Additional limits on suspension of benefits | KPMG | GLOBAL

Additional limits on suspension of benefits, certain pension plans

Additional limits on suspension of benefits

The Treasury Department and IRS today released for publication in the Federal Register proposed regulations (REG-101701-16) that provide guidance relating to the additional limitation on the suspension of benefits applicable to certain pension plans under the Multiemployer Pension Reform Act of 2014.


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The Multiemployer Pension Reform Act of 2014 (MPRA), enacted 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 the MPRA provisions, the sponsor of a plan in “critical and declining status" is permitted to reduce the pension benefits payable to plan participants and beneficiaries if certain conditions and limitations are satisfied (this is referred to as a “suspension of benefits”).

In the new proposed regulations, Treasury and the IRS address the interaction between the suspension of benefits rules and the benefits under a multiple employer plan that holds benefits directly attributable to a participant’s service with an employer that has withdrawn from the plan in a complete withdrawal, paid its full withdrawal liability, and, pursuant to a collective bargaining agreement, has assumed liability for providing such 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. 

The proposed regulations [PDF 204 KB] will appear in the Federal Register on February 11, 2016. Comments on the proposed regulations and topics to be discussed at a March 22, 2016 public hearing must be received by March 15, 2016.

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