treatment of Preretirement Mortality

These regulations adopt the rules set

forth in the proposed regulations relating

to the treatment of preretirement mortality discounts in determining the minimum

present value of accrued benefits. Those

rules address the issue raised by AK Steel

and Berger of whether a plan that provides a death benefit equal in value to the

accrued benefit may apply a preretirement

mortality discount for the probability of

death when determining the amount of a

single-sum distribution.

Section 411(a) sets forth rules limiting the forfeiture of accrued benefits.

Under section 411(a)(1), an employee’s

rights in the accrued benefit derived from

employee contributions must be nonforfeitable. In addition, an employee’s

rights in the accrued benefit derived from

employer contributions must become nonforfeitable at least as quickly as under

one of the vesting schedules specified in

section 411(a)(2). Section 411(a)(3)(A)

provides that a right to an accrued benefit derived from employer contributions

is not treated as forfeitable solely because

the plan provides that it is not payable if

the participant dies.

Section 411(a)(7)(A)(i) defines a participant’s accrued benefit under a defined

benefit plan as the employee’s accrued

benefit determined under the plan and,

except as provided in section 411(c)(3),

expressed in the form of an annual benefit commencing at normal retirement age.

Section 1.411(a)-7(a)(1) provides that the

term “accrued benefit” refers only to pension or retirement benefits. Consequently,

accrued benefits do not include ancillary

benefits not directly related to retirement

benefits, such as incidental death benefits.

A death benefit under a defined benefit plan that is payable if the participant

dies before attaining normal retirement

age and before benefits commence is not

part of the participant’s accrued benefit

within the meaning of section 411(a)(7)

and, accordingly, the nonforfeiture rules

of section 411(a) do not apply to this type

of death benefit. This is the case even

if the amount of the death benefit is the

same as the amount the participant would

have received if, instead of dying, the participant had separated from service and

elected to receive an immediate distribution. Moreover, such an ancillary death

benefit can be eliminated by plan amendment without violating the anti-cutback

rule of section 411(d)(6).

Consistent with this analysis, section

417(e) does not require ancillary death

benefits (that is, a death benefit that is not

part of the accrued benefit) to be taken

into account in the calculation of the

minimum present value of the accrued

benefit. Accordingly, under the proposed

regulations, the probability of death under

the applicable mortality table generally is

taken into account for purposes of determining the minimum amount of a lump

sum distribution under the plan that is

equal to the present value of the accrued

benefit (or the optional form of benefit, if

applicable) under section 417(e)(3), and

that minimum amount is not required to

include the present value of the death benefits provided under the plan (other than

a death benefit that is part of the accrued

benefit or part of the optional form of

benefit for which present value is determined). Commenters generally supported

this rule in the proposed regulations, and

it is included in the final regulations at

§1.417(e)-1(d)(2)(ii)(A).4

Some commenters raised an issue

regarding the effect of the rule on plan

designs under which the probability of

death is not taken into account in determining the amount of a single-sum distribution because the plan provides a death

benefit equal in value to the present value

of the accrued benefit.5 These commenters

expressed concern that this type of plan

design might violate the requirement of

§1.401(a)-20, Q&A-16, that, for a married participant, the QJSA must be at least

as valuable as any other optional form of

benefit payable under the plan at the same

time, and would not be eligible for the

exception that applies to an optional form

of benefit that is calculated in accordance

with the requirements of section 417(e)

(3) (because disregarding the probability

of death before normal retirement age in

calculating the amount of a distribution in

an optional form of benefit to which section 417(e)(3) applies would increase the

present value of that distribution above

the minimum present value required under

section 417(e)(3)).

The Treasury Department and the

IRS did not intend for the rule requiring

Neither the proposed regulations nor these regulations address the applicability of a preretirement mortality adjustment in determining the actuarial equivalent of a past distribution for purposes of offsetting that actuarial equivalent against future distributions. But see McCutcheon, which concerned the application of a preretirement mortality adjustment to calculate the actuarial equivalent of previously distributed benefits for purposes of determining whether the plan’s calculation of a residual annuity resulted in the forfeiture of a participant’s accrued benefit.

These commenters noted that disregarding the probability of death in these circumstances generates the same present value as is generated by taking into account the probability of death

and including the value of the death benefit in the single-sum distribution.

February 5, 2024

650

Bulletin No. 2024–6

the probability of death to be taken into

account for purposes of determining minimum present value to prohibit this plan

design. Accordingly, these regulations

expand eligibility for the exception to the

rule under §1.401(a)-20, Q&A-16, for certain optional forms of benefit. The existing exception under §1.401(a)-20, Q&A16, applies to an optional form of benefit

that is subject to the requirements of section 417(e)(3) and is calculated using the

applicable interest rate and the applicable

mortality table. Under the expanded eligibility for that exception provided for in

§1.417(e)-1(d)(2)(ii)(C)(1), the amount

payable under an optional form of benefit

is treated as calculated using the applicable interest rate and applicable mortality

table under section 417(e)(3) (and therefore is eligible for this exception) even if

the amount payable is calculated taking

into account both the probability of death

before retirement and any death benefit

under the plan.

These regulations also adopt the rule

under the proposed regulations under

which, for purposes of determining the

present value under section 417(e)(3) with

respect to the portion of the accrued benefit derived from employee contributions

(the employee-provided accrued benefit)

that is computed in accordance with the

rules of section 411(c)(2), the probability

of death before the assumed commencement date may not be taken into account.

This rule is different from the rule that

applies to the portion of the accrued benefit derived from employer contributions

(the employer-provided accrued benefit) because an employee’s rights in the

employee-provided accrued benefit are

nonforfeitable under section 411(a)(1),

and the exception for death under section 411(a)(3)(A) to the nonforfeitability

of the employer-provided accrued benefit

does not apply to the employee-provided

accrued benefit.

These regulations include an example

to illustrate the application of the minimum present value requirements of section 417(e)(3) in the case of a single-sum

distribution of a participant’s entire

accrued benefit that consists of both the

employee-provided accrued benefit and

the employer-provided accrued benefit.

Consistent with the rules in these regulations, the example illustrates that a single-sum distribution of the participant’s

entire accrued benefit in this case must

be no less than the sum of the minimum

present value of the employee-provided

accrued benefit, determined under section

417(e)(3) (applying the special rules set

forth in the preceding paragraph), and the

minimum present value of the employer-provided accrued benefit, determined

under section 417(e)(3).

Note that Rev. Rul. 89-60, 1989-1

CB 113 (as corrected by Announcement

89-65, 1989-21 IRB 33), provides that it

is sufficient for a single-sum distribution

to equal the greater of: (1) the minimum

present value of the employee-provided

accrued benefit (determined using the

actuarial assumptions specified in section

411(c)(2) and Rev. Rul. 76-47, 1976-1

CB 109, taking into account the principle

illustrated in Rev. Rul. 78-202, 1978-1 CB

124), and (2) the minimum present value

of the participant’s entire accrued benefit using plan assumptions subject to the

interest rate limitation of section 417(e).

The determination under Rev. Rul. 89-60

of these minimum present values does

not reflect the specification in 1994 of a

mortality assumption in section 417(e)(3)

(B).6 Several commenters noted that some

plan sponsors, in the absence of updated

guidance following the 1994 amendment

to section 417(e), have applied a preretirement mortality discount to both the

employer-provided and employee-provided portions of the accrued benefit.

These regulations modify and supersede

the guidance in Rev. Rul. 89-60 to the

extent the revenue ruling is inconsistent

with these regulations.

Several commenters raised concerns

that the prohibition on taking preretirement mortality into account in determining the present value of the employee-provided accrued benefit would require a

redetermination of a participant’s remaining accrued benefit if the participant had

received a partial distribution in the past.

As discussed in the “Applicability Dates”

section of this preamble, these regulations

do not change the results of calculations

that were made in accordance with the

rules that applied before the applicability

date of these regulations. Therefore, the

regulations would not require the redetermination of a participant’s remaining

accrued benefit in such a case.

One commenter observed that some

employers would prefer not to use different factors for the employer-provided

portion of a benefit and the employee-provided portion of a benefit (and accordingly

would like to determine the full amount of

a single-sum distribution using the factor

required to be used for the employee-provided portion of the benefit). A single-sum

distribution determined in this manner

would be greater than the minimum single-sum distribution that would satisfy

section 417(e)(3) (and therefore would not

be eligible for the exception to the requirement under §1.401(a)-20, Q&A-16). To

address this concern, these regulations

provide a second expansion of eligibility

to use that exception. Under this rule (at

§1.417(e)-1(d)(2)(ii)(C)(2)), the amount

payable under an optional form of benefit

is treated as calculated using the applicable

interest rate and applicable mortality table

under section 417(e)(3) (and therefore is

eligible for the exception to §1.401(a)20, Q&A-16), even if, under the plan, the

present value factor used for the employer-provided portion of the benefit is the

present value factor that is required to be

used for the employee-provided portion of

the benefit (that is, a present value factor

that does not take into account preretirement mortality).

Some commenters raised concerns

about the implications of the rule that the

probability of death is taken into account

in determining minimum present value

for distributions commencing after normal retirement age. Section 1.417(e)-1(d)

(1)(i)(A) provides that, for a distribution

commencing after normal retirement age,

the minimum present value under section 417(e)(3) is determined based on the

immediate annuity rather than the accrued

benefit payable as of normal retirement

age. However, the extent to which the

probability of death is taken into account

in determining the annuity commencing

after normal retirement age that is actu-

See section 767 of RPA ’94.

Bulletin No. 2024–6

651

February 5, 2024

arially equivalent to the accrued benefit

commencing at normal retirement age is

an issue that arises under section 411(a),

rather than under section 417(e)(3), and

is expected to be addressed in future proposed regulations under section 411(a).7

4. Social Security Level Income Options

The proposed regulations address the

applicability of the minimum present

value requirements of section 417(e)(3)

to a Social Security level income option

(SSLIO). An SSLIO is an optional form

of benefit (within the meaning of section

411(d)(6)(B) and §1.411(d)-3(g)(6)(ii))

under which a participant’s accrued benefit is paid in the form of an annuity for

the life of the participant, with additional

temporary annuity payments in earlier

years, before an assumed Social Security

commencement age, to provide the participant with approximately level retirement

income when the estimated Social Security payments are taken into account.

