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Application procedures revised for suspending multiemployer pension plan benefits

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Application procedures revised for suspending multiemployer pension plan benefits The IRS released Rev. Proc. 2017-43 to revise procedures for application for a suspension of benefits under a multiemployer defined benefit plan that is in critical or declining status under Section 432(e)(9).

The Multiemployer Pension Reform Act of 2014 pertains to multiemployer plans that are projected to have insufficient funds at some point in the future to pay the full plan benefits to which individuals will be entitled (referred to as plans in “critical and declining status”). The sponsors of those plans are permitted to reduce the pension benefits payable to plan participants and beneficiaries if certain conditions are satisfied. A suspension of benefits is not permitted to take effect prior to a vote of the participants of the plan with respect to the suspension. The IRS issued temporary regulations (T.D. 9735) and proposed regulations (REG-123640-15) that provide guidance relating to the administration of that vote.

The IRS previously issued Rev. Proc. 2016-27 to provide application procedures and a model notice that a plan sponsor proposing a benefit suspension could use to satisfy the content and readability requirements of Section 432(e)(9). Rev. Proc. 2017-43 supersedes Rev. Proc. 2016-27. Plan sponsors should follow the application process prescribed in Rev. Proc. 2017-43 for an application for approval of a proposed benefit suspension submitted on or after Sept. 1, 2017.

Contact Eddie Adkins
Partner, Washington National Tax Office
T +1 202 521 1565

Jeffrey Martin
Partner, Washington National Tax Office
T +1 202 521 1526

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