Taxable Year of Income Inclusion Under an Accrual Method of Accounting and Advance Payments for Goods, Services, and Other Items, 1256 [C1-2020-28653]

Download as PDF 1256 Federal Register / Vol. 86, No. 5 / Friday, January 8, 2021 / Rules and Regulations Assistant General Counsel for Regulatory Affairs, Office of the General Counsel, 202–229–3839. (TTY users may call the Federal relay service tollfree at 800–877–8339 and ask to be connected to 202–229–3839.) SUPPLEMENTARY INFORMATION: DEPARTMENT OF THE TREASURY Internal Revenue Service 26 CFR Part 1 [TD 9941] RIN 1545–BO68 and 1545–BO78 Executive Summary Taxable Year of Income Inclusion Under an Accrual Method of Accounting and Advance Payments for Goods, Services, and Other Items Correction In rule document 2020–28563 beginning on page 810 in the issue of Wednesday, January 6, 2021, make the following correction: On page 810, in the DATES section, in the second line beneath the heading, ‘‘December 31, 2021’’ should read ‘‘December 31, 2020’’. [FR Doc. C1–2020–28653 Filed 1–6–21; 1:15 pm] BILLING CODE 1301–00–D PENSION BENEFIT GUARANTY CORPORATION 29 CFR Parts 4001, 4204, 4206, 4207, 4211, 4219 RIN 1212–AB36 Methods for Computing Withdrawal Liability, Multiemployer Pension Reform Act of 2014 Pension Benefit Guaranty Corporation. ACTION: Final rule. AGENCY: The Pension Benefit Guaranty Corporation is amending its regulations on Allocating Unfunded Vested Benefits to Withdrawing Employers and Notice, Collection, and Redetermination of Withdrawal Liability. The amendments implement statutory provisions affecting the determination of a withdrawing employer’s liability under a multiemployer plan and annual withdrawal liability payment amount when the plan has had benefit reductions, benefit suspensions, surcharges, or contribution increases that must be disregarded. The amendments also provide simplified withdrawal liability calculation methods. DATES: Effective date: This rule is effective February 8, 2021. Applicability date: This rule applies to employer withdrawals from multiemployer plans that occur in plan years beginning on or after February 8, 2021. FOR FURTHER INFORMATION CONTACT: Hilary Duke (duke.hilary@pbgc.gov), tkelley on DSKBCP9HB2PROD with RULES SUMMARY: VerDate Sep<11>2014 16:26 Jan 07, 2021 Jkt 253001 Purpose of Regulatory Action This rulemaking is needed to implement statutory changes affecting the determination of an employer’s withdrawal liability and annual withdrawal liability payment amount when the employer withdraws from a multiemployer plan. The final regulation provides simplified methods for determining withdrawal liability and annual payment amounts, which a multiemployer plan sponsor can adopt to satisfy the statutory requirements and to reduce administrative burden. In this final rule, PBGC adopts its proposed changes implementing statutory changes and providing simplified methods, with some modifications in response to public comments. PBGC’s legal authority for this action is based on section 4002(b)(3) of the Employee Retirement Income Security Act of 1974 (ERISA), which authorizes PBGC to issue regulations to carry out the purposes of title IV of ERISA; section 305(g) 1 of ERISA, which provides the statutory requirements for changes to withdrawal liability; section 4001 of ERISA (Definitions); section 4204 of ERISA (Sale of Assets); section 4206 of ERISA (Adjustment for Partial Withdrawal); section 4207 (Reduction or Waiver of Complete Withdrawal Liability); section 4211 of ERISA (Methods for Computing Withdrawal Liability); and section 4219 of ERISA (Notice, Collection, Etc., of Withdrawal Liability). Section 305(g)(5) of ERISA directs PBGC to provide simplified methods for multiemployer plan sponsors to use in determining withdrawal liability and annual payment amounts. Major Provisions of the Regulatory Action This final regulation amends PBGC’s regulations on Allocating Unfunded Vested Benefits to Withdrawing Employers (29 CFR part 4211) and Notice, Collection, and Redetermination of Withdrawal Liability (29 CFR part 4219). The changes implement statutory changes affecting the determination of an employer’s withdrawal liability and annual withdrawal liability payment 1 Section 305(g) of ERISA and section 432(g) of the Internal Revenue Code (Code) are parallel provisions in ERISA and the Code. PO 00000 Frm 00004 Fmt 4700 Sfmt 4700 amount and provide simplified methods for a plan sponsor to— • Disregard reductions and suspensions of nonforfeitable benefits in determining the plan’s unfunded vested benefits for purposes of calculating withdrawal liability. • Disregard certain contribution increases if the plan is using the presumptive, modified presumptive, or rolling-5 method for purposes of determining the allocation of unfunded vested benefits to an employer. • Disregard certain contribution increases for purposes of determining an employer’s annual withdrawal liability payment. Table of Contents I. Background II. Discussion of Final Regulation and Public Comments III. Regulatory Changes To Reflect Benefit Decreases A. Requirement To Disregard Adjustable Benefit Reductions and Benefit Suspensions (§ 4211.6) B. Simplified Methods for Disregarding Adjustable Benefit Reductions and Benefit Suspensions (§ 4211.16) 1. Employer’s Proportional Share of the Value of an Adjustable Benefit Reduction 2. Employer’s Proportional Share of the Value of a Benefit Suspension 3. Chart of Simplified Methods To Determine Employer’s Proportional Share of the Value of a Benefit Suspension and an Adjustable Benefit Reduction IV. Regulatory Changes To Reflect Surcharges and Contribution Increases A. Requirement to Disregard Surcharges and Certain Contribution Increases in Determining the Allocation of Unfunded Vested Benefits to an Employer (§ 4211.4) and the Annual Withdrawal Liability Payment Amount (§ 4219.3) B. Simplified Methods for Disregarding Certain Contribution Increases in the Allocation Fraction (§ 4211.14) 1. Determining the Numerator Using the Employer’s Plan Year 2014 Contribution Rate 2. Determining the Denominator Using Each Employer’s Plan Year 2014 Contribution Rate 3. Determining the Denominator Using the Proxy Group Method C. Simplified Methods After Plan Is No Longer in Endangered or Critical Status 1. Including Contribution Increases in Determining the Allocation of Unfunded Vested Benefits (§ 4211.15) 2. Continuing to Disregard Contribution Increases in Determining the Highest Contribution Rate (§ 4219.3) V. Compliance With Rulemaking Guidelines I. Background The Pension Benefit Guaranty Corporation (PBGC) administers two insurance programs for private-sector defined benefit pension plans under title IV of the Employee Retirement E:\FR\FM\08JAR1.SGM 08JAR1

Agencies

[Federal Register Volume 86, Number 5 (Friday, January 8, 2021)]
[Rules and Regulations]
[Page 1256]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: C1-2020-28653]



[[Page 1256]]

=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[TD 9941]
RIN 1545-BO68 and 1545-BO78


Taxable Year of Income Inclusion Under an Accrual Method of 
Accounting and Advance Payments for Goods, Services, and Other Items

Correction

    In rule document 2020-28563 beginning on page 810 in the issue of 
Wednesday, January 6, 2021, make the following correction:
    On page 810, in the DATES section, in the second line beneath the 
heading, ``December 31, 2021'' should read ``December 31, 2020''.

[FR Doc. C1-2020-28653 Filed 1-6-21; 1:15 pm]
BILLING CODE 1301-00-D