Interest rates; underpayments and overpayments. The rates for interest determined under section 6621 of the Code for the calendar quarter beginning January 1, 2012, will be 3 percent for overpayments (2 percent in the case of a corporation), 3 percent for the underpayments, and 5 percent for large corporate underpayments. The rate of interest paid on the portion of a corporate overpayment exceeding $10,000 will be 0.5 percent.

This notice requests comments on proposed guidance concerning the income, gift, estate, and/or generation-skipping transfer tax consequences in situations in which transfers by a trustee from an irrevocable trust to another irrevocable trust (sometimes called “decanting”) results in a change of beneficial interests.

General rules and specifications for substitute forms and schedules. Requirements are set forth for privately designed and privately printed federal tax forms and conditions under which the Service will accept computer prepared, and computer-generated tax forms and schedules. It will be reproduced as the next revision of Publication 1167. Rev. Proc. 2010-21 superseded.

General rules and specifications for substitute forms W-2 and W-3. This procedure provides specifications for the private printing of red-ink and black-and-white paper substitutes for the 2011 revision of Form W-2, Wage and Tax Statement, and Form W-3, Transmittal of Wage and Tax Statements. It will be reproduced as the next revision of Publication 1141. Rev. Proc. 2010-42 superseded.

This notice provides a sample plan amendment that plan sponsors may adopt to satisfy section 436 of the Code regarding limitations on the accrual and payment of benefits under certain underfunded single employer defined benefit plans. The notice also extends both the deadline to amend a plan to satisfy section 436 and the period during which such an amendment is eligible for relief from the anti-cutback requirements of section 411(d)(6).

This notice contains the 2011 Cumulative List of Changes in Plan Qualification Requirements (2011 Cumulative List) described in section 4 of Rev. Proc. 2007-44, 2007-2 C.B. 54. The 2011 Cumulative List is to be used by plan sponsors and practitioners submitting determination, opinion, or advisory letter applications for plans during the period beginning February 1, 2012, and ending January 31, 2013.

Weighted average interest rate update; corporate bond indices; 30-year Treasury securities; segment rates. This notice contains updates for the corporate bond weighted average interest rate for plan years beginning in December 2011; the 24-month average segment rates; the funding transitional segment rates applicable for December 2011; and the minimum present value transitional rates for November 2011.

Relief for IRA owners subject to certain broker agreements. This announcement provides relief to owners of Individual Retirement Accounts (IRAs) who have signed certain indemnification agreements in connection with their IRAs.

This announcement describes several important changes to the Employee Plans determination letter program that take effect in 2012.

This notice requests comments on proposed guidance concerning the income, gift, estate, and/or generation-skipping transfer tax consequences in situations in which transfers by a trustee from an irrevocable trust to another irrevocable trust (sometimes called “decanting”) results in a change of beneficial interests.

This notice requests comments on proposed guidance concerning the income, gift, estate, and/or generation-skipping transfer tax consequences in situations in which transfers by a trustee from an irrevocable trust to another irrevocable trust (sometimes called “decanting”) results in a change of beneficial interests.

2012 social security contribution and benefit base; domestic employee coverage threshold. The Commissioner of the Social Security Administration has announced (1) the OASDI contribution and benefit base for remuneration paid in 2012 and self-employment income earned in taxable years beginning in 2012, and (2) the domestic employee coverage threshold amount for 2012.

General rules and specifications for substitute forms W-2 and W-3. This procedure provides specifications for the private printing of red-ink and black-and-white paper substitutes for the 2011 revision of Form W-2, Wage and Tax Statement, and Form W-3, Transmittal of Wage and Tax Statements. It will be reproduced as the next revision of Publication 1141. Rev. Proc. 2010-42 superseded.

General rules and specifications for private printing of substitute forms. This procedure provides requirements for reproducing paper substitutes and for furnishing substitute recipient statements for Form 1096, 1098, 1099, 5498, and certain other information returns. It will be reproduced as the next revision of Publication 1179. Rev. Proc. 2009-49 superseded.

It is the policy of the Internal Revenue Service to announce at an early date whether it will follow the holdings in certain cases. An Action on Decision is the document making such an announcement. An Action on Decision will be issued at the discretion of the Service only on unappealed issues decided adverse to the government. Generally, an Action on Decision is issued where its guidance would be helpful to Service personnel working with the same or similar issues. Unlike a Treasury Regulation or a Revenue Ruling, an Action on Decision is not an affirmative statement of Service position. It is not intended to serve as public guidance and may not be cited as precedent.

Actions on Decisions shall be relied upon within the Service only as conclusions applying the law to the facts in the particular case at the time the Action on Decision was issued. Caution should be exercised in extending the recommendation of the Action on Decision to similar cases where the facts are different. Moreover, the recommendation in the Action on Decision may be superseded by new legislation, regulations, rulings, cases, or Actions on Decisions.

Prior to 1991, the Service published acquiescence or nonacquiescence only in certain regular Tax Court opinions. The Service has expanded its acquiescence program to include other civil tax cases where guidance is determined to be helpful. Accordingly, the Service now may acquiesce or nonacquiesce in the holdings of memorandum Tax Court opinions, as well as those of the United States District Courts, Claims Court, and Circuit Courts of Appeal. Regardless of the court deciding the case, the recommendation of any Action on Decision will be published in the Internal Revenue Bulletin.

The recommendation in every Action on Decision will be summarized as acquiescence, acquiescence in result only, or nonacquiescence. Both “acquiescence” and “acquiescence in result only” mean that the Service accepts the holding of the court in a case and that the Service will follow it in disposing of cases with the same controlling facts. However, “acquiescence” indicates neither approval nor disapproval of the reasons assigned by the court for its conclusions; whereas, “acquiescence in result only” indicates disagreement or concern with some or all of those reasons. “Nonacquiescence” signifies that, although no further review was sought, the Service does not agree with the holding of the court and, generally, will not follow the decision in disposing of cases involving other taxpayers. In reference to an opinion of a circuit court of appeals, a “nonacquiescence” indicates that the Service will not follow the holding on a nationwide basis. However, the Service will recognize the precedential impact of the opinion on cases arising within the venue of the deciding circuit.

The Actions on Decisions published in the weekly Internal Revenue Bulletin are consolidated semiannually and appear in the first Bulletin for July and the Cumulative Bulletin for the first half of the year. A semiannual consolidation also appears in the first Bulletin for the following January and in the Cumulative Bulletin for the last half of the year.

The Commissioner does NOT ACQUIESCE in the following decision:

William and Sharon Norris v. Commissioner, ^[1]

T.C. Memo. 2011-161

Section 6621 of the Internal Revenue Code establishes the rates for interest on tax overpayments and tax underpayments. Under section 6621(a)(1), the overpayment rate is the sum of the federal short-term rate plus 3 percentage points (2 percentage points in the case of a corporation), except the rate for the portion of a corporate overpayment of tax exceeding $10,000 for a taxable period is the sum of the federal short-term rate plus 0.5 of a percentage point. Under section 6621(a)(2), the underpayment rate is the sum of the federal short-term rate plus 3 percentage points.

