Notice 2006-105

Part III. Administrative, Procedural, and Miscellaneous
Extension of Election of
Alternative Deficit Reduction
Contribution
Notice 2006–105
This notice sets forth the procedures
for electing an alternative deficit reduction
contribution under § 412(l)(12) of the Internal Revenue Code (the Code) (which
was added by section 102 of the Pension
Funding Equity Act of 2004 (PFEA), Pub.
L. No. 108–218), as modified by section
402(i) of the Pension Protection Act of
2006 (PPA), Pub. L. No. 109–280. Except as outlined below, all references to
the Code and the Employee Retirement Income Security Act of 1974 (ERISA) are to
the Code and ERISA as in effect on August
16, 2006.
I. Background
Section 412(l)(12) of the Code permits certain employers who are required
to make additional contributions under
§ 412(l) to elect a reduced amount of those
contributions (“alternative deficit reduction contributions”) for plan years beginning after December 27, 2003, and before
December 28, 2005. Section 412(l)(12) is
generally limited to a plan maintained by
either (1) a commercial passenger airline
or (2) an employer primarily engaged in
the production or manufacture of a steel
mill product or the processing of iron ore
pellets.1 Section 302(d)(12) of ERISA
permits an identical election and provides
identical requirements with respect to the
minimum funding standard of section 302.

1

Announcement 2004–38, 2004–1 C.B.
878, provides procedures for electing an
alternative deficit reduction contribution
including a model election form. Announcement 2004–43, 2004–1 C.B. 955,
provides guidance on the types of notices
that must be given by an employer to plan
participants and their beneficiaries and to
the Pension Benefit Guaranty Corporation (the PBGC) if that employer elects
to make an alternative deficit reduction
contribution described in Announcement
2004–38. In addition, Announcement
2004–43, as corrected by Announcement
2004–51, 2004–1 C.B. 1041, sets forth
timing requirements for the election. Notice 2004–59, 2004–2 C.B. 447, provides
guidance on the restrictions that are placed
on plan amendments following an employer’s election of an alternative deficit
reduction contribution under § 412(l)(12)
of the Code and section 302(d)(12) of
ERISA.
Section 402(i) of PPA extended the alternative deficit reduction election for certain employers. The extension under the
PPA is limited to an eligible employer that
is a commercial passenger airline, can be
made for any plan year beginning after
December 27, 2003, and before December 28, 2007, and applies without regard
to the two plan year limit contained in
§ 412(l)(12)(D)(ii) of the Code.
Other than as necessary to reflect the
statutory narrowing of the class of eligible
employers, the elimination of the two-year
rule and the extension of time described in
the preceding paragraph, all of the guidance described above with respect to the
election under PFEA remains applicable

to the election under section 402(i) of
the PPA with the following exceptions.
Notwithstanding the requirement under
Announcement 2004–43 that any alternative deficit reduction contribution election
be made by the end of the first quarter of
the plan year, if, on or before December
21, 2006, an employer makes an alternative deficit reduction contribution election
for the first plan year beginning on or after
December 28, 2005, that election will be
deemed timely. In addition, if an employer
issues a PBGC notice for a plan for such a
plan year on or before December 21, 2006,
the PBGC will treat the PBGC notice as
timely issued. The content of the PBGC
notice should reflect a reasonable effort to
make any appropriate modifications to the
projections in order to take into account
the enactment of the PPA.
Section III of this notice sets forth the
information that must be contained in the
election and the address to which the election must be sent. If an employer elects
an alternative deficit reduction contribution for any plan year, the employer must
provide written notice of the election to the
plan’s participants and beneficiaries and
(except to the extent that an earlier notice
is required by the preceding paragraph) to
the PBGC within 30 days of filing the election.
II. Effect on Other Documents
Announcement 2004–38 is modified,
Announcement 2004–43 is amplified and
modified, and Notice 2004–59 is amplified.

An eligible employer under PFEA (but not PPA) also included an organization described in § 501(c)(5) of the Code that established a plan on June 30, 1955, to which § 412 now applies.

December 11, 2006

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2006–50 I.R.B.

III. Election of Alternative Deficit Reduction Contribution for Commercial Passenger Airlines
A. As an officer of the employer maintaining the plan, I hereby elect an alternative deficit reduction contribution under
§ 412(l)(12) of the Code and section 302(d)(12) of ERISA and include the following information:
1. The name and EIN of the employer:
2. The name and plan number of the plan:
3. The plan year to which the election relates:
4. Specify the plan year beginning in 2000 for which the additional contributions under § 412(l) did not
apply:
5. If any of the information in items 1 or 2 was different for the 2000 plan year than in the plan year for which the election
is being made, enter the plan name, plan number, and name and EIN of the employer for the 2000 plan year:

6. Signature of employer

Date

The election must be signed by an officer of the employer maintaining the plan. An authorized representative of the
employer, plan administrator, or enrolled actuary may not sign this election on behalf of the employer.
B. This election must be filed at the following address:
Internal Revenue Service
Commissioner, Tax Exempt and Government Entities Division
Attention: SE:T:EP:RA:T
Alternative DRC Election
P.O. Box 27063
McPherson Station
Washington, D.C. 20038
Drafting Information
The principal author of this notice is
Michael Rubin of the Employee Plans,
Tax Exempt and Government Entities Di-

2006–50 I.R.B.

vision. For further information regarding
this notice, please contact the Employee
Plans taxpayer assistance telephone service at (877) 829–5500 (a toll-free number) between the hours of 8:30 am and

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4:30 pm Eastern Time, Monday through
Friday. Mr. Rubin may be reached at
(202) 283–9888 (not a toll-free number).

December 11, 2006