The Treasury Department and IRS this afternoon released for publication in the Federal Register final regulations (T.D. 9765) as guidance concerning the requirements under section 432(e)(9) about a suspension of benefits under a multiemployer defined benefit plan that is in “critical and declining status.”
A plan is in critical and declining status when it is projected to have insufficient funds, in a specific timeframe, to pay the full plan benefits to which individuals would be entitled. Under legislation enacted in 2014, 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.
The final regulations [PDF 476 KB] adopt provisions that were contained in sets of proposed regulations in 2015, and remove corresponding temporary regulations. The final regulations do not contain final action on regulations proposed in February 2016.
The purpose of this release is to provide text of the final regulations.
In a related development, the IRS today released an advance version of Rev. Proc. 2016-27 [PDF 166 KB] that provides the revised procedures for applications for a suspension of benefits under a multiemployer defined benefit pension plan that is in critical and declining status under section 432(e)(9).
© 2016 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.