Section 6621(c) provides that for purposes of interest payable under section 6601 on any large corporate underpayment, the underpayment rate under section 6621(a)(2) is determined by substituting “5 percentage points” for “3 percentage points.” See section 6621(c) and section 301.6621-3 of the Regulations on Procedure and Administration for the definition of a large corporate underpayment and for the rules for determining the applicable date. Section 6621(c) and section 301.6621-3 are generally effective for periods after December 31, 1990.

Section 6621(b)(1) provides that the Secretary will determine the federal short-term rate for the first month in each calendar quarter. Section 6621(b)(2)(A) provides that the federal short-term rate determined under section 6621(b)(1) for any month applies during the first calendar quarter beginning after that month. Section 6621(b)(2)(B) provides that in determining the addition to tax under section 6654 for failure to pay estimated tax for any taxable year, the federal short-term rate that applies during the third month following the taxable year also applies during the first 15 days of the fourth month following the taxable year. Section 6621(b)(3) provides that the federal short-term rate for any month is the federal short-term rate determined during that month by the Secretary in accordance with section 1274(d), rounded to the nearest full percent (or, if a multiple of 1/2 of 1 percent, the rate is increased to the next highest full percent).

Notice 88-59, 1988-1 C.B. 546, announced that, in determining the quarterly interest rates to be used for overpayments and underpayments of tax under section 6621, the Internal Revenue Service will use the federal short-term rate based on daily compounding because that rate is most consistent with section 6621 which, pursuant to section 6622, is subject to daily compounding.

The federal short-term rate determined in accordance with section 1274(d) during October 2011 is the rate published in Revenue Ruling 2011-25, 2011-45 I.R.B. 695 to take effect beginning November 1, 2011. The federal short-term rate, rounded to the nearest full percent, based on daily compounding determined during the month of October 2011 is 0 percent. Accordingly, an overpayment rate of 3 percent (2 percent in the case of a corporation) and an underpayment rate of 3 percent are established for the calendar quarter beginning January 1, 2012. The overpayment rate for the portion of a corporate overpayment exceeding $10,000 for the calendar quarter beginning January 1, 2012, is 0.5 percent. The underpayment rate for large corporate underpayments for the calendar quarter beginning January 1, 2012, is 5 percent. These rates apply to amounts bearing interest during that calendar quarter.

Under section 6621(b)(2)(B), the 3 percent rate also applies to estimated tax underpayments for the first calendar quarter in 2012 and for the first 15 days in April 2012.

Interest factors for daily compound interest for annual rates of 0.5 percent are published in Appendix A of this Revenue Ruling. Interest factors for daily compound interest for annual rates of 2 percent, 3 percent and 5 percent are published in Tables 57, 59, and 63 of Rev. Proc. 95-17, 1995-1 C.B. 611, 613, and 617.

Annual interest rates to be compounded daily pursuant to section 6622 that apply for prior periods are set forth in the tables accompanying this revenue ruling.

The principal author of this revenue ruling is Deborah Colbert-James of the Office of Associate Chief Counsel (Procedure & Administration). For further information regarding this revenue ruling, contact Ms. Colbert-James at (202) 622-8143 (not a toll-free call).

This notice provides a sample plan amendment that plan sponsors may adopt to satisfy § 436 of the Internal Revenue Code regarding limitations on the accrual and payment of benefits under certain underfunded single employer defined benefit plans. This notice also extends both the deadline to amend a plan to satisfy § 436 and the period during which such an amendment is eligible for relief from the anti-cutback requirements of § 411(d)(6).

The deadline for adopting an interim amendment with respect to § 436 is extended to the latest of:

(1) the last day of the first plan year that begins on or after January 1, 2012,

(2) the last day of the plan year for which § 436 is first effective for the plan, or

(3) the due date (including extensions) of the employer’s tax return for the tax year (determined in accordance with section 5.06(2) of Rev. Proc. 2007-44, in the case of a tax-exempt employer) that contains the first day of the plan year for which § 436 is first effective for the plan.

As noted in section II.B. of this notice, the filing of a determination letter application for an individually designed plan may accelerate one or more interim amendment deadlines that would otherwise apply to the plan. In the case of an application for a determination letter for an individually designed plan that is filed on or after February 1, 2012 (or, in the case of a plan described in section 104 or 105 of PPA ’06, as amended, the first day of the plan year for which § 436 is first effective for the plan, if later), the restated plan that is submitted with the application must incorporate an interim amendment with respect to § 436 and, therefore, the filing of the application before the interim amendment deadline that would otherwise apply to the plan under this section III will accelerate the interim amendment deadline for § 436.

The extension under this section III is conditioned on the amendment being effective as of the effective date of § 436 with respect to the plan and operation of the plan in accordance with the amendment from and after the effective date of the amendment.

Pursuant to § 7805(b) and § 1.411(d)-4, A-2(b)(2)(i), a plan amendment adopted with respect to § 436 that eliminates or reduces a § 411(d)(6) protected benefit within the meaning of § 1.411(d)-4, A-1, does not cause a plan to fail to meet the anti-cutback requirements of § 411(d)(6) if the amendment is adopted by the deadline described in this section III and the elimination or reduction is made only to the extent necessary to enable the plan to meet the requirements of § 436. To the extent that the adoption of the sample amendment in the appendix to this notice by the deadline described in this section III causes the elimination or reduction of a § 411(d)(6) protected benefit under a plan, the elimination or reduction is made only to the extent necessary to enable the plan to meet the requirements of § 436 and therefore does not cause the plan to fail to meet the anti-cutback requirements of § 411(d)(6).

The sample amendment included in the appendix to this notice satisfies the requirements of § 436, as amended by WRERA ’08 and PRA 2010, and the requirements of the final regulations under § 436. Thus, if a plan is amended by adoption of the sample amendment, the terms of the plan will satisfy the requirements of § 436 and the regulations thereunder. The sample amendment may be adopted by sponsors of individually designed plans and by sponsors of pre-approved plans (that is, master and prototype (M&P) and volume submitter plans) on behalf of the pre-approved plans’ adopting employers.

The sample amendment has three parts. The first part contains provisions that are applicable to all plans. This part includes the limitations on benefits and accruals under § 436(b) through (e) that apply when (i) the plan’s AFTAP for the plan year is less than 80 percent (or, in the case of the limitation on certain plan amendments under § 436(c), would be less than 80 percent taking into account the amendment) but not less than 60 percent; (ii) the plan’s AFTAP for the plan year is less than 60 percent (or, in the case of the limitation on unpredictable contingent event benefits under § 436(b), would be less than 60 percent taking into account the occurrence of the event); or (iii) the plan sponsor is in bankruptcy and the plan’s enrolled actuary has not certified the plan’s AFTAP for the plan year to be at least 100 percent. The first part also includes provisions regarding: resumption of accruals and payments and the treatment of amendments that were not allowed to take effect on their effective dates after a relevant limitation ceases to apply; presumptions regarding the plan’s AFTAP that apply before and after the plan’s enrolled actuary issues a certification of the plan’s AFTAP for the plan year; and special rules that apply within the first 5 plan years of a new plan or to a terminating plan or to certain frozen plans. This part also references the requirement in section 101(j) of ERISA to provide participants and beneficiaries written notice when a plan becomes subject to § 436 limitations as well as the rules in § 436(f) and § 1.436-1(f) regarding employer contributions and other methods to avoid or terminate the application of the § 436 limitations to a plan.