As noted in the Background section

of this preamble, §1.417(e)-1(d)(6) provides that the minimum present value

requirements of section 417(e)(3) do not

apply to the amount of a distribution paid

in the form of an annual benefit that does

not decrease during the life of the participant, or that decreases during the life

of the participant merely because of the

death of the survivor annuitant or the cessation or reduction of Social Security supplements or qualified disability benefits.

A Social Security supplement is defined

in §1.411(a)-7(c)(4) as a benefit for plan

participants that both commences and terminates before the age when participants

are entitled to old-age insurance benefits,

unreduced on account of age, under title II

of the Social Security Act (42 USC Chapter 7, subchapter II), as amended, and does

not exceed those old-age insurance benefits. A Social Security supplement (other

than a QSUPP as defined in §1.401(a)

(4)-12) is an ancillary benefit within the

meaning of §1.411(d)-3(g)(2) that is not a

section 411(d)(6) protected benefit.

Because the periodic payments under

an SSLIO decrease during the lifetime of

the participant and the decrease is not the

result of the cessation of an ancillary Social

Security supplement, §1.417(e)-1(d)(6)

does not provide an exception from the

minimum present value requirements of

section 417(e)(3) for this form of benefit. The proposed regulations included an

example illustrating the application of the

minimum present value requirements of

section 417(e)(3) to an SSLIO. Commenters expressed a variety of views regarding

this example. One commenter stated that

it is reasonable to apply the minimum

present value requirements to an SSLIO,

while another commenter maintained that

the minimum present value requirements

should not apply to any optional forms

of benefit other than a single-sum distribution. Some commenters suggested that

the minimum present value requirements

should apply only to the determination of

the temporary annuity payments under an

SSLIO and that the implicit bifurcation

rule of §1.417(e)-1(d)(7)(ii)(B) should

be expanded to permit bifurcation of that

option into a temporary annuity portion

and a remaining accrued benefit.

The Treasury Department and the IRS

believe that it is appropriate to apply the

rules of section 417(e)(3) to an SSLIO

because, when a participant’s lifetime

benefit is paid in that form, a portion of

those benefits (which may be a substantial portion of the participant’s lifetime

benefits) is accelerated and paid over a

short period of time (that is, until assumed

Social Security retirement age). Nevertheless, the Treasury Department and the

IRS agree with those commenters who

suggested that it is appropriate to permit a plan to satisfy section 417(e)(3) by

implicitly bifurcating the participant’s

benefit payable in the form of an SSLIO

into a temporary annuity portion and a

remaining annuity benefit. As a result, the

regulations include a new implicit bifurcation rule for an SSLIO at §1.417(e)-1(d)

(7)(ii)(C).

Under the new implicit bifurcation

rule, the plan satisfies the minimum present value requirements of section 417(e)

(3) with respect to the temporary annuity

portion of an SSLIO if the plan satisfies

two minimum requirements with respect

to the remaining annuity benefit. First,

the remaining accrued benefit expressed

in the normal form and payable at normal

retirement age (or current age, if later)

must be at least as great as it would be

if an annuity payable in that form and

commencing at that age that is actuarially equivalent to the temporary annuity

(determined using the applicable section

417(e)(3) assumptions) were subtracted

from the participant’s accrued benefit.

Second, the remaining immediate annuity

expressed in the normal form must be at

least as great as it would be if an immediate annuity payable in that form that is

actuarially equivalent to the temporary

annuity (determined using the applicable

section 417(e)(3) assumptions) were subtracted from the immediate annuity. The

regulations include an example illustrating

the application of the minimum present

value requirements of section 417(e)(3)

to an SSLIO and an example to illustrate

the application of the new implicit bifurcation rule to an SSLIO. A plan amendment that provides for implicit bifurcation

of an SSLIO in accordance with this new

rule must comply with the requirements of

section 411(d)(6).

5. Section 411(d)(6) Relief for Changes in

Lookback Months and Stability Periods

for Mortality Table and Interest Rate

The proposed regulations retained

the rules providing relief under section

411(d)(6) for a plan amendment that

The preamble to the proposed regulations requested comments on the issue of whether, in the case of a plan that provides a subsidized annuity payable upon early retirement and determines

a single-sum distribution as the present value of the early retirement annuity, the present-value determination should be required to be calculated using the applicable interest rate and the

applicable mortality table applied to the early retirement annuity. See Rybarczyk v. TRW, 235 F.3d 975, 983 (6th Cir. 2000) (an early retirement single-sum distribution option that was

determined based on the early retirement annuity was not required to be calculated using the section 417(e) factors, provided that the lump sum was at least as great as the present value of

the deferred annuity determined using the section 417(e) factors); but see Costantino v. TRW, 13 F.3d 969, 979 (6th Cir. 1994) (benefit distributions must comply with the valuation rule of

§1.411(a)-11(a)(2)). A number of comments were received on this issue, many of which noted that the topic is also addressed in §1.411(a)-11(a)(2). These comments will be considered in

connection with the development of proposed regulations under section 411(a), rather than in these regulations under section 417(e).

February 5, 2024

652

Bulletin No. 2024–6

changes lookback months or stability

periods for the applicable mortality table

and applicable interest rate under section 417(e)(3). Under these rules, such

a plan amendment does not violate section 411(d)(6) provided that, for a specified period, the participant is entitled

to the greater of the benefits under the

pre- and post-amendment timing rules.

Commenters asked that this relief under

section 411(d)(6) be expanded to apply

to amendments that change the time for

determining an interest rate or mortality

table that is used for any purpose. Commenters observed that, given the requirement to use the more participant-favorable of the two sets of assumptions for a

specified period, expanding this rule cannot be used to manipulate assumptions in

the plan sponsor’s favor.

In response, these regulations expand

the rule previously set forth in the regulations under section 417(e) by adopting

a comparable rule under section 411(d)

(6), which is set forth in §1.411(d)-3(a),

that applies to amendments that change

the time for determining an interest

rate or mortality table that is used for

any purpose. Under these regulations, a

defined benefit plan may be amended by

an amendment that is adopted on or after

January 19, 2024 to change the stability

period from one stability period permitted under §1.417(e)-1(d)(4)(ii) to a different permitted stability period, or to

change the lookback month described in

§1.417(e)-1(d)(4)(iii) from one permitted

lookback month to a different permitted

lookback month (including an indirect

change to the stability period or lookback

month as a result of a change in plan year).

Such an amendment may be made with

respect to any plan provision under which

an interest rate or mortality table is specified by reference to a stability period or a

lookback month, provided that the amount

of any distribution for which the annuity

starting date occurs on or after the effective date of the amendment and before the

end of the one year period commencing

on the applicable amendment date for the

amendment is determined using the more

participant-favorable of the two sets of

assumptions.

For an amendment that changes the

time for determining an interest rate or

Bulletin No. 2024–6

mortality table that is used for a purpose

other than the minimum present value

rules of section 417(e)(3), and that is

adopted before January 19, 2024, whether

an impermissible cutback under section

411(d)(6) has occurred is based on applicable law on the date the amendment

is adopted. Thus, for example, if a plan

amendment adopted before January 19,

2024 was permitted under §1.417(e)-1(d)

(10)(ii) as in effect before the amendments

made by these regulations, no violation of

section 411(d)(6) will have occurred as a

result of that plan amendment.

Commenters requested that relief from

the anti-cutback rules of section 411(d)

(6) be provided in additional situations.

These situations involve plans that have

been applying section 417(e) to determine

the amount of a benefit but could satisfy

section 417(e) using a less generous benefit calculation than is permitted under

these regulations, such as the application

of a preretirement mortality discount or

the implicit bifurcation of a benefit paid

in the form of an SSLIO. Commenters

requested section 411(d)(6) relief for such

a plan so that the plan could be amended

to apply the less generous benefit calculation to benefits already accrued. The final

regulations do not provide the requested

section 411(d)(6) relief but instead provide the relief under §1.401(a)-20, Q&A16 described earlier in this Summary of

Comments and Explanation of Provisions.

6. Applicability Dates

The changes to the regulations under

section 417(e)(3) apply to distributions

with annuity starting dates occurring on or

after October 1, 2024, except as otherwise

provided. For earlier distributions, the

rules of §1.417(e)-1(d) as set forth in 26

CFR part 1, revised as of April 1, 2023,

apply (taking into account any statutory

changes and guidance of general applicability relating to those statutory changes),

except that taxpayers may instead apply

the rules of this Treasury decision. For

example, if, before October 1, 2024, a participant received a payment equal to the

present value of the participant’s employee-provided benefit determined in accordance with the valuation rules of section

417(e)(3) and §1.417(e)-1(d) that applied

653

at the time of the distribution, then the

determination of the participant’s remaining accrued benefit is not affected by any

differences between those rules and the

rules in this Treasury decision (unless the

taxpayer chooses to apply the applicable

rules of this Treasury decision).

The amendments to §1.411(d)-3(a)

apply to plan amendments adopted on or

after January 19, 2024.

Special Analyses

1. Regulatory Planning and Review –

Economic Analysis

Pursuant to the Memorandum of

Agreement, Review of Treasury Regulations under Executive Order 12866 (June

9, 2023), tax regulatory actions issued by

the IRS are not subject to the requirements

of section 6 of Executive Order 12866, as

amended. Therefore, a regulatory impact

assessment is not required.

