Taxable Year of Income Inclusion Under an Accrual Method of Accounting and Advance Payments for Goods, Services, and Other Items, 1256 [C1-2020-28653]
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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:
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16:26 Jan 07, 2021
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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
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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
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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]]
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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