The second part of the sample amendment contains two alternative provisions, one of which must be adopted with the first part of the sample amendment in the case of a multiple employer plan. Which of the two provisions must be adopted depends on whether the plan is a multiple employer plan described in § 413(c)(4)(A) or a multiple employer plan described in § 413(c)(4)(B).

The third part of the sample amendment consists of four optional provisions that may be used to modify the first part of the sample amendment. The first two optional provisions allow a participant or beneficiary who is prohibited by § 436(d)(1) or § 436(d)(3), respectively, from electing certain accelerated distribution options to make a new election of a previously prohibited optional form of benefit distribution after the relevant limitation ceases to apply to the plan. The third optional provision expands the choices of timing and form of distribution available to participants and beneficiaries under a plan during a period when accelerated distribution options are limited by § 436(d)(3). The fourth optional provision allows the automatic restoration of benefit accruals that were not permitted to accrue as a result of the application to the plan of § 436(e), provided that certain conditions are satisfied. A plan sponsor may choose to incorporate any or all of these optional provisions by adding them to the appropriate section of the first part of the sample amendment.

A plan sponsor that adopts the sample amendment (or an adopting employer on whose behalf the sample amendment is adopted by the sponsor of a pre-approved plan) has reliance that the form of the amended plan satisfies the requirements of § 436 and that the amendment does not cause the plan to fail to meet the anti-cutback requirements of § 411(d)(6), provided that the sample amendment is adopted by the deadline described in section III of this notice, the terms of the sample amendment are not modified, except as permitted or required below, and the plan is operated in accordance with the amendment from and after the effective date of the amendment. Adoption of the sample amendment will not cause a pre-approved plan adopted by an employer to be treated as individually designed or to fail to be identical to the approved M&P or volume submitter specimen plan.

A plan sponsor’s reliance on the sample amendment is not adversely affected by changes to the sample amendment that are made to conform to a plan’s terminology or organization, provided that the changes do not materially modify the sample amendment by altering the meaning of any provision of the amendment. The sample amendment may be modified without adversely affecting reliance to specify effective dates for any of the optional provisions that are later than the general effective date of the sample amendment, provided that the plan’s operations are consistent with the modified effective date. In the case of a pre-approved plan, the optional provisions of the sample amendment may be incorporated in an amendment to an adoption agreement so that each employer adopting the pre-approved plan may elect whether to include the optional provisions in its plan and may specify when such provisions are effective.

The sample amendment is effective for plan years beginning after December 31, 2007. However, adoption of the sample amendment does not alter a plan sponsor’s ability to rely on the proposed regulations for plan years beginning prior to January 1, 2010, or on Notices 2008-21 and 2008-73, with respect to the operation of a plan. Therefore, if a plan’s operation in plan years beginning after December 31, 2007, and before January 1, 2010, was not consistent with the terms of the sample amendment but satisfies the rules in either the proposed regulations or the final regulations under § 436, or another reasonable interpretation of § 436, the effective date (section 9) of the sample amendment should be changed to plan years beginning after December 31, 2009, and the requirements of § 436 may be incorporated by reference in the terms of the plan for the earlier plan years. This change will not affect the plan sponsor’s ability to rely on the sample amendment.

Plan sponsors of eligible charity plans and other plans affected by the amendments to § 436 and PPA ’06 that were made by PRA 2010 may have operated their plans in a manner that would satisfy § 436 as in effect prior to the enactment of PRA 2010, but that does not satisfy § 401(a) when the amendments made by PRA 2010 are taken into account. The Treasury Department and the Service anticipate issuing guidance that will allow these plan sponsors to correct their plans to take into account the PRA 2010 amendments. These sponsors are not precluded from adopting or relying on the sample amendment for periods during which § 436 applies to their plans.

In the case of certain collectively bargained plans and plans described in sections 104 through 106 of PPA ’06, as amended, the plan sponsor may rely on the sample amendment provided that the effective date of the amendment is changed to the actual effective date of § 436 with respect to the plan. Thus, for example, in the case of an eligible charity plan in existence on July 26, 2005, the effective date of the amendment should be changed to the earlier of the first plan year beginning on or after January 1, 2017, or the first plan year for which the plan ceases to be an eligible charity plan. Alternatively, the effective date of the sample amendment may be changed to provide that the amendment applies to the plan for a plan year beginning after December 31, 2007, and before January 1, 2009, but does not apply to the plan for plan years beginning after December 31, 2008, and before the earlier of January 1, 2017, or the first plan year for which the plan ceases to be an eligible charity plan.

Example

X, a tax-exempt employer, sponsors an eligible charity plan within the meaning of section 104(d) of PPA ’06, as amended, that was in existence on July 26, 2005. The plan year is the calendar year. Pursuant to section 202(b) of PRA 2010, § 436 is not effective with respect to X’s plan until the earlier of the first plan year beginning on or after January 1, 2017, or the first plan year for which the plan ceases to be an eligible charity plan. Section 202(c) of PRA 2010, however, allows X to elect to apply section 202(b) of PRA 2010 to plan years beginning after December 31, 2008, in which case § 436 would be effective with respect to X’s plan for 2008 but not for any subsequent year until the earlier of the first plan year beginning on or after January 1, 2017, or the first plan year for which the plan ceases to be an eligible charity plan.

Assume that X elects to apply section 202(b) of PRA 2010 to plan years beginning after December 31, 2008, thereby making § 436 effective with respect to the plan for 2008, and that the plan continues to be an eligible charity plan. Because § 436 is first effective with respect to X’s plan in 2008, X must adopt an interim amendment to satisfy § 436 by December 31, 2012. If X amends its plan by this deadline by adopting the sample amendment in this notice, X will have reliance that the form of its amended plan satisfies the requirements of § 436 and that the amendment does not cause the plan to fail to meet the anti-cutback requirements of § 411(d)(6), provided that: (1) X modifies the sample amendment to make it effective with respect to the 2008 plan year and with respect to plan years beginning on or after January 1, 2017, or, if earlier, plan years beginning with the first plan year the plan ceases to be an eligible charity plan; and (2) X operates the plan in accordance with the amendment during the periods the amendment is effective.

Alternatively, assume that X does not elect to apply section 202(b) of PRA 2010 to plan years beginning after December 31, 2008, so that § 436 is not effective with respect to X’s plan until the earlier of the first plan year beginning on or after January 1, 2017, or the first plan year for which the plan ceases to be an eligible charity plan. Assuming that the plan continues to be an eligible charity plan, an interim amendment to X’s plan to satisfy § 436 is not required before the later of December 31, 2017, or the due date (including extensions) of X’s tax return for the tax year (determined in accordance with section 5.06(2) of Rev. Proc. 2007-44 (or the successor thereto)) that includes January 1, 2017.