2. Regulatory Flexibility Act

It is hereby certified that these regulations will not have a significant economic impact on a substantial number of

small entities pursuant to the Regulatory

Flexibility Act (5 U.S.C. chapter 6). This

certification is based on the fact that the

regulations reflect the statutory changes

to section 417(e) made by PPA ’06 and

also provide additional flexibility in plan

design. Specifically, the regulations reflect

the statute in a manner that (i) is consistent

with the statutory language, (ii) provides

certain clarifications, and (iii) eases and

facilitates plan administration. Although

the regulations might affect a substantial number of individuals, the economic

impact of the regulations on small businesses is not expected to be significant.

For example, while the regulations clarify

the application of the minimum present

value requirements of section 417(e) to an

SSLIO, most defined benefit plans sponsored by small employers do not include

an SSLIO. Moreover, for those plans that

do provide for SSLIOs, the regulations

provide flexibility in the application of the

minimum present value requirements by

permitting the implicit bifurcation of the

SSLIO into a temporary annuity (required

February 5, 2024

to be determined using the minimum present value factors under section 417(e)

(3)) and a life annuity (to which the minimum present value requirements do not

apply). These regulations are not expected

to result in any economically meaningful

changes in behavior by small employers

that sponsor defined benefit plans.

For the reasons stated, a regulatory

flexibility analysis under the Regulatory

Flexibility Act is not required. Pursuant

to section 7805(f), the notice of proposed

rulemaking preceding these regulations

was submitted to the Chief Counsel for

Advocacy of the Small Business Administration for comment on their impact on

small business, and no comments were

received.

3. Unfunded Mandates Reform Act

Section 202 of the Unfunded Mandates

Reform Act of 1995 requires that agencies

assess anticipated costs and benefits and

take certain other actions before issuing a

final rule that includes any Federal mandate that may result in expenditures in any

one year by a State, local, or Tribal government, in the aggregate, or by the private sector, of $100 million in 1995 dollars, updated annually for inflation. These

regulations do not include any Federal

mandate that may result in expenditures

by State, local, or Tribal governments,

or by the private sector in excess of that

threshold.

4. Executive Order 13132 (Federalism)

Executive Order 13132 (Federalism)

prohibits an agency from publishing any

rule that has federalism implications if

the rule either imposes substantial, direct

compliance costs on State and local governments, and is not required by statute,

or preempts State law, unless the agency

meets the consultation and funding

requirements of section 6 of the Executive

order. These regulations do not have federalism implications, impose substantial

direct compliance costs on State and local

governments, or preempt State law within

the meaning of the Executive order.

February 5, 2024

5. Congressional Review Act

Pursuant to the Congressional Review

Act (5 U.S.C. 801 et seq.), the Office of

Information and Regulatory Affairs designated this rule as not a major rule, as

defined by 5 U.S.C. 804(2).

Statement of Availability of IRS

Documents

IRS Revenue Rulings, Revenue Procedures, and Notices cited in this document

are published in the Internal Revenue

Bulletin (or Cumulative Bulletin) and are

available from the Superintendent of Documents, U.S. Government Printing Office,

Washington, DC 20402, or by visiting the

IRS website at www.irs.gov.

Drafting Information

The principal authors of these regulations are Diane S. Bloom and Linda S. F.

Marshall, Office of Associate Chief Counsel (Employee Benefits, Exempt Organizations, and Employment Taxes). However, other personnel from the IRS and the

Treasury Department participated in the

development of these regulations.

List of Subjects in 26 CFR Part 1

Income taxes, Reporting and recordkeeping requirements.

Adoption of Amendments to the

Regulations

Accordingly, the Treasury Department

and the IRS amend 26 CFR part 1 as follows:

PART 1—INCOME TAXES

Paragraph 1. The authority citation

for part 1 continues to read, in part, as follows:

Authority: 26 U.S.C. 7805 * * *

Par. 2. Section 1.411(d)-3 is amended

by redesignating paragraph (a)(4) as paragraph (a)(5) and adding a new paragraph

(a)(4) to read as follows:

654

§ 1.411(d)-3 Section 411(d)(6) protected

benefits.

(a) * * *

(4) Changes in lookback months and

stability periods for mortality table and

interest rate. Subject to the rules of this

paragraph (a)(4), a defined benefit plan

may be amended by an amendment that

is adopted on or after January 19, 2024

to change the stability period described

in §1.417(e)-1(d)(4)(ii) from one stability period to a different stability period or

to change the lookback month described

in §1.417(e)-1(d)(4)(iii) from one lookback month to a different lookback month

(including an indirect change to the stability period or lookback month as a result of

a change in plan year). The amendments

described in this paragraph (a)(4) may be

made with respect to any plan provision

under which an interest rate or mortality

table is specified by reference to a stability period or a lookback month, provided

that any distribution for which the annuity

starting date occurs on or after the effective date of the amendment and before the

end of the one-year period commencing

on the applicable amendment date for the

amendment is equal to the greater of—

(i) The amount determined using the

pre-amendment stability period and lookback month; and

(ii) The amount determined using the

post-amendment stability period and lookback month.

*****

Par. 3. Section 1.417(e)-1 is amended

by:

a. Revising paragraphs (d)(1)(i) and (d)

(2) through (4) and (6);

b. Adding paragraphs (d)(7)(ii)(C) and

(D);

c. In paragraph (d)(7)(v), redesignating

Examples 1 through 7 as paragraphs (d)

(7)(v)(A) through (G), respectively;

d. In newly designated paragraphs (d)

(7)(v)(A) through (G), redesignating the

paragraphs in the first column as the paragraphs in the second column:

Bulletin No. 2024–6

Newly redesignated paragraphs

(d)(7)(v)(A)(i) through (iv)

(d)(7)(v)(B)(i) through (v)

(d)(7)(v)(C)(i) through (iv)

(d)(7)(v)(D)(i) and (ii)

Further redesignated as paragraphs

(d)(7)(v)(A)(1) through (4)

(d)(7)(v)(B)(1) through (5)

(d)(7)(v)(C)(1) through (4)

(d)(7)(v)(D)(1) and (2)

(d)(7)(v)(E)(i) through (iv)

(d)(7)(v)(F)(i) through (iv)

(d)(7)(v)(G)(i) through (iii)

(d)(7)(v)(E)(1) through (4)

(d)(7)(v)(F)(1) through (4)

(d)(7)(v)(G)(1) through (3)

e. In newly designated paragraph (d)(7)

(v)(C)(1), removing the language “Example 2 of this paragraph (d)(7)(v)” and

adding the language “paragraph (d)(7)(v)

(B)(1) of this section (Example 2)” in its

place;

f. In newly designated paragraph (d)(7)

(v)(E)(1), removing the language “Example 4 of this paragraph (d)(7)(v)” and

adding the language “paragraph (d)(7)(v)

(D)(1) of this section (Example 4)” in its

place;

g. In newly designated paragraph (d)

(7)(v)(E)(2), removing the language

“Example 4 of this paragraph (d)(7)(v)”

and adding the language “paragraph (d)

(7)(v)(D)(1) of this section (Example 4)”

in its place;

h. Adding paragraph (d)(7)(v)(H);

i. Adding paragraph (d)(8)(vi);

j. Revising paragraph (d)(9); and

k. Removing paragraph (d)(10).

The revisions and additions read as follows:

§ 1.417(e)-1 Restrictions and valuations

of distributions from plans subject to

sections 401(a)(11) and 417.

*****

(d) * * *

(1) * * *

(i) Defined benefit plans—(A) In

general. A defined benefit plan must

provide that the present value of any

accrued benefit and the amount (subject to sections 411(c)(3) and 415) of

any distribution, including a single-sum

distribution, must not be less than the

amount calculated using the applicable

mortality table described in paragraph

(d)(2) of this section and the applicable

interest rate described in paragraph (d)

(3) of this section, as determined for the

month described in paragraph (d)(4) of

Bulletin No. 2024–6

this section. In the case of an optional

form of benefit payable before normal

retirement age, the present value of the

optional form determined in accordance

with the preceding sentence may not be

less than the present value of the accrued

benefit payable at normal retirement age.

In the case of an optional form of benefit payable on or after normal retirement

age, the present value of the optional

form determined in accordance with the

first sentence of this paragraph (d)(1)

(i)(A) may not be less than the present

value of the immediate annuity (payable

in the same form as the accrued benefit is

expressed). The present value determined

under this paragraph (d) also applies for

purposes of determining whether consent

for a distribution is required under paragraph (b) of this section.

(B) Payment of a portion of a participant’s benefit. The rules of this paragraph

(d)(1) apply with respect to a payment of

only a portion of the accrued benefit in the

same manner as these rules would apply

to a distribution of the entire accrued benefit. See paragraph (d)(7) of this section

for rules relating to such a bifurcation of a

participant’s accrued benefit.

benefit plans. See section 411(a)(13) and

§1.411(a)(13)-1 for an exception from the

rules of section 417(e)(3) and this paragraph (d) that applies to certain distributions from plans with lump sum-based

benefit formulas.

*****

(2) Applicable mortality table—(i) In

general. The applicable mortality table for

a calendar year is the mortality table that is

prescribed by the Commissioner in guidance published in the Internal Revenue

Bulletin. See §601.601(d) of this chapter.

This mortality table is to be based on the

table specified under section 430(h)(3)

655

(A), but without regard to section 430(h)

(3)(C) or (D).

(ii) Mortality discounts—(A) In general. Except as provided in paragraph (d)

(2)(ii)(B) of this section, the probability

of death under the applicable mortality

table is taken into account for purposes of

determining the present value under this

paragraph (d) without regard to the death

benefits provided under the plan (other

than a death benefit that is part of the

normal form of benefit or part of another

optional form of benefit, as described in

§1.411(d)-3(g)(6)(ii)(B), for which present value is determined).

(B) Special rule for employee-provided

benefit. For purposes of determining the

present value under this paragraph (d)

with respect to the portion of the accrued

benefit derived from employee contributions (that is determined in accordance

with the rules of section 411(c)), the probability of death during the assumed deferral period, if any, is not taken into account.

For purposes of the preceding sentence,

the assumed deferral period is the period

between the date of the present value

determination and the assumed commencement date for the annuity attributable to the accrued benefit derived from

employee contributions.

