The Internal Revenue Service (IRS) has issued a notice of public hearing about proposed regulations relating to the administration of a multiemployer plan participant vote on an approved suspension of benefits under the Multiemployer Pension Reform Act (MPRA).
The terms of MPRA extended earlier guidance created under the Pension Protection Act (PPA), to allow plans critical or declining status to avoid insolvency by reasonably cutting benefits, including those already in pay status. A critical part of the benefits reduction process involves an approval vote, by simple majority, from the plan population. After first requiring approval from the Department of Labor, the Pension Benefit Guaranty Corporation (PBGC) and the Department of the Treasury, benefit suspensions will only go into effect if a majority of all participants vote to approve them.
The IRS published temporary regulations and proposed final regulations about the participant voting process in early September.
A month later, the Teamsters Central States, Southeast and Southwest Areas Pension Fund announced a “Rescue Plan” to members that includes a request to the Department of the Treasury to allow benefit reductions.
During an industry conference in October, J. Mark Iwry, senior adviser to the secretary and deputy assistant secretary for retirement and health policy at the U.S. Department of Treasury, said the idea behind the suspension of benefits provision in MPRA is that employees would get more benefits if the amount were reduced than they would if the multiemployer plan becomes insolvent and cannot pay any benefits.The public hearing is being held Friday, December 18, at 10 a.m. The IRS must receive outlines of the topics to be discussed at the public hearing by Monday, November 30. More information is here.