The principal author of this notice is James P. Flannery of the Employee Plans, Tax Exempt and Government Entities Division. Questions regarding this notice may be sent via e-mail to retirementplanquestions@irs.gov.

1. Limitations Applicable If the Plan’s Adjusted Funding Target Attainment Percentage Is Less Than 80 Percent, But Not Less Than 60 Percent. Notwithstanding any other provisions of the plan, if the plan’s adjusted funding target attainment percentage for a plan year is less than 80 percent (or would be less than 80 percent to the extent described in Section 1(b) below) but is not less than 60 percent, then the limitations set forth in this Section 1 apply.

(a) 50 Percent Limitation on Single Sum Payments, Other Accelerated Forms of Distribution, and Other Prohibited Payments. A participant or beneficiary is not permitted to elect, and the plan shall not pay, a single sum payment or other optional form of benefit that includes a prohibited payment with an annuity starting date on or after the applicable section 436 measurement date, and the plan shall not make any payment for the purchase of an irrevocable commitment from an insurer to pay benefits or any other payment or transfer that is a prohibited payment, unless the present value of the portion of the benefit that is being paid in a prohibited payment does not exceed the lesser of:

(i) 50 percent of the present value of the benefit payable in the optional form of benefit that includes the prohibited payment; or

(ii) 100 percent of the PBGC maximum benefit guarantee amount (as defined in § 1.436-1(d)(3)(iii)(C) of the Treasury Regulations).

The limitation set forth in this Section 1(a) does not apply to any payment of a benefit which under § 411(a)(11) of the Internal Revenue Code may be immediately distributed without the consent of the participant. If an optional form of benefit that is otherwise available under the terms of the plan is not available to a participant or beneficiary as of the annuity starting date because of the application of the requirements of this Section 1(a), the participant or beneficiary is permitted to elect to bifurcate the benefit into unrestricted and restricted portions (as described in § 1.436-1(d)(3)(iii)(D) of the Treasury Regulations). The participant or beneficiary may also elect any other optional form of benefit otherwise available under the plan at that annuity starting date that would satisfy the 50 percent/PBGC maximum benefit guarantee amount limitation described in this Section 1(a), or may elect to defer the benefit in accordance with any general right to defer commencement of benefits under the plan.

(b) Plan Amendments Increasing Liability for Benefits. No amendment to the plan that has the effect of increasing liabilities of the plan by reason of increases in benefits, establishment of new benefits, changing the rate of benefit accrual, or changing the rate at which benefits become nonforfeitable shall take effect in a plan year if the adjusted funding target attainment percentage for the plan year is:

(i) Less than 80 percent; or

(ii) 80 percent or more, but would be less than 80 percent if the benefits attributable to the amendment were taken into account in determining the adjusted funding target attainment percentage.

The limitation set forth in this Section 1(b) does not apply to any amendment to the plan that provides a benefit increase under a plan formula that is not based on compensation, provided that the rate of such increase does not exceed the contemporaneous rate of increase in the average wages of participants covered by the amendment.

2. Limitations Applicable If the Plan’s Adjusted Funding Target Attainment Percentage Is Less Than 60 Percent. Notwithstanding any other provisions of the plan, if the plan’s adjusted funding target attainment percentage for a plan year is less than 60 percent (or would be less than 60 percent to the extent described in Section 2(b) below), then the limitations in this Section 2 apply.

(a) Single Sums, Other Accelerated Forms of Distribution, and Other Prohibited Payments Not Permitted. A participant or beneficiary is not permitted to elect, and the plan shall not pay, a single sum payment or other optional form of benefit that includes a prohibited payment with an annuity starting date on or after the applicable section 436 measurement date, and the plan shall not make any payment for the purchase of an irrevocable commitment from an insurer to pay benefits or any other payment or transfer that is a prohibited payment. The limitation set forth in this Section 2(a) does not apply to any payment of a benefit which under § 411(a)(11) of the Internal Revenue Code may be immediately distributed without the consent of the participant.

(b) Shutdown Benefits and Other Unpredictable Contingent Event Benefits Not Permitted to Be Paid. An unpredictable contingent event benefit with respect to an unpredictable contingent event occurring during a plan year shall not be paid if the adjusted funding target attainment percentage for the plan year is:

(i) Less than 60 percent; or

(ii) 60 percent or more, but would be less than 60 percent if the adjusted funding target attainment percentage were redetermined applying an actuarial assumption that the likelihood of occurrence of the unpredictable contingent event during the plan year is 100 percent.

(c) Benefit Accruals Frozen. Benefit accruals under the plan shall cease as of the applicable section 436 measurement date. In addition, if the plan is required to cease benefit accruals under this Section 2(c), then the plan is not permitted to be amended in a manner that would increase the liabilities of the plan by reason of an increase in benefits or establishment of new benefits.

3. Limitations Applicable If the Plan Sponsor Is In Bankruptcy. Notwithstanding any other provisions of the plan, a participant or beneficiary is not permitted to elect, and the plan shall not pay, a single sum payment or other optional form of benefit that includes a prohibited payment with an annuity starting date that occurs during any period in which the plan sponsor is a debtor in a case under title 11, United States Code, or similar Federal or State law, except for payments made within a plan year with an annuity starting date that occurs on or after the date on which the plan’s enrolled actuary certifies that the plan’s adjusted funding target attainment percentage for that plan year is not less than 100 percent. In addition, during such period in which the plan sponsor is a debtor, the plan shall not make any payment for the purchase of an irrevocable commitment from an insurer to pay benefits or any other payment or transfer that is a prohibited payment, except for payments that occur on a date within a plan year that is on or after the date on which the plan’s enrolled actuary certifies that the plan’s adjusted funding target attainment percentage for that plan year is not less than 100 percent. The limitation set forth in this Section 3 does not apply to any payment of a benefit which under § 411(a)(11) of the Internal Revenue Code may be immediately distributed without the consent of the participant.

4. Provisions Applicable After Limitations Cease to Apply. (a) Resumption of Prohibited Payments. If a limitation on prohibited payments under Section 1(a), Section 2(a), or Section 3 applied to the plan as of a section 436 measurement date, but that limit no longer applies to the plan as of a later section 436 measurement date, then that limitation does not apply to benefits with annuity starting dates that are on or after that later section 436 measurement date.

(b) Resumption of Benefit Accruals. If a limitation on benefit accruals under Section 2(c) applied to the plan as of a section 436 measurement date, but that limitation no longer applies to the plan as of a later section 436 measurement date, then benefit accruals shall resume prospectively and that limitation does not apply to benefit accruals that are based on service on or after that later section 436 measurement date, except as otherwise provided under the plan. The plan shall comply with the rules relating to partial years of participation and the prohibition on double proration under Department of Labor regulation 29 CFR § 2530.204-2(c) and (d).