QJSA be most valuable form of benefit.

An optional form of benefit that is subject

to the minimum present value requirement

of this section is not treated as failing the

requirement under §1.401(a)-20, Q&A16, that an optional form of benefit for

a married participant may not be more

valuable than the qualified joint and survivor annuity payable at the same time

merely because, in applying the rules of

this section in determining the amount of

the optional form of benefit, the amount

payable is calculated—

February 5, 2024

(1) Taking into account both the probability of death before retirement and any

death benefit under the plan, or

(2) Using the present value factor for

the employee-provided portion of the benefit determined under paragraph (d)(2)(ii)

(B) of this section as the present value factor for the employer-provided portion of

the benefit.

(3) Applicable interest rate—(i) In

general. The applicable interest rate for

a month is determined using the first,

second, and third segment rates for that

month under section 430(h)(2)(C), as

modified pursuant to section 417(e)(3)

(D) (and without regard to the segment

rate stabilization rules of section 430(h)

(2)(C)(iv)). These section 417(e) segment

rates are specified by the Commissioner in

revenue rulings, notices, or other guidance

published in the Internal Revenue Bulletin

and are applied under rules similar to the

rules under §1.430(h)(2)-1(b). Thus, for

example, in determining the present value

of a straight life annuity, the first segment

rate is applied with respect to payments

expected to be made during the 5-year

period beginning on the annuity starting

date, the second segment rate is applied

with respect to payments expected to be

made during the 15-year period following the end of that 5-year period, and the

third segment rate is applied with respect

to payments expected to be made after the

end of that 15-year period. The section

417(e) segment rates that are published by

the Commissioner are to be used for this

purpose without further adjustment.

(ii) Examples. The following examples

illustrate the rules of paragraphs (d)(2)

and (d)(3)(i) of this section:

(A) Example 1—(1) Facts. Plan A is a non-contributory defined benefit plan with a calendar-year

plan year. The normal retirement age is 65, and all

participant elections are made with proper spousal

consent. Plan A includes an optional form of benefit

that provides a single-sum distribution equal to the

present value of the participant’s accrued benefit.

Plan A provides that the applicable interest rate for

any distribution is determined using the segment

rates as specified by the Commissioner for the month

preceding the month containing the annuity starting

date of the distribution. The applicable mortality

table is the table specified by the Commissioner for

the calendar year that contains the annuity starting

date.

(2) Analysis of minimum amount of single-sum

distribution. Participant P retires in November 2024

at age 60 and elects (with spousal consent) to receive

a single-sum distribution. P has an accrued benefit

February 5, 2024

of $2,000 per month payable as a life annuity beginning at the plan’s normal retirement age of 65. The

applicable mortality rates for 2024 apply. For purposes of this paragraph (d)(3)(ii)(A) (Example 1), the

section 417(e) segment rates published by the Commissioner for October 2024 are assumed to be 3.00

percent, 4.00 percent, and 5.00 percent for the first,

second, and third segment rates, respectively. The

present value factor for a participant, age 60, for a

deferred annuity payable at age 65, calculated based

on these interest rates and the applicable mortality

table for 2024, is 10.432. To satisfy the requirements

of section 417(e)(3) and this paragraph (d), the single-sum distribution received by P cannot be less

than $250,368 (that is, $2,000 x 12 x 10.432).

(B) Example 2—(1) Facts. The facts are the

same as in paragraph (d)(3)(ii)(A)(1) of this section

(Example 1), except that Plan A provides for mandatory employee contributions. Participant Q retires in

November 2024 at age 60 and elects (with spousal

consent) to receive a single-sum distribution of Q’s

entire accrued benefit. Q has an accrued benefit of

$2,000 per month payable as a life annuity beginning at Plan A’s normal retirement age of 65, consisting of an accrued benefit derived from employee

contributions determined in accordance with section

411(c)(2) (Q’s employee-provided accrued benefit)

of $500 per month and an accrued benefit derived

from employer contributions (Q’s employer-provided accrued benefit) of $1,500 per month.

(2) Analysis of minimum amount of the employee-provided portion of the single-sum distribution.

Pursuant to paragraph (d)(2)(ii)(B) of this section,

the single-sum distribution used to settle Q’s employee-provided accrued benefit may not be less than the

present value of the employee-provided portion of

Q’s accrued benefit determined using the applicable

interest and mortality rates described in paragraphs

(d)(2)(i) and (d)(3)(i) of this section, but without

taking into account the probability of death during

the assumed deferral period in accordance with paragraph (d)(2)(ii)(B) of this section. The present value

factor for a participant, age 60, for a deferred annuity

payable at age 65, calculated based on the interest

and mortality rates specified in paragraph (d)(3)(ii)

(A) of this section (Example 1), taking the probability of death only after age 65 into account, is 10.704.

To satisfy the requirement of section 417(e)(3)

and this paragraph (d), the single-sum distribution

received by Q with respect to the employee-provided

portion of the accrued benefit may not be less than

$64,224 (that is, $500 x 12 x 10.704).

(3) Analysis of minimum amount of the employer-provided portion of the single-sum distribution.

The single-sum distribution made to settle Q’s

employer-provided accrued benefit may not be less

than the present value of that portion of Q’s accrued

benefit determined using the applicable interest

and mortality rates. However, for this purpose,

Plan A is permitted to take into account the probability of death during the assumed deferral period

in accordance with paragraph (d)(2)(ii)(A) of this

section. The single-sum distribution received by Q

with respect to the employer-provided portion of the

accrued benefit may not be less than $187,776 (that

is, $1,500 x 12 x 10.432).

(4) Analysis of minimum amount of the total single-sum distribution. To satisfy the requirements of

656

section 417(e)(3) and this paragraph (d), the total

single-sum distribution received by Q may not be

less than the sum of the minimum single-sum distribution with respect to the employee-provided and

employer-provided portions of the accrued benefit,

or $252,000 ($64,224 + $187,776).

(5) Analysis of minimum amount of partial single-sum distribution. If Q were to receive a partial

single-sum distribution (that is, a single-sum distribution that is less than $252,000) with the balance

payable as an annuity, then, in accordance with

paragraph (d)(7)(iii)(D) of this section, the plan

must specify the portion of the participant’s accrued

benefit that is settled by that distribution of the partial single-sum distribution (unless the plan uses the

same single-sum factor with respect to all portions of

the accrued benefit). Because the present value factor

for the employee-provided benefit cannot take into

account the probability of death before age 65, the

plan may use the same present value factor to determine the portion of the accrued benefit that is settled

by the single-sum distribution that applies to both

the employee-provided and the employer-provided

portions of the accrued benefit only if the factor that

is used does not take into account the probability of

death before age 65.

(4) Time for determining interest rate

and mortality table—(i) Interest rate

general rule. Except as provided in paragraphs (d)(4)(v) or (vi) of this section, the

applicable interest rate to be used for a

distribution is the applicable interest rate

determined under paragraph (d)(3) of

this section for the applicable lookback

month. The applicable lookback month

for a distribution is the lookback month

(as described in paragraph (d)(4)(iv) of

this section) for the stability period (as

described in paragraph (d)(4)(iii) of this

section) that contains the annuity starting date for the distribution. The time and

method for determining the applicable

interest rate for each participant’s distribution must be determined in a consistent

manner that is applied uniformly to all

participants in the plan.

(ii) Mortality table general rule. The

applicable mortality table to be used for

a distribution is the mortality table that

is described in paragraph (d)(2)(i) of this

section for the calendar year during which

the stability period containing the annuity

starting date begins.

(iii) Stability period. A plan must specify the period for which the applicable

interest rate remains constant (the stability

period). This stability period may be one

calendar month, one plan quarter, one calendar quarter, one plan year, or one calendar year. This same stability period also

applies to the applicable mortality table.

Bulletin No. 2024–6

(iv) Lookback month. A plan must

specify the lookback month that is used to

determine the applicable interest rate with

respect to a stability period. The lookback

month may be the first, second, third,

fourth, or fifth full calendar month preceding the first day of the stability period.

(v) Permitted average interest rate.

A plan may apply the rules of paragraph

(d)(4)(i) of this section by substituting a

permitted average applicable interest rate

with respect to the plan’s stability period

for the applicable interest rate determined

under paragraph (d)(3) of this section

for the applicable lookback month with

respect to the plan’s stability period. For

this purpose, a permitted average applicable interest rate with respect to a stability

period is the applicable interest rate that

is computed using the average of the section 417(e) segment rates described in

paragraph (d)(3) of this section for two or

more consecutive months from among the

first, second, third, fourth, and fifth calendar months preceding the first day of the

stability period. For this paragraph (d)(4)

(v) to apply, a plan must specify the manner in which the permitted average interest rate is computed.

(vi) Additional determination dates.

The Commissioner may prescribe, in

guidance published in the Internal Revenue Bulletin, other times that a plan may

provide for determining the applicable

interest rate. See §601.601(d) of this chapter.

(vii) Example of determination of applicable

interest rate—(A) Facts. The facts are the same as in

paragraph (d)(3)(ii)(A)(1) of this section (Example

1), except that Plan A provides that the applicable

interest rate for any annuity starting date is determined using the segment rates specified by the Commissioner for the third calendar month preceding

the beginning of the plan quarter that contains the

annuity starting date. Plan A also provides that the

applicable mortality table is the table specified by the

Commissioner for the calendar year that contains the

beginning of the quarterly stability period.

(B) Analysis. The segment rates that apply for

annuity starting dates during the period beginning

October 1, 2024, and ending December 31, 2024,

are the segment rates for July 2024. This plan design

permits the applicable interest rate to be fixed for

each plan quarter and for the applicable interest rate

for all distributions made during each plan quarter

to be determined before the beginning of the plan

quarter.

