The Internal Revenue Service (IRS) and Department of the Treasury (Treasury) released final regulations detailing suspension of benefits under the Multiemployer Pension Reform Act of 2014 (MPRA) for multiemployer defined benefit plans in critical and declining status.
In the case of a plan with 10,000 or more participants, the final rule requires the plan sponsor to select a plan participant in pay status to act as a retiree representative. The retiree representative is required to advocate for the interests of the retired and deferred vested participants and beneficiaries of the plan throughout the suspension approval process. The plan must provide for the retiree representative’s reasonable expenses including reasonable legal and actuarial support, commensurate with the plan’s size and funded status.
According to the final rule, any suspension will remain in effect until the earlier of when the plan sponsor provides benefit improvements or when the suspension expires by its own terms.
The final rule also includes limitations on suspensions, requirements for benefit improvements, notice requirements and details of the approval or rejection process.
Along with the final rule, the IRS issued Revenue Procedure 2016-27 which describes application procedures for suspension of benefits.The final rules are effective on April 28, 2016, and apply to suspensions for which the approval or denial is issued on or after April 26, 2016.
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