(c) Shutdown and Other Unpredictable Contingent Event Benefits. If an unpredictable contingent event benefit with respect to an unpredictable contingent event that occurs during the plan year is not permitted to be paid after the occurrence of the event because of the limitation of Section 2(b), but is permitted to be paid later in the same plan year (as a result of additional contributions or pursuant to the enrolled actuary’s certification of the adjusted funding target attainment percentage for the plan year that meets the requirements of § 1.436-1(g)(5)(ii)(B) of the Treasury Regulations), then that unpredictable contingent event benefit shall be paid, retroactive to the period that benefit would have been payable under the terms of the plan (determined without regard to Section 2(b)). If the unpredictable contingent event benefit does not become payable during the plan year in accordance with the preceding sentence, then the plan is treated as if it does not provide for that benefit.

(d) Treatment of Plan Amendments That Do Not Take Effect. If a plan amendment does not take effect as of the effective date of the amendment because of the limitation of Section 1(b) or Section 2(c), but is permitted to take effect later in the same plan year (as a result of additional contributions or pursuant to the enrolled actuary’s certification of the adjusted funding target attainment percentage for the plan year that meets the requirements of § 1.436-1(g)(5)(ii)(C) of the Treasury Regulations), then the plan amendment must automatically take effect as of the first day of the plan year (or, if later, the original effective date of the amendment). If the plan amendment cannot take effect during the same plan year, then it shall be treated as if it were never adopted, unless the plan amendment provides otherwise.

5. Notice Requirement. See section 101(j) of ERISA for rules requiring the plan administrator of a single employer defined benefit pension plan to provide a written notice to participants and beneficiaries within 30 days after certain specified dates if the plan has become subject to a limitation described in Section 1(a), Section 2, or Section 3.

6. Methods to Avoid or Terminate Benefit Limitations. See § 436(b)(2), (c)(2), (e)(2), and (f) of the Internal Revenue Code and § 1.436-1(f) of the Treasury Regulations for rules relating to employer contributions and other methods to avoid or terminate the application of the limitations set forth in Sections 1 through 3 for a plan year. In general, the methods a plan sponsor may use to avoid or terminate one or more of the benefit limitations under Sections 1 through 3 for a plan year include employer contributions and elections to increase the amount of plan assets which are taken into account in determining the adjusted funding target attainment percentage, making an employer contribution that is specifically designated as a current year contribution that is made to avoid or terminate application of certain of the benefit limitations, or providing security to the plan.

7. Special Rules. (a) Rules of Operation for Periods Prior to and After Certification of Plan’s Adjusted Funding Target Attainment Percentage. (i) In General. Section 436(h) of the Internal Revenue Code and § 1.436-1(h) of the Treasury Regulations set forth a series of presumptions that apply (1) before the plan’s enrolled actuary issues a certification of the plan’s adjusted funding target attainment percentage for the plan year and (2) if the plan’s enrolled actuary does not issue a certification of the plan’s adjusted funding target attainment percentage for the plan year before the first day of the 10^th month of the plan year (or if the plan’s enrolled actuary issues a range certification for the plan year pursuant to § 1.436-1(h)(4)(ii) of the Treasury Regulations but does not issue a certification of the specific adjusted funding target attainment percentage for the plan by the last day of the plan year). For any period during which a presumption under § 436(h) of the Internal Revenue Code and § 1.436-1(h) of the Treasury Regulations applies to the plan, the limitations under Sections 1 through 3 are applied to the plan as if the adjusted funding target attainment percentage for the plan year were the presumed adjusted funding target attainment percentage determined under the rules of § 436(h) of the Internal Revenue Code and § 1.436-1(h)(1), (2), or (3) of the Treasury Regulations. These presumptions are set forth in Section 7(a)(ii) though (iv).

(ii) Presumption of Continued Underfunding Beginning First Day of Plan Year. If a limitation under Section 1, 2, or 3 applied to the plan on the last day of the preceding plan year, then, commencing on the first day of the current plan year and continuing until the plan’s enrolled actuary issues a certification of the adjusted funding target attainment percentage for the plan for the current plan year, or, if earlier, the date Section 7(a)(iii) or Section 7(a)(iv) applies to the plan:

(1) The adjusted funding target attainment percentage of the plan for the current plan year is presumed to be the adjusted funding target attainment percentage in effect on the last day of the preceding plan year; and

(2) The first day of the current plan year is a section 436 measurement date.

(iii) Presumption of Underfunding Beginning First Day of 4^th Month. If the plan’s enrolled actuary has not issued a certification of the adjusted funding target attainment percentage for the plan year before the first day of the 4^th month of the plan year and the plan’s adjusted funding target attainment percentage for the preceding plan year was either at least 60 percent but less than 70 percent or at least 80 percent but less than 90 percent, or is described in § 1.436-1(h)(2)(ii) of the Treasury Regulations, then, commencing on the first day of the 4^th month of the current plan year and continuing until the plan’s enrolled actuary issues a certification of the adjusted funding target attainment percentage for the plan for the current plan year, or, if earlier, the date Section 7(a)(iv) applies to the plan:

(1) The adjusted funding target attainment percentage of the plan for the current plan year is presumed to be the plan’s adjusted funding target attainment percentage for the preceding plan year reduced by 10 percentage points; and

(2) The first day of the 4^th month of the current plan year is a section 436 measurement date.

(iv) Presumption of Underfunding On and After First Day of 10^th Month. If the plan’s enrolled actuary has not issued a certification of the adjusted funding target attainment percentage for the plan year before the first day of the 10^th month of the plan year (or if the plan’s enrolled actuary has issued a range certification for the plan year pursuant to § 1.436-1(h)(4)(ii) of the Treasury Regulations but has not issued a certification of the specific adjusted funding target attainment percentage for the plan by the last day of the plan year), then, commencing on the first day of the 10^th month of the current plan year and continuing through the end of the plan year:

(1) The adjusted funding target attainment percentage of the plan for the current plan year is presumed to be less than 60 percent; and

(2) The first day of the 10^th month of the current plan year is a section 436 measurement date.

(b) New Plans, Plan Termination, Certain Frozen Plans, and Other Special Rules. (i) First 5 Plan Years. The limitations in Section 1(b), Section 2(b), and Section 2(c) do not apply to a new plan for the first 5 plan years of the plan, determined under the rules of § 436(i) of the Internal Revenue Code and § 1.436-1(a)(3)(i) of the Treasury Regulations.

(ii) Plan Termination. The limitations on prohibited payments in Section 1(a), Section 2(a), and Section 3 do not apply to prohibited payments that are made to carry out the termination of the plan in accordance with applicable law. Any other limitations under this section of the plan do not cease to apply as a result of termination of the plan.

(iii) Exception to Limitations on Prohibited Payments Under Certain Frozen Plans. The limitations on prohibited payments set forth in Sections 1(a), 2(a), and 3 do not apply for a plan year if the terms of the plan, as in effect for the period beginning on September 1, 2005, and continuing through the end of the plan year, provide for no benefit accruals with respect to any participants. This Section 7(b)(iii) shall cease to apply as of the date any benefits accrue under the plan or the date on which a plan amendment that increases benefits takes effect.