*****

(6) Exceptions—(i) In general. This

paragraph (d) (other than the provisions

Bulletin No. 2024–6

relating to section 411(d)(6) requirements

in paragraph (d)(9) of this section) does

not apply to the amount of a distribution

paid in the form of an annual benefit that—

(A) Does not decrease during the life of

the participant, or, in the case of a QPSA,

the life of the participant’s spouse; or

(B) Decreases during the life of the

participant merely because of—

(1) The death of the survivor annuitant

(but only if the reduction is to a level not

below 50 percent of the annual benefit

payable before the death of the survivor

annuitant); or

(2) The cessation or reduction of a

Social Security supplement or qualified

disability benefit (as defined in section

411(a)(9)).

(ii) Example of Social Security level income

option—(A) Facts. The facts are the same as in

paragraph (d)(3)(ii)(A)(1) of this section (Example

1). Plan A also provides for an optional distribution

in the form of a Social Security level income option

that is actuarially equivalent to the straight life

annuity payable at the same commencement date.

Under this optional form, the participant receives a

larger monthly payment until age 65, and a smaller

monthly payment afterward, so that it is estimated

that the participant will receive level monthly payments for life (taking into account the participant’s

estimated Social Security benefit beginning at age

65). Based on the plan’s early retirement reduction

factor of 0.65 at age 60, Participant R’s reduced early

retirement benefit payable as a straight life annuity

benefit commencing at age 60 is $1,300 per month

(which is less than the early retirement benefit that

is actuarially equivalent to the accrued benefit determined using the applicable interest and mortality

rates under section 417(e)(3)). Participant R’s estimated Social Security benefit is $1,000 per month

beginning at age 65. Plan A provides that actuarial

equivalence is determined using a 6 percent interest

rate and the mortality table set forth in Revenue Ruling 2001-62, 2001-53 IRB 632.

(B) Analysis of benefit calculation using plan

factors. Using the plan’s terms for determining

actuarial equivalence (an interest rate of 6 percent

and the mortality table set forth in Revenue Ruling

2001-62), the present value factor for a participant,

age 60, with lifetime benefits commencing at age 65

is 7.800, and the present value factor for a temporary annuity payable to that participant until age 65

is 4.278. The benefit payable to Participant R in the

form of a Social Security level income option (with

a decrease of $1,000 occurring at age 65) that is

actuarially equivalent to the early retirement benefit

of $1,300 is $1,945.80 per month until age 65 and

$945.80 per month thereafter.

the benefit payable under the Social Security level

income option decreases at age 65 and the decrease

is not on account of the death of the participant or a

beneficiary or the cessation or reduction of a Social

Security supplement or a qualified disability benefit, the exception under this paragraph (d)(6) from

657

the minimum present value requirements of section

417(e)(3) does not apply to the benefits payable

under the plan’s Social Security level income option.

As illustrated in paragraph (d)(3)(ii)(A) of this section (Example 1), to satisfy the requirements of section 417(e)(3) and this paragraph (d), the minimum

present value of a benefit payable to Participant R at

age 60 cannot be less than $250,368 (that is, $2,000

x 12 x 10.432).

(D) Conclusion. Based on the applicable interest rate and applicable mortality table under section

417(e)(3) that are assumed in paragraph (d)(3)(ii)

(A) of this section (Example 1), the present value

factor for a participant, age 60, with lifetime benefits commencing at age 65 is 10.432, and the present

value factor for a temporary annuity payable until

age 65 is 4.604. The present value of the benefit

payable to Participant R under the Social Security level income option is $225,901 ($1,945.80

x 4.604 x 12 + $945.80 x 10.432 x 12). Because

this present value is less than the minimum present value of a benefit payable to Participant R at

age 60 ($250,368), the plan would fail to satisfy

the minimum present value requirement of section

417(e)(3). However, see paragraph (d)(7)(ii)(C) of

this section for a rule permitting a plan to provide

for implicit bifurcation of a Social Security level

income option.

(7) * * *

(ii) * * *

income option. A plan that provides for a

Social Security level income option satisfies the requirements of this paragraph (d)

with respect to the temporary annuity portion of the Social Security level income

option if, under the terms of the plan—

(1) The portion of the participant’s

accrued benefit, expressed in the normal

form of benefit under the plan and commencing at normal retirement age (or at

the current date, if later), that is not paid

in the form of the temporary annuity is no

less than the excess, if any, of—

(i) The participant’s total accrued benefit under the plan expressed in that form

and commencing at that age; over

(ii) The annuity payable in that form

commencing at that age that is actuarially equivalent to that temporary annuity,

determined using the applicable interest

rate and the applicable mortality table; and

(2) The portion of the participant’s

immediate annuity (payable in the same

form as the accrued benefit is expressed)

that is not paid in the form of the temporary annuity is no less than the excess, if

any, of—

(i) The participant’s immediate annuity

(payable in the same form as the accrued

benefit is expressed); over

February 5, 2024

(ii) The immediate annuity payable in

that form that is actuarially equivalent to

that temporary annuity, determined using

the applicable interest rate and the applicable mortality table.

(D) Social Security level income option.

For purposes of paragraph (d)(7)(ii)(C)

of this section, a Social Security level

income option is an optional form of benefit under which a participant’s accrued

benefit is paid in the form of an annuity

for the life of the participant with additional temporary annuity payments that

cease at the participant’s assumed Social

Security commencement age and that do

not exceed the participant’s estimated

Social Security benefit at that age. For this

purpose, a participant’s estimated Social

Security benefit is the estimated amount

of old-age insurance benefits for the participant under title II of the Social Security

Act (as amended) and the assumed Social

Security commencement age is an age

that is not later than the age as of which

the participant is entitled to those benefits

without reduction on account of age.

*****

(v) * * *

(H) Example of bifurcation of Social Security

level income option—(1) Facts. The facts are the

same as in paragraph (d)(6)(ii)(A) of this section

(Example of Social Security level income option),

except that Plan A is amended to provide for implicit

bifurcation of a distribution paid in the form of a

Social Security level income option, as described in

paragraph (d)(7)(ii)(C) of this section. Thus, under

the plan amendment, a distribution in the form of a

Social Security level income option is bifurcated into

a temporary annuity portion that ceases at the participant’s assumed Social Security commencement age

and a life annuity portion.

(2) Analysis of bifurcation requirements. If the

requirements of paragraph (d)(7)(ii)(C) of this section are satisfied, then the temporary annuity portion

of the Social Security level income option satisfies

the minimum present value rules of section 417(e)(3)

and this paragraph (d). In order to satisfy paragraph

(d)(7)(ii)(C) of this section, there are two requirements that must be satisfied. First, the portion of the

participant’s accrued benefit that is not paid in the

form of the temporary annuity must be no less than

the excess of the participant’s total accrued benefit

over the annuity that is actuarially equivalent to the

temporary annuity (determined using the applicable

interest and mortality rates under section 417(e)(3)),

both expressed in the normal form of benefit commencing at normal retirement age (or at the current

date, if later). Second, the portion of the participant’s

immediate annuity that is not paid in the form of the

temporary annuity must be no less than the excess

February 5, 2024

of the participant’s total immediate annuity over the

immediate annuity that is actuarially equivalent to

the temporary annuity (determined using the applicable interest and mortality rates under section 417(e)

(3)), both expressed in the form of benefit in which

the accrued benefit is expressed but commencing at

the current age.

(3) Analysis of minimum portion of accrued benefit payable as lifetime annuity. A temporary annuity

that is payable from age 60 to 65 in the amount of

$1,000 per month is actuarially equivalent, determined using the applicable interest rate and applicable mortality table under section 417(e)(3), to a

straight life annuity of $441.33 per month payable

at normal retirement age. Therefore, under the

amendment, the portion of Participant R’s accrued

benefit that is not paid in the form of that temporary

annuity must be no less than $1,558.67 per month

payable as a straight life annuity at normal retirement age ($2,000-$441.33). Because the portion

of the accrued benefit that is not being paid in the

form of the temporary annuity determined without

regard to the amendment is $1,455.08 (the lifetime

annuity of $945.80, divided by the early retirement

factor of .65), the amendment increases that portion

of the accrued benefit to $1,558.67, and the associated early retirement benefit commencing at age 60

is $1,013.14 ($1,558.67 x 0.65).

(4) Analysis of minimum portion of immediate

benefit payable as lifetime annuity. A temporary

annuity that is payable from age 60 to 65 in the

amount of $1,000 per month is actuarially equivalent, determined using the applicable interest rate

and applicable mortality table under section 417(e)

(3), to a straight life annuity of $306.20 per month

commencing at age 60. Therefore, under the amendment, the portion of the participant’s immediate

benefit that is not paid in the form of that temporary annuity must be no less than $993.80 ($1,300 $306.20). Because this minimum amount of immediate annuity is less than the otherwise calculated

early retirement benefit at age 60 of $1,013.14, the

amendment does not increase the immediate annuity above that amount.

(5) Conclusion. Because the portion of the benefit under the Social Security level income option

that is not paid in the form of a temporary annuity satisfies the requirements of paragraph (d)(7)

(ii)(C) of this section, the plan is permitted under

paragraph (d)(7)(iii)(A) of this section to treat the

temporary annuity and the remaining portion of the

benefit as separate distribution options for purposes

of this paragraph (d). Under paragraph (d)(7)(ii)(C)

of this section, the temporary annuity portion of the

Social Security level income option is treated as

satisfying the minimum present value requirements

of section 417(e) and this paragraph (d). Because

the lifetime annuity portion of the Social Security

level income option is non-decreasing during the

lifetime of the participant, that portion is described

in paragraph (d)(6) of this section and is therefore

excepted from the requirements of section 417(e)

(3). Thus, under the amendment, the combined

payments payable to Participant R under the Social

Security level income option of $2,013.14 per

month until age 65 and $1,013.14 per month there-

658

after satisfy the requirements of section 417(e)(3)

and this paragraph (d).

(8) * * *

(vi) Applicability date for provisions

reflecting PPA ’06 updates and other

rules. Paragraphs (d)(1) through (4) of

this section apply to distributions with

annuity starting dates occurring on or

after October 1, 2024. For earlier distributions, the rules of §1.417(e)-1(d) as set

forth in 26 CFR part 1, revised as of April

1, 2023, apply, except that taxpayers may

instead apply the rules of paragraphs (d)

(1) through (4) of this section.

