The IRS today released an advance version of Rev. Proc. 2017-43 that includes changes to the existing procedures for approval from the U.S. Treasury Department for a suspension of benefits under a multiemployer defined benefit pension plan that is in “critical and declining status.”
Rev. Proc. 2017-43 [PDF 220 KB] sets out new procedures for applying for Treasury approval of a suspension of benefits. These procedures replace those provided in Rev. Proc. 2016-27, and are intended to facilitate the review of an application for a suspension of benefits in light of Treasury’s experience in processing applications.
The procedures in Rev. Proc. 2017-43 must be followed and are effective for applications submitted on or after September 1, 2017.
Final regulations (T.D. 9765) were issued in late April 2016 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.
Also in April 2016, the IRS issued Rev. Proc. 2016-27 to establish the rules for applications filed with Treasury for a suspension of benefits under a multiemployer defined benefit pension plan that is in critical and declining status under section 432(e)(9). Read TaxNewsFlash-United States
© 2017 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.