(iv) Special Rules Relating to Unpredictable Contingent Event Benefits and Plan Amendments Increasing Benefit Liability. During any period in which none of the presumptions under Section 7(a) apply to the plan and the plan’s enrolled actuary has not yet issued a certification of the plan’s adjusted funding target attainment percentage for the plan year, the limitations under Section 1(b) and Section 2(b) shall be based on the inclusive presumed adjusted funding target attainment percentage for the plan, calculated in accordance with the rules of § 1.436-1(g)(2)(iii) of the Treasury Regulations.

(c) Special Rules Under PRA 2010. (i) Payments Under Social Security Leveling Options. For purposes of determining whether the limitations under Section 1(a) or 2(a) apply to payments under a social security leveling option, within the meaning of § 436(j)(3)(C)(i) of the Internal Revenue Code, the adjusted funding target attainment percentage for a plan year shall be determined in accordance with the “Special Rule for Certain Years” under § 436(j)(3) of the Internal Revenue Code and any Treasury Regulations or other published guidance thereunder issued by the Internal Revenue Service.

(ii) Limitation on Benefit Accruals. For purposes of determining whether the accrual limitation under Section 2(c) applies to the plan, the adjusted funding target attainment percentage for a plan year shall be determined in accordance with the “Special Rule for Certain Years” under § 436(j)(3) of the Internal Revenue Code (except as provided under section 203(b) of the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010, if applicable).

(d) Interpretation of Provisions. The limitations imposed by this section of the plan shall be interpreted and administered in accordance with § 436 of the Internal Revenue Code and § 1.436-1 of the Treasury Regulations.

8. Definitions. The definitions in the following Treasury Regulations apply for purposes of Sections 1 through 7: § 1.436-1(j)(1) defining adjusted funding target attainment percentage; § 1.436-1(j)(2) defining annuity starting date; § 1.436-1(j)(6) defining prohibited payment; § 1.436-1(j)(8) defining section 436 measurement date; and § 1.436-1(j)(9) defining an unpredictable contingent event and an unpredictable contingent event benefit.

9. Effective Date. The rules in Sections 1 through 8 are effective for plan years beginning after December 31, 2007.

If the plan is a multiple employer plan, one of the following two provisions must be added to Part I of the sample plan amendment, depending on whether § 413(c)(4)(A) of the Internal Revenue Code applies to the plan.

A multiple employer plan to which § 413(c)(4)(A) of the Internal Revenue Code applies, including a plan for which the election described in § 413(c)(4)(B) has been made, must add the following provision to Part I of the sample amendment:

The rules in Sections 1 through 8 apply separately to each employer under the plan, as if each such employer maintained a separate plan.

A multiple employer plan to which § 413(c)(4)(A) of the Internal Revenue Code does not apply must add the following provision to Part I of the sample amendment:

The rules in Sections 1 through 8 apply as if all participants in the plan are employed by a single employer.

The following are optional provisions that may be added to Part I of the sample amendment:

Optional Provision to Allow Full Single Sum Payments for Participants and Beneficiaries Who Previously Could Only Elect Half Single Sums (to be added to Section 4(a)):

In addition, after the section 436 measurement date on which the limitation on prohibited payments under Section 1(a) ceases to apply to the plan, any participant or beneficiary who had an annuity starting date within the period during which that limitation applied to the plan is permitted to make a new election (within 90 days after the section 436 measurement date on which the limit ceases to apply or, if later, 30 days after receiving notice of the right to make such election) under which the form of benefit previously elected is modified at a new annuity starting date to be changed to a single sum payment for the remaining value of the participant or beneficiary’s benefit under the plan, subject to the other rules in this section of the plan and applicable requirements of § 401(a) of the Internal Revenue Code, including spousal consent.

Optional Provision to Allow Half Single Sum Payments for Participants and Beneficiaries Who Could Not Elect Single Sums (to be added to Section 4(a)):

In addition, after the section 436 measurement date on which the limitation on prohibited payments under Section 2(a) ceases to apply to the plan, any participant or beneficiary who had an annuity starting date within the period during which that limitation applied to the plan is permitted to make a new election (within 90 days after the section 436 measurement date on which the limit ceases to apply or, if later, 30 days after receiving notice of the right to make such election) under which the form of benefit previously elected is modified at a new annuity starting date to be changed to a single sum payment for the remaining value of the participant’s or beneficiary’s benefit under the plan, subject to the other rules in this section of the plan (including Section 1(a)) and applicable requirements of § 401(a) of the Internal Revenue Code, including spousal consent.

Optional Provision to Allow Special Optional Forms of Benefit When Only Half Single Sum Payments Are Permitted to be Paid (to be added to Section 1(a)):

During a period when Section 1(a) applies to the plan, participants and beneficiaries are permitted to elect payment in any optional form of benefit otherwise available under the plan that provides for the current payment of the unrestricted portion of the benefit (as described in § 1.436-1(d)(3)(iii)(D) of the Treasury Regulations), with a delayed commencement for the restricted portion of the benefit (subject to other applicable qualification requirements, such as §§ 411(a)(11) and 401(a)(9) of the Internal Revenue Code).

Optional Provision to Restore Accruals (to be added to Section 4(b)):

In addition, benefit accruals that were not permitted to accrue because of the application of Section 2(c) shall be restored when that limitation ceases to apply if the continuous period of the limitation was 12 months or less and the plan’s enrolled actuary certifies that the adjusted funding target attainment percentage for the plan year would not be less than 60 percent taking into account any restored benefit accruals for the prior plan year.

This notice contains the 2011 Cumulative List of Changes in Plan Qualification Requirements (2011 Cumulative List) described in section 4 of Rev. Proc. 2007-44, 2007-2 C.B. 54. The 2011 Cumulative List is to be used by plan sponsors and practitioners submitting determination letter applications for plans during the period beginning February 1, 2012 and ending January 31, 2013. These plans will primarily be single employer individually designed defined contribution plans, including employee stock ownership plans (ESOPs), single employer individually designed defined benefit plans, and multiple employer individually designed plans that are in Cycle B. Generally, an individually designed plan is in Cycle B if the last digit of the employer identification number of the plan sponsor is 2 or 7.

The list of changes in section IV of this notice does not extend the deadline by which a plan must be amended to comply with any statutory, regulatory, or guidance changes. The general deadline for timely adoption of an interim or discretionary amendment can be found in section 5.05 of Rev. Proc. 2007-44.

Rev. Proc. 2007-44 sets forth procedures for issuing opinion, advisory, and determination letters and describes the five-year remedial amendment cycle for individually designed plans and the six-year remedial amendment cycle for pre-approved plans. In addition, section 5.05 of Rev. Proc. 2007-44 provides the deadline for timely adoption of an interim amendment or discretionary amendment.

Under section 4 of Rev. Proc. 2007-44, the Internal Revenue Service announced its intention to annually publish a Cumulative List to identify statutory, regulatory, and guidance changes that must be taken into account in submissions by plan sponsors to the Service requesting opinion, advisory, and determination letters whose submission period begins on February 1st following issuance of the Cumulative List.