(9) Relationship with section 411(d)

(6). A plan amendment that changes the

interest rate or the mortality assumptions

used for the purposes described in paragraph (d)(1) of this section (including a

plan amendment that changes the time for

determining those assumptions) is generally subject to section 411(d)(6). However, for certain exceptions to the rule in

the preceding sentence, see paragraph (d)

(7)(iv) of this section (with respect to a

plan amendment providing for bifurcation that was adopted before December

31, 2017), §1.411(d)-3(a)(4) (regarding

changes in lookback months and stability periods for mortality table and interest

rate), §1.411(d)-4, Q&A-2(b)(2)(v) (with

respect to plan amendments relating to

involuntary distributions), and section

1107(a)(2) of the Pension Protection Act

of 2006, Public Law 109-280, 120 Stat.

780 (PPA ’06) (with respect to certain plan

amendments that were made pursuant to

a change to the Internal Revenue Code

made by PPA ’06 or pursuant to regulations issued thereunder).

*****

Douglas W. O’Donnell,

Deputy Commissioner for Services and

Enforcement.

Approved: December 27, 2023.

Lily Batchelder,

Assistant Secretary of the Treasury (Tax

Policy).

(Filed by the Office of the Federal Register on January 18, 2023, 8:45 a.m., and published in the issue

of the Federal Register for January 19, 2023, 89 FR

3552)

Bulletin No. 2024–6

Part III

Update for Weighted

Average Interest Rates,

Yield Curves, and Segment

Rates

Notice 2024-21

This notice provides guidance on the

corporate bond monthly yield curve, the

corresponding spot segment rates used

under § 417(e)(3), and the 24-month average segment rates under § 430(h)(2) of the

Internal Revenue Code. In addition, this

notice provides guidance as to the interest rate on 30-year Treasury securities

under § 417(e)(3)(A)(ii)(II) as in effect for

plan years beginning before 2008 and the

30-year Treasury weighted average rate

under § 431(c)(6)(E)(ii)(I).

YIELD CURVE AND SEGMENT

RATES

Section 430 specifies the minimum

funding requirements that apply to single-employer plans (except for CSEC plans

under § 414(y)) pursuant to § 412. Section

Applicable Month

January 2024

430(h)(2) specifies the interest rates that

must be used to determine a plan’s target

normal cost and funding target. Under

this provision, present value is generally

determined using three 24-month average

interest rates (“segment rates”), each of

which applies to cash flows during specified periods. To the extent provided under

§ 430(h)(2)(C)(iv), these segment rates

are adjusted by the applicable percentage

of the 25-year average segment rates for

the period ending September 30 of the

year preceding the calendar year in which

the plan year begins.1 However, an election may be made under § 430(h)(2)(D)

(ii) to use the monthly yield curve in place

of the segment rates.

Notice 2007-81, 2007-44 I.R.B. 899,

provides guidelines for determining the

monthly corporate bond yield curve, and

the 24-month average corporate bond

segment rates used to compute the target

normal cost and the funding target. Consistent with the methodology specified in

Notice 2007-81, the monthly corporate

bond yield curve derived from December 2023 data is in Table 2023-12 at the

end of this notice. The spot first, second,

and third segment rates for the month of

December 2023 are, respectively, 5.01,

5.13, and 5.15.

The 24-month average segment rates

determined under § 430(h)(2)(C)(i)

through (iii) must be adjusted pursuant

to § 430(h)(2)(C)(iv) to be within the

applicable minimum and maximum percentages of the corresponding 25-year

average segment rates. For this purpose,

any 25-year average segment rate that is

less than 5% is deemed to be 5%. The

25-year average segment rates for plan

years beginning in 2022, 2023 and 2024

were published in Notice 2021-54, 202141 I.R.B. 457, Notice 2022-40, 2022-40

I.R.B. 266, and Notice 2023-66, 2023-40

I.R.B. 992, respectively. The applicable

minimum and maximum percentages are

95% and 105% for plan years beginning

in 2022, 2023 and 2024.

24-MONTH AVERAGE CORPORATE

BOND SEGMENT RATES

The three 24-month average corporate bond segment rates applicable for

January 2024 without adjustment for the

25-year average segment rate limits are

as follows:

24-Month Average Segment Rates Without 25-Year Average Adjustment

First Segment

Second Segment

4.37

4.96

The adjusted 24-month average segment rates set forth in the chart below

reflect § 430(h)(2)(C)(iv) of the Code. The

24-month averages applicable for January

2024, adjusted to be within the applicable

minimum and maximum percentages of

Third Segment

4.95

the corresponding 25-year average segment rates in accordance with § 430(h)(2)

(C)(iv) of the Code, are as follows:

Adjusted 24-Month Average Segment Rates

For Plan Years Beginning In

Applicable Month

First Segment

Second Segment

Third Segment

2022

January 2024

4.75

5.18

5.92

2023

January 2024

4.75

5.00

5.74

2024

January 2024

4.75

4.96

5.59

Pursuant to § 433(h)(3)(A), the third segment rate determined under § 430(h)(2)(C) is used to determine the current liability of a CSEC plan (which is used to calculate the minimum amount

of the full funding limitation under § 433(c)(7)(C)).

Bulletin No. 2024–6

659

February 5, 2024

30-YEAR TREASURY SECURITIES

INTEREST RATES

Section 431 specifies the minimum funding requirements that apply

to multiemployer plans pursuant to §

412. Section 431(c)(6)(B) specifies a

minimum amount for the full-funding

limitation described in § 431(c)(6)(A),

based on the plan’s current liability.

Section 431(c)(6)(E)(ii)(I) provides

that the interest rate used to calculate

current liability for this purpose must

be no more than 5 percent above and

no more than 10 percent below the

weighted average of the rates of interest

on 30-year Treasury securities during

the four-year period ending on the last

day before the beginning of the plan

year. Notice 88-73, 1988-2 C.B. 383,

provides guidelines for determining the

weighted average interest rate. The rate

of interest on 30-year Treasury securities for December 2023 is 4.15 percent.

The Service determined this rate as the

average of the daily determinations

of yield on the 30-year Treasury bond

maturing in November 2053. For plan

years beginning in January 2024, the

weighted average of the rates of interest

on 30-year Treasury securities and the

permissible range of rates used to calculate current liability are as follows:

For Plan Years Beginning In

Treasury Weighted Average Rates

30-Year Treasury Weighted Average

Permissible Range 90% to 105%

January 2024

3.14

2.82 to 3.29

under § 417(e)(3)(D) are segment rates

computed without regard to a 24-month

average. Notice 2007-81 provides guidelines for determining the minimum pres-

ent value segment rates. Pursuant to that

notice, the minimum present value segment rates determined for December 2023

are as follows:

MINIMUM PRESENT VALUE

SEGMENT RATES

In general, the applicable interest rates

Month

December 2023

Minimum Present Value Segment Rates

First Segment

Second Segment

5.01

5.13

DRAFTING INFORMATION

The principal author of this notice is

Tom Morgan of the Office of Associ-

February 5, 2024

ate Chief Counsel (Employee Benefits,

Exempt Organizations, and Employment

Taxes). However, other personnel from

the IRS participated in the development

660

Third Segment

5.15

of this guidance. For further information

regarding this notice, contact Mr. Morgan

at 202-317-6700 or Tony Montanaro at

626-927-1475 (not toll-free number).

Bulletin No. 2024–6

Table 2023-12

Monthly Yield Curve for December 2023

Derived from December 2023 Data

Maturity

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

5.5

6.0

6.5

7.0

7.5

8.0

8.5

9.0

9.5

10.0

10.5

11.0

11.5

12.0

12.5

13.0

13.5

14.0

14.5

15.0

15.5

16.0

16.5

17.0

17.5

18.0

18.5

19.0

19.5

20.0

Yield

5.46

5.31

5.17

5.05

4.95

4.88

4.84

4.81

4.80

4.81

4.83

4.86

4.89

4.93

4.97

5.00

5.04

5.07

5.10

5.13

5.15

5.17

5.19

5.21

5.22

5.23

5.24

5.23

5.22

Bulletin No. 2024–6

Maturity

20.5

21.0

21.5

22.0

22.5

23.0

23.5

24.0

24.5

25.0

25.5

26.0

26.5

27.0

27.5

28.0

28.5

29.0

29.5

30.0

30.5

31.0

31.5

32.0

32.5

33.0

33.5

34.0

34.5

35.0

35.5

36.0

36.5

37.0

37.5

38.0

38.5

39.0

39.5

40.0

Yield

5.22

5.21

5.20

5.19

5.18

5.17

5.16

5.15

Maturity

40.5

41.0

41.5

42.0

42.5

43.0

43.5

44.0

44.5

45.0

45.5

46.0

46.5

47.0

47.5

48.0

48.5

49.0

49.5

50.0

50.5

51.0

51.5

52.0

52.5

53.0

53.5

54.0

54.5

55.0

55.5

56.0

56.5

57.0

57.5

58.0

58.5

59.0

59.5

60.0

Yield

5.15

5.14

5.13

661

Maturity

60.5

61.0

61.5

62.0

62.5

63.0

63.5

64.0

64.5

65.0

65.5

66.0

66.5

67.0

67.5

68.0

68.5

69.0

69.5

70.0

70.5

71.0

71.5

72.0

72.5

73.0

73.5

74.0

74.5

75.0

75.5

76.0

76.5

77.0

77.5

78.0

78.5

79.0

79.5

80.0

Yield

5.13

5.12

Maturity

80.5

81.0

81.5

82.0

82.5

83.0

83.5

84.0

84.5

85.0

85.5

86.0

86.5

87.0

87.5

88.0

88.5

89.0

89.5

90.0

90.5

91.0

91.5

92.0

92.5

93.0

93.5

94.0

94.5

95.0

95.5

96.0

96.5

97.0

97.5

98.0

98.5

99.0

99.5

100.0

Yield

5.12

5.11

February 5, 2024

Guidance on Anti-Abuse

Rules Under Section 127

of the SECURE 2.0 Act of

2022 and Certain Other

Issues with Respect to

Pension-Linked Emergency

Savings Accounts

Notice 2024-22

I. PURPOSE

This notice provides guidance with

respect to section 127 of Division T of the

Consolidated Appropriations Act, 2023,

Pub. L. 117-328, 136 Stat. 3559 (2022),

known as the SECURE 2.0 Act of 2022

(SECURE 2.0 Act). Section 127 of the

SECURE 2.0 Act provides for the creation

of Pension-Linked Emergency Savings

Accounts (PLESAs) effective for plan

years beginning after December 31, 2023.

