The IRS has issued temporary regulations providing guidance on administering a vote by multiemployer plan participants regarding suspension of benefits when such a plan is determined to be in critical and declining status.
The temporary regulations (designated TD 9735) apply as of June 17, 2015, and will expire on June 15, 2018. The IRS filed the rules on Aug. 31, 2015, but they will not be official until Sept. 2, the date on which it will be published in the Federal Register.
The regulations affect active, retired and deferred vested participants and beneficiaries of multiemployer plans that are in critical and declining status as well as employers contributing to, and sponsors and administrators of, those plans.
Under the Multiemployer Pension Reform Act of 2014 (MPRA), the sponsor of such a plan may reduce the pension benefits payable to plan participants and beneficiaries if certain conditions are satisfied. A suspension of benefits may not take effect unless the plan participants have voted on the suspension.
TD 9735 provides guidance regarding the administration of the participant vote required under Internal Revenue Code Section 432(e)(9)(H). The rules reflect comments from the Pension Benefit Guaranty Corporation (PBGC) and the Department of Labor (DOL).
Under the regulations:
The Treasury Department will use that information to determine, in consultation with the PBGC and the DOL, whether a majority of eligible voters has voted to reject the suspension.
The temporary regulations (designated TD 9735) apply as of June 17, 2015, and will expire on June 15, 2018. The IRS filed the rules on Aug. 31, 2015, but they will not be official until Sept. 2, the date on which it will be published in the Federal Register.
The regulations affect active, retired and deferred vested participants and beneficiaries of multiemployer plans that are in critical and declining status as well as employers contributing to, and sponsors and administrators of, those plans.
Under the Multiemployer Pension Reform Act of 2014 (MPRA), the sponsor of such a plan may reduce the pension benefits payable to plan participants and beneficiaries if certain conditions are satisfied. A suspension of benefits may not take effect unless the plan participants have voted on the suspension.
TD 9735 provides guidance regarding the administration of the participant vote required under Internal Revenue Code Section 432(e)(9)(H). The rules reflect comments from the Pension Benefit Guaranty Corporation (PBGC) and the Department of Labor (DOL).
Under the regulations:
- the Treasury Department may designate one or more service providers to facilitate the administration of the vote;
- a service provider may assist in distributing the ballot package to eligible voters and collecting and tabulating the votes; and
- if a service provider is designated to collect and tabulate votes, then the service provider will provide the Treasury Department with the report of the results of the vote.
The Treasury Department will use that information to determine, in consultation with the PBGC and the DOL, whether a majority of eligible voters has voted to reject the suspension.
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