In Notice 2010-90, 2010-52 I.R.B. 909, the Service published the 2010 Cumulative List of Changes in Plan Qualification Requirements (2010 Cumulative List).^[2]

This notice is being issued in conjunction with the determination letter program for individually designed plans eligible for Cycle B. In accordance with Rev. Proc. 2007-44, the Service will start accepting determination letter applications for Cycle B individually designed plans beginning on February 1, 2012. The 12-month submission period for Cycle B plans will end January 31, 2013.

The 2011 Cumulative List, set forth in section IV of this notice, informs plan sponsors of issues the Service has specifically identified for review in determining whether a plan filing in Cycle B has been properly updated. Specifically, the 2011 Cumulative List reflects law changes under the Pension Protection Act of 2006 (PPA ’06), Pub. L. 109-280, the U.S. Troop Readiness, Veterans’ Care, Katrina Recovery, and Iraq Accountability Appropriations Act, 2007, Pub. L. 110-28, the Heroes Earnings Assistance and Relief Tax Act of 2008 (HEART Act), Pub. L. 110-245, the Worker, Retiree, and Employer Recovery Act of 2008 (WRERA), Pub. L. 110-458, the Small Business Jobs Act of 2010 (SBJA), Pub. L. 111-240, and the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010 (PRA 2010), Pub. L. No. 111-192.

Except as provided below, the Service will not consider in its review of any determination letter application for the submission period that begins February 1, 2012, any:

However, in order to be qualified, a plan must comply with all relevant qualification requirements, not just those on the 2011 Cumulative List.

The 2011 Cumulative List includes the following guidance issued after October 1, 2011:

Notice 2011-85, 2011-44 I.R.B. 605, announced that the Treasury Department and the Service intend to amend the 2010 final hybrid plan regulations to postpone the effective/applicability date of § 1.411(b)(5)-1(d)(1)(iii), (d)(1)(vi), and (d)(6)(i) to plan years that begin on or after a date to be specified in those regulations that is not earlier than January 1, 2013. Notice 2011-85 also extends the deadline for adopting an interim or discretionary plan amendment under § 411(a)(13) (other than § 411(a)(13)(A)) and § 411(b)(5).

The Service’s review of a determination letter application filed in the Cycle B submission period will not consider the 2010 final hybrid plan regulations (other than with respect to § 411(a)(13)(A)) unless the plan has been amended to satisfy those regulations. For this purpose, the Service will only consider those provisions of the regulations that are effective for plan years beginning on or after January 1, 2011.

With respect to matters addressed by proposed regulations identified in the footnotes of section IV of this notice, the Service’s review of the plan will be based on a reasonable interpretation of the statute, existing final regulations, or other published guidance. For this purpose, compliance with proposed regulations will be treated as meeting that standard. However, a determination letter cannot be relied on with respect to whether the plan complies with the proposed regulations.

Terminating plans must include all law changes in effect at the time of termination. See section 8 of Rev. Proc. 2007-44 regarding plan termination.

The following list consists of statutory provisions and associated guidance which reflect changes to plan qualification requirements. Miscellaneous guidance is also provided. The Service has identified below plan qualification requirements which were not on the 2010 or earlier Cumulative Lists as “(New).”

All items from the 2005 and 2006 Cumulative Lists have been deleted from the 2011 Cumulative List. Thus, the 2011 Cumulative List contains those plan qualification requirements listed in the 2007, 2008, 2009, and 2010 Cumulative Lists, as well as additional 2011 plan qualification requirements. These deletions have been made to enhance the utility of the cumulative list, by removing items that would have been previously reviewed in the case of a plan that was submitted during the initial Cycle B submission period (February 1, 2007 - January 31, 2008). However, if a plan has not been previously reviewed for items on earlier cumulative lists, the items from the earlier cumulative lists must be taken into account. For example, a new plan that was established after the Cycle B submission period would be reviewed for items on the 2004 Cumulative List.

The following guidance contains sample or model amendments: Notice 2009-65, 2009-39 I.R.B. 413 (automatic contribution features); Notice 2009-82, 2009-41 I.R.B. 491 (suspension of the minimum distribution requirement for 2009); and Rev. Rul. 2011-1, 2011-2 I.R.B. 251 (group trusts).

The principal author of this notice is Angelique Carrington of the Employee Plans, Tax Exempt and Government Entities Division. For further information regarding this notice, please contact the Employee Plans taxpayer assistance answering service at 1-877-829-5500 (a toll-free number) or e-mail Ms. Carrington at RetirementPlanQuestions@irs.gov.

This notice provides guidance as to the corporate bond weighted average interest rate and the permissible range of interest rates specified under § 412(b)(5)(B)(ii)(II) of the Internal Revenue Code as in effect for plan years beginning before 2008. It also provides guidance on the corporate bond monthly yield curve (and the corresponding spot segment rates), and the 24-month average segment rates under § 430(h)(2). 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, the 30-year Treasury weighted average rate under § 431(c)(6)(E)(ii)(I), and the minimum present value segment rates under § 417(e)(3)(D) as in effect for plan years beginning after 2007.

Sections 412(b)(5)(B)(ii) and 412(l)(7)(C)(i), as amended by the Pension Funding Equity Act of 2004 and by the Pension Protection Act of 2006 (PPA), provide that the interest rates used to calculate current liability and to determine the required contribution under § 412(l) for plan years beginning in 2004 through 2007 must be within a permissible range based on the weighted average of the rates of interest on amounts invested conservatively in long term investment grade corporate bonds during the 4-year period ending on the last day before the beginning of the plan year.

Notice 2004-34, 2004-1 C.B. 848, provides guidelines for determining the corporate bond weighted average interest rate and the resulting permissible range of interest rates used to calculate current liability. That notice establishes that the corporate bond weighted average is based on the monthly composite corporate bond rate derived from designated corporate bond indices. The methodology for determining the monthly composite corporate bond rate as set forth in Notice 2004-34 continues to apply in determining that rate. See Notice 2006-75, 2006-2 C.B. 366.

The composite corporate bond rate for November 2011 is 4.70 percent. Pursuant to Notice 2004-34, the Service has determined this rate as the average of the monthly yields for the included corporate bond indices for that month.

The following corporate bond weighted average interest rate was determined for plan years beginning in the month shown below.

Generally for plan years beginning after 2007 (except for delayed effective dates for certain plans under sections 104, 105, and 106 of PPA), § 430 of the Code specifies the minimum funding requirements that apply to single employer plans pursuant to § 412. Section 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. However, an election may be made under § 430(h)(2)(D)(ii) to use the monthly yield curve in place of the segment rates. Section 430(h)(2)G) set forth a transitional rule applicable to plan years beginning in 2008 and 2009 under which the segment rates were blended with the corporate bond weighted average described above, including an election under § 430(h)(2)(G)(iv) for an employer to use the segment rates without the transitional rule.