This notice is not intended to provide

comprehensive guidance with respect

to section 127 of the SECURE 2.0 Act,

but rather it provides initial guidance

regarding anti-abuse rules under section

402A(e)(12) of the Internal Revenue Code

(Code) to assist in the implementation of

SECURE 2.0 Act section 127 provisions.

This notice also addresses whether Rev.

Rul. 74-55, 1974-1 C.B. 89, and Rev. Rul.

74-56, 1974-1 C.B. 90, are applicable to

PLESAs.

The Department of the Treasury (Treasury Department) and the Internal Revenue Service (IRS) invite comments on this

guidance and any other aspect of section

127(e) and (f) of the SECURE 2.0 Act.

II. BACKGROUND

Section 127 of the SECURE 2.0 Act

amends title I of the Employee Retirement Income Security Act of 1974, Pub.

L. No. 93-406, 88 Stat. 829, as amended

(ERISA),1 and section 402A of the Code

to provide for the creation of PLESAs.2

In general, PLESAs are short-term savings accounts established and maintained

in connection with a defined contribution

plan and are treated as a type of designated Roth account.

Section 402A(e)(1)(A) provides that

an applicable retirement plan (as defined

under section 402A(f)(1)) may include a

PLESA established pursuant to section

801 of ERISA, which, except as otherwise provided in section 402A(e) of the

Code, is treated as a designated Roth

account. Under section 402A(e)(1)(A)(ii),

an applicable retirement plan may either

(a) offer to enroll an eligible participant

in a PLESA or (b) automatically enroll

an eligible participant in a PLESA pursuant to an automatic contribution arrangement (described in section 402A(e)(4)).

Further, under section 402A(e)(1)(B), if

an applicable retirement plan includes a

PLESA, the plan must: separately account

for contributions to the PLESA (and any

earnings properly allocable to the contributions), maintain separate recordkeeping

with respect to each PLESA, and allow

withdrawals from the PLESA in accordance with distribution rules described in

section 402A(e)(7), which permits a withdrawal at the participant’s discretion, in

whole or in part, at least once per month.

Under section 402A(e)(2)(A), an eligible participant with regard to a defined

contribution plan means an individual,

without regard to whether the individual

otherwise participates in the plan, who

meets any age, service, and other eligibility requirements of the plan and is not a

highly compensated employee (as defined

in section 414(q)). Pursuant to section

402A(e)(2)(B), an eligible participant on

whose behalf a PLESA is established who

thereafter becomes a highly compensated

employee cannot make further contributions to the PLESA but retains the right to

withdraw any account balance in accordance with the rules in section 402A(e)(7)

and (8), which permit withdrawals upon

termination of employment or plan termination.

Subject to certain excess contribution

rules, section 402A(e)(3)(A) provides

that no contribution shall be accepted to

a PLESA to the extent such contribution

would cause the portion of the account

balance attributable to participant contri-

butions to exceed the lesser of (i) $2,500

or (ii) an amount determined by the plan

sponsor of the PLESA.

In general, under section 402A(e)(6)

(A), if an employer makes any matching contributions (as defined in section

401(m)(4)) to a defined contribution plan

of which a PLESA is a part, the employer

must (subject to the limitations of section

402A(e)(3)) make matching contributions on behalf of an eligible participant

on account of the participant’s contributions to the PLESA. The matching contributions must be at the same rate as any

other matching contribution on account

of an elective contribution by the participant. The matching contributions will be

made to the participant’s account under

the defined contribution plan which is not

the PLESA. The matching contributions

on account of contributions to the PLESA

must not exceed the maximum account

balance under section 402A(e)(3)(A) for

the plan year. Pursuant to section 402A(e)

(6)(B), for purposes of any applicable

limitation on matching contributions, any

matching contributions made under the

plan are treated first as attributable to the

elective deferrals of the participant other

than contributions to a PLESA.

Pursuant to section 402A(e)(7)(A), a

PLESA generally must allow for withdrawal by the participant on whose behalf

the account is established of the account

balance, in whole or in part, at the participant’s direction, at least once per calendar

month. The distribution of such a withdrawal by the participant must be made as

soon as practicable after the date on which

the participant elects to make such withdrawal. Section 402A(e)(7)(B) provides

that a distribution from a PLESA is treated

as a qualified distribution for purposes of

section 402A(d) and treated as meeting

the requirements of sections 401(k)(2)

(B)(i), 403(b)(7)(A)(i), 403(b)(11), and

457(d)(1)(A).

Section 402A(e)(11) provides that,

notwithstanding section 411(d)(6), a plan

which includes a PLESA may cease to

offer such accounts at any time.

Section 402A(e)(12)(A) provides that

a plan of which a PLESA is a part may

This notice does not provide guidance on elements of section 127 of the SECURE 2.0 Act over which the Department of Labor has interpretive authority.

Section 127 of the SECURE 2.0 Act added new subsection 402A(e) of the Code and redesignated subsection 402A(e) as 402A(f), effective January 1, 2024.

February 5, 2024

662

Bulletin No. 2024–6

employ reasonable procedures to limit the

frequency or amount of matching contributions with respect to contributions to

such account, solely to the extent necessary to prevent manipulation of the rules

of the plan to cause matching contributions to exceed the intended amounts or

frequency. Section 402A(e)(12)(B) provides that a plan of which a PLESA is a

part is not required to suspend matching

contributions following any participant

withdrawal of contributions, including

elective deferrals and employee contributions, whether or not matched and whether

or not made pursuant to an automatic contribution arrangement.

The last sentence of section 402A(e)

(12) provides that the Secretary of the

Treasury, in consultation with the Secretary of Labor, shall issue regulations or

other guidance not later than 12 months

after the date of the enactment of the

SECURE 2.0 Act with respect to the antiabuse rules described in section 402A(e)

(12).

Section 127(e)(2) of the SECURE 2.0

Act amends section 72(t)(2) of the Code

to add a new subparagraph (J). Section

72(t)(2)(J) provides that, except as provided in section 72(t)(3) and (4), the

ten-percent additional tax on early distributions from qualified retirement plans

under section 72(t)(1) does not apply to

distributions from a PLESA pursuant to

section 402A(e). Section 127(e)(3) of the

SECURE 2.0 Act amends section 72(d) of

the Code to add new paragraph (3). Section 72(d)(3) provides that, for purposes

of section 72, contributions to a PLESA

to which section 402A(e) applies (and any

income allocable thereto) may be treated

as a separate contract.

Section 127(g) of the SECURE 2.0 Act

provides that the amendments made by

section 127 apply to plan years beginning

after December 31, 2023.

III. GUIDANCE UNDER SECTION

402A(e)(12) REGARDING

REASONABLE ANTI-ABUSE

PROCEDURES

Congress directed that the Secretary

of the Treasury, in consultation with the

Secretary of Labor, issue guidance with

respect to the discretionary anti-abuse

rules described in section 402A(e)(12).

Bulletin No. 2024–6

This Part III provides examples of antiabuse procedures that are not reasonable

and thus may not be used to limit the frequency or amount of matching contributions made to the account. This Part III

first highlights several statutory provisions

within section 402A(e) to which a plan

might look to limit the ability of participants to manipulate the rules of the plan

to cause matching contributions to exceed

the intended amounts or frequency.

A. Statutory Provisions

Statutory provisions under section

402A(e) that limit manipulation of the

rules of the plan to cause matching contributions to exceed the intended amounts or

frequency include:

• Order of matching contributions:

Section 402A(e)(6)(B) provides that

any matching contributions made

under the plan are treated first as attributable to a participant’s elective deferrals other than PLESA contributions.

As a result, any elective deferrals a

participant makes under the underlying defined contribution plan will be

matched first and will lower the availability of matching contributions that

will be made on account of participant

contributions to their PLESA;

• Limitation on annual matching contributions: Section 402A(e)(6)(A) provides that matching contributions on

account of contributions to the PLESA

cannot exceed the maximum account

balance set under section 402A(e)(3)

(A) ($2,500 (as adjusted by the Secretary of the Treasury)) or a lower

amount set by the plan sponsor) for

the plan year. Section 402A(e)(3)(A)

(ii) also permits a plan sponsor to set

a lower PLESA balance limit than the

$2,500 limit under section 402A(e)(3)

(A)(i). A lower limit on the portion of

the PLESA balance attributable to participant contributions would result in a

correspondingly lower cap on annual

matching contributions that would be

required under section 402A(e)(6)(A).

A plan sponsor might view these provisions as sufficient anti-abuse provisions,

and therefore decide not to impose any

other restrictions meant to prevent manipulation of matching contributions. In such

a case, for example, a plan sponsor may

663

consider a participant as not manipulating

the matching contribution rules if the participant made a $2,500 contribution in one

year, received the matching contribution

on such amount, and then took $2,500 in

distributions that year and repeated that

pattern in subsequent years.

Similarly, because plans are not

required to permit participants to take

more than one distribution per month, plan

sponsors may view the option of limiting

the number of permissible withdrawals to

a maximum of once per month as a sufficient constraint on the potential to manipulate the matching contribution rules.

