Additional Limitations on Suspension of Benefits in Multiemployer Plans

The IRS has proposed a regulation setting forth additional limitations on suspension of benefits in certain multiemployer pension plans.

Document Excerpt

ACTION: Notice of proposed rulemaking and notice of public hearing.
SUMMARY: The Multiemployer Pension Reform Act of 2014 (“MPRA”), which was enacted by Congress as part of the Consolidated and Further Continuing Appropriations Act of 2015, relates to multiemployer defined benefit pension plans that are projected to have insufficient funds, within a specified timeframe, to pay the full plan benefits to which individuals will be entitled (referred to as plans in “critical and declining status”). Under MPRA, the sponsor of such a plan is permitted to reduce the pension benefits payable to plan participants and beneficiaries if certain conditions and limitations are satisfied (referred to in MPRA as a “suspension of benefits”). One specific limitation governs the application of a suspension of benefits under any plan that includes benefits directly attributable to a participant’s service with any employer that has withdrawn from the plan in a complete withdrawal, paid its full withdrawal liability, and,
pursuant to a collective bargaining agreement, assumed liability for providing benefits to
participants and beneficiaries equal to any benefits for such participants and
beneficiaries reduced as a result of the financial status of the plan. This document contains proposed regulations that would provide guidance relating to this specific limitation. March 15, 2016.


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