Notice 2007-81, 2007-2 C.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. Pursuant to Notice 2007-81, the monthly corporate bond yield curve derived from November 2011 data is in Table I at the end of this notice. The spot first, second, and third segment rates for the month of November 2011 are, respectively, 1.99, 4.47, and 5.26. The three 24-month average corporate bond segment rates applicable for December 2011 are as follows:

The transitional rule of § 430(h)(2)(G) does not apply to plan years beginning after December 31, 2009. Therefore, for a plan year beginning after 2009 with a lookback month to December 2011, the funding segment rates are the three 24-month average corporate bond segment rates applicable for December 2011, listed above without blending for any transitional period.

Section 417(e)(3)(A)(ii)(II) (prior to amendment by PPA) defines the applicable interest rate, which must be used for purposes of determining the minimum present value of a participant’s benefit under § 417(e)(1) and (2), as the annual rate of interest on 30-year Treasury securities for the month before the date of distribution or such other time as the Secretary may by regulations prescribe. Section 1.417(e)-1(d)(3) of the Income Tax Regulations provides that the applicable interest rate for a month is the annual rate of interest on 30-year Treasury securities as specified by the Commissioner for that month in revenue rulings, notices or other guidance published in the Internal Revenue Bulletin.

The rate of interest on 30-year Treasury securities for November 2011 is 3.02 percent. The Service has determined this rate as the average of the yield on the 30-year Treasury bond maturing in August 2041 determined each day through November 9, 2011, and the yield on the 30-year Treasury bond maturing in November 2041 determined each day for the balance of the month.

Generally for plan years beginning after 2007, § 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 section 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 following rates were determined for plan years beginning in the month shown below.

Generally for plan years beginning after December 31, 2007, the applicable interest rates under § 417(e)(3)(D) are segment rates computed without regard to a 24-month average. For plan years beginning in 2008 through 2011, the applicable interest rates are the monthly spot segment rates blended with the applicable rate under § 417(e)(3)(A)(ii)(II) as in effect for plan years beginning in 2007. Notice 2007-81 provides guidelines for determining the minimum present value segment rates. Pursuant to that notice, the minimum present value transitional segment rates determined for November 2011, taking into account the November 2011 30-year Treasury rate of 3.02 stated above, are as follows:

The principal author of this notice is Tony Montanaro of the Employee Plans, Tax Exempt and Government Entities Division. Mr. Montanaro may be e-mailed at RetirementPlanQuestions@irs.gov.

This notice requests comments regarding when (and under what circumstances) transfers by a trustee of all or a portion of the principal of an irrevocable trust (Distributing Trust) to another irrevocable trust (Receiving Trust), sometimes called “decanting,” that result in a change in the beneficial interests in the trust are not subject to income, gift, estate, and/or generation-skipping transfer (GST) taxes. In these transfers, the interests of one or more of the beneficiaries may be changed and, in some cases, the interest of a beneficiary may be terminated and/or another beneficiary who did not have an interest in Distributing Trust may receive an interest in Receiving Trust.

The Treasury Department and the Internal Revenue Service (IRS) are studying the tax implications of such transfers when there is a change in the beneficial interests in the trust and are considering approaches to addressing some or all of the relevant tax issues in published guidance. While these issues are under study, the IRS will not issue private letter rulings (PLRs) with respect to such transfers that result in a change in beneficial interests. See Sections 5.09, 5.16, and 5.17 of Rev. Proc. 2011-3, 2011-1 I.R.B. 111. The IRS generally will continue to issue PLRs with respect to such transfers that do not result in a change to any beneficial interests and do not result in a change in the applicable rule against perpetuities period.

The Treasury Department and the IRS invite comments from the public regarding the income, gift, estate and GST tax issues and consequences arising from transfers by a trustee of all or a portion of the principal of a Distributing Trust to a Receiving Trust that change beneficial interests. The Treasury Department and IRS also invite comments as to the relevance and effect of the various facts and circumstances listed below and the identification of other factors that may affect the tax consequences. The facts and circumstances that the Treasury Department and the IRS have identified as potentially affecting one or more tax consequences include the following:

1. A beneficiary’s right to or interest in trust principal or income is changed (including the right or interest of a charitable beneficiary);

2. Trust principal and/or income may be used to benefit new (additional) beneficiaries;

3. A beneficial interest (including any power to appoint income or corpus, whether general or limited, or other power) is added, deleted, or changed;

4. The transfer takes place from a trust treated as partially or wholly owned by a person under §§ 671 through 678 of the Internal Revenue Code (a “grantor trust”) to one which is not a grantor trust, or vice versa;

5. The situs or governing law of the Receiving Trust differs from that of the Distributing Trust, resulting in a termination date of the Receiving Trust that is subsequent to the termination date of the Distributing Trust;

6. A court order and/or approval of the state Attorney General is required for the transfer by the terms of the Distributing Trust and/or applicable law;

7. The beneficiaries are required to consent to the transfer by the terms of the Distributing Trust and/or applicable local law;

8. The beneficiaries are not required to consent to the transfer by the terms of the Distributing Trust and/or applicable local law;

9. Consent of the beneficiaries and/or a court order (or approval of the state Attorney General) is not required but is obtained;

10. The effect of state law or the silence of state law on any of the above scenarios;

11. A change in the identity of a donor or transferor for gift and/or GST tax purposes;

12. The Distributing Trust is exempt from GST tax under § 26.2601-1, has an inclusion ratio of zero under § 2632, or is exempt from GST under § 2663; and

13. None of the changes described above are made, but a future power to make any such changes is created.

The Treasury Department and the IRS encourage the public to suggest a definition for the type of transfer (“decanting”) this guidance is intended to address. Additionally, the public is encouraged to comment on the tax consequences of such transfers in the context of domestic trusts, the domestication of foreign trusts, transfers to foreign trusts, and on any other relevant facts or combination of facts not included in the above list.

Written comments are encouraged to be submitted by April 25, 2012. All comments will be available for public inspection and copying and should include a reference to this Notice 2011-101. Comments may be submitted in one of three ways:

(1) By mail to CC:PA:LPD:PR (Notice 2011-101), Room 5203, Internal Revenue Service, P.O. Box 7604, Ben Franklin Station, Washington, DC 20044.

(2) Electronically to Notice.Comments@irscounsel.treas.gov. Please include “Notice 2011-101” in the subject line of any electronic communications.

(3) By hand-delivery Monday through Friday between the hours of 8 a.m. and 4 p.m. to CC:PA:LPD:PR (Notice 2011-101), Courier’s Desk, Internal Revenue Service, 1111 Constitution Ave., NW, Washington, DC 20224.

The principal author of this notice is Juli Ro Kim of the Office of Associate Chief Counsel (Passthroughs & Special Industries). For further information regarding this notice, contact Juli Ro Kim at (202) 622-3090 (not a toll-free call).

Under authority contained in the Social Security Act (Act), the Commissioner, Social Security Administration, has determined and announced (76 F.R. 66111, dated October 25, 2011) that the contribution and benefit base for renumeration paid in 2012, and self-employment income earned in taxable years beginning in 2012 is $110,100.