B. Procedures to Limit Manipulation of

Matching Contributions

Under section 402A(e)(12)(A), a plan

of which a PLESA is a part may, but is

not required to, employ reasonable procedures to limit the frequency or amount

of matching contributions with respect to

contributions to a PLESA. However, plan

sponsors might be concerned that a participant could nevertheless contribute to

the participant’s PLESA and take distributions in a way that maximizes matching

contributions received but maintains little

to no contributions in the PLESA. If a plan

sponsor decides to employ additional procedures to prevent abuse, section 402A(e)

(12)(A) provides that reasonable procedures are permitted solely to the extent

necessary to prevent manipulation of the

rules of the plan to cause matching contributions to exceed the intended amounts

or frequency.

A reasonable anti-abuse procedure is

one that balances the interests of participants in using the PLESA for its intended

purpose with the interests of plan sponsors in preventing manipulation of the

plan’s matching contribution rules. Plan

sponsors may find it challenging to identify participants engaging in manipulative

practices because those participants may

be able to adapt their pattern of contributions and distributions to replicate patterns

of participants making contributions and

taking periodic distributions for legitimate

purposes, such as unexpected expenses.

The Treasury Department and IRS have

determined that procedures that are unreasonable for a plan sponsor to implement

include, but are not limited to:

February 5, 2024

• Forfeiture of matching contributions: A plan may not provide that

matching contributions already made

on account of participant contributions

to the PLESA will be forfeited by reason of a participant’s withdrawal from

a PLESA;

• Suspension of participant contributions to PLESA: A plan may not suspend a participant’s ability to contribute

to the participant’s PLESA on account

of a withdrawal from the PLESA; and

• Suspension of matching contributions on participant contributions to

the underlying defined contribution

plan: A plan may not suspend matching contributions made on account of

participant elective deferrals to the

underlying defined contribution plan.

IV. REVENUE RULINGS 74-55 AND

74-56

Certain stakeholders have expressed

concerns regarding the application of Rev.

Rul. 74-55 and Rev. Rul. 74-56 to PLESAs. The Treasury Department and the

IRS do not view these revenue rulings

February 5, 2024

as applicable in the context of PLESAs,

regardless of whether the contributions

are matched. The Treasury Department

and the IRS invite comments regarding

the applicability of these revenue rulings,

and the regulations on which they are

based, in this or other contexts.

V. REQUEST FOR COMMENTS

The Treasury Department and the IRS

invite comments and suggestions regarding

the matters discussed in this notice and any

other aspect of section 127 of the SECURE

2.0 Act. In particular, comments related

to reasonable anti-abuse procedures are

invited in order to explore further examples of what may be reasonable. The Treasury Department and IRS are interested in

examples of reasonable procedures which

effectively balance the policy of incentivizing emergency savings while discouraging

potentially abusive practices.

Comments should be submitted in

writing on or before April 5, 2024, and

should include a reference to Notice 202422. Comments may be submitted electronically via the Federal eRulemaking Portal

664

at www.regulations.gov (type “IRS Notice

2024-22” in the search field on the regulations.gov home page to find this notice

and submit comments). Alternatively,

comments may be submitted by mail to:

Internal Revenue Service

Attn: CC:PA:LPD:PR (Notice 202422), Room 5203

P.O. Box 7604

Ben Franklin Station

Washington, D.C. 20044.

The Treasury Department and the IRS

will publish for public availability any

comment submitted electronically or on

paper to its public docket.

VI. DRAFTING INFORMATION

The principal author of this notice is

Jordan D. Kohl of the Office of the Associate Chief Counsel (Employee Benefits,

Exempt Organizations, and Employment

Taxes). Other personnel from the Treasury

Department and the IRS also participated

in the development of this guidance. For

further information regarding this notice,

please call Ms. Kohl at (312) 292-2170

(not a toll-free number).

Bulletin No. 2024–6

Part IV

Transitional guidance

under section 6050I with

respect to the reporting of

information on the receipt

of digital assets

Announcement 2024-4

Section 80603(b)(3) of the Infrastructure Investment and Jobs Act, Pub. L. No.

117-58, 135 Stat. 429, 1339 (2021) (Infrastructure Act) amended section 6050I of

the Internal Revenue Code1 to add digital

assets to the list of assets included in the

definition of cash in section 6050I(d). This

announcement provides transitional guidance under section 6050I with respect to

reporting transactions involving receipt

of digital assets and clarifies that at this

time, digital assets are not required to be

included when determining whether cash

received in a single transaction (or two

or more related transactions) meets the

reporting threshold. The Department of

the Treasury (Treasury Department) and

the Internal Revenue Service (IRS), however, intend to prescribe regulations, to

provide additional information and procedures for reporting the receipt of digital

assets under section 6050I.

Under section 6050I(a), any person (the

recipient) engaged in a trade or business

who, in the course of that trade or business, receives cash in excess of $10,000

in one transaction (or two or more related

transactions) must file an information

return reporting the receipt of cash. The

regulations require that the return must be

filed on Form 8300, Report of Cash Payments Over $10,000 Received in a Trade

or Business, within 15 days of the receipt

of cash and report specified information.

See section 1.6050I-1(a) and (e). Section

6050I also requires persons required to

file Form 8300 to furnish an annual written statement to each payer whose name is

required to be set forth on the Form 8300.

Section 80603(b)(3) of the Infrastructure Act amended section 6050I(d) to

expand the definition of the term “cash”

to include any digital asset as defined in

section 6045(g)(3)(D). All of the amendments made by section 80603 of the Infrastructure Act apply to returns required to

be filed, and statements required to be

furnished, after December 31, 2023. The

Treasury Department and the IRS published a Notice of Proposed Rulemaking

on August 29, 2023, that includes proposed rules clarifying the definition of

the term digital assets found in section

6045(g)(3)(D). 88 Fed. Reg. 59576 (Aug.

29, 2023). These proposed regulations

have not yet been finalized.

The Treasury Department and the IRS

intend to implement section 80603(b)

(3) of the Infrastructure Act by publishing regulations specifically addressing

the application of section 6050I to digital assets and by providing forms and

instructions for reporting that address the

inclusion of digital assets. Accordingly,

until the Treasury Department and the IRS

publish regulations under section 6050I

to implement section 80603(b)(3) of the

Infrastructure Act, persons engaged in a

trade or business who, in the course of that

trade or business, receive digital assets or

digital assets and other cash in one transaction (or two or more related transactions) will not be required to include those

digital assets when determining whether

cash received has a value in excess of the

$10,000 reporting threshold for purposes

of determining if reporting is required

under section 6050I with respect to those

transactions. Persons engaged in a trade or

business who, in the course of that trade or

business, receive cash (other than digital

assets) in excess of $10,000 in one transaction (or two or more related transactions) must continue to file an information

return under section 6050I with respect to

that cash received.

Nothing in this announcement affects

the income tax obligations of persons

engaged in a trade or business who receive

digital assets and persons who use digital

assets to make any payments in the types

of transactions described above. See Frequently Asked Questions on Virtual Currency Transitions for additional information.

The principal author of this announcement is the Office of the Associate Chief

Counsel (Procedure & Administration).

For further information regarding this

announcement, please call (202) 3175436 (not a toll-free number).

Unless otherwise specified, all “Section” references are to sections of the Code or the Income Tax Regulations (26 CFR part 1).

Bulletin No. 2024–6

665

February 5, 2024

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. 2024–6

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.

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.

February 5, 2024

Numerical Finding List1

Bulletin 2024–6

Announcements:

2024-1, 2024-02 I.R.B. 363

2024-3, 2024-02 I.R.B. 364

2024-5, 2024-05 I.R.B. 635

2024-6, 2024-05 I.R.B. 635

2024-4, 2024-06 I.R.B. 665

Notices:

2024-1, 2024-02 I.R.B. 314

2024-2, 2024-02 I.R.B. 316

2024-3, 2024-02 I.R.B. 338

2024-4, 2024-02 I.R.B. 343

2024-5, 2024-02 I.R.B. 347

2024-6, 2024-02 I.R.B. 348

2024-7, 2024-02 I.R.B. 355

2024-8, 2024-02 I.R.B. 356

2024-9, 2024-02 I.R.B. 358

2024-11, 2024-02 I.R.B. 360

2024-10, 2024-03 I.R.B. 406

2024-12, 2024-05 I.R.B. 616

2024-13, 2024-05 I.R.B. 618

2024-16, 2024-05 I.R.B. 622

2024-18, 2024-05 I.R.B. 625

2024-19, 2024-05 I.R.B. 627

2024-21, 2024-06 I.R.B. 659

2024-22, 2024-06 I.R.B. 662

Proposed Regulations:

REG-118492-23, 2024-02 I.R.B. 366

REG-107423-23, 2024-03 I.R.B. 411

REG-121010-17, 2024-05 I.R.B. 636

Revenue Procedures:

2024-1, 2024-01 I.R.B. 1

2024-2, 2024-01 I.R.B. 119

2024-3, 2024-01 I.R.B. 143

2024-4, 2024-01 I.R.B. 160

2024-5, 2024-01 I.R.B. 262

2024-7, 2024-01 I.R.B. 303

2024-8, 2024-04 I.R.B. 479

2024-9, 2024-05 I.R.B. 628

Revenue Rulings:

2024-1, 2024-02 I.R.B. 307

2024-2, 2024-02 I.R.B. 311

2024-3, 2024-06 I.R.B. 646

Treasury Decisions:

9984, 2024-03 I.R.B. 386

9985, 2024-05 I.R.B. 573

9986, 2024-05 I.R.B. 610

9987, 2024-06 I.R.B. 648

A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2023–27 through 2023–52 is in Internal Revenue Bulletin

2023–52, dated December 26, 2023.

February 5, 2024

Bulletin No. 2024–6

Finding List of Current Actions on

Previously Published Items1

Bulletin 2024–6

A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2023–27 through 2023–52 is in Internal Revenue Bulletin

2023–52, dated December 26, 2023.

Bulletin No. 2024–6

iii

February 5, 2024

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.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.