Funding Waiver Applications

[Guest jerry2575]

I have a client that has already received funding waivers in past years, and for which we submitted a waiver application for 2002. The client recently informed us that they may be able to find the funds to satisfy 2002's requirement.

Has anyone ever rescinded an application for a funding waiver?

Does rescinding the application have any effect on the three waivers in fifteen years rule?

Are there any other consequences to rescinding an application currently before the IRS and PBGC???

Thanks for your help!

[david rigby]

Interesting. Since you say "...may be able to find the funds...", why not just ignore the possibility of rescinding the waiver application? If the sponsor has the cash available (on a timely basis), then make the contribution; the waiver will still be amortized, but you get a credit balance. All the administrative expense has already been incurred anyway.

My guess is that a rescinded waiver would not count against your 3-times limit, but maybe someone else has seen this happen. (I doubt the IRS will refund the user fee.)

[mwyatt]

Actually, we just had a plan that we filed for an application last December, and the IRS indicated that they were not inclined to grant a waiver (I guess the client wasn't hurting bad enough). After a few conferences, the client came to the conclusion that it was going to be less costly, especially given prevailing interest rates, to tap into a line of credit rather than have the same loan effectively granted if the waiver was approved at the higher valuation rate. We then asked for the application to be withdrawn (of course the user fee was down the drain). Probably better to withdraw the application than to have a disapproved application on the books.