IRS issues regs on administration of participant voting on multiemployer plan benefit suspensions

The IRS has issued temporary and proposed regulations under Code Sec. 432(e)(9) providing detailed guidance on the administration of participant voting prior to the suspension of benefits by the sponsors of multiemployer defined benefit plans in critical and declining status. The text of the temporary regulations also serves as the text of the proposed regulations. The temporary regulations are effective September 2, 2015. They apply on or after June 17, 2015 and expire on June 15, 2016.


The Multiemployer Pension Reform Act of 2014 (MPRA), Division O of the Consolidated and Further Continuing Appropriations Act (P.L. 113-235), allows multiemployer plans in “critical and declining status” to apply to the Treasury Department for permission to suspend retirement benefits. If the application is approved, the plan participants and beneficiaries must have a chance to reject the planned reduction in an election administered by the Treasury Department prior to any suspension taking place. If a majority of eligible voters reject the suspension, the plan sponsor may submit a new suspension application.

Temporary/proposed regs

The temporary and proposed regulations govern the manner in which the Treasury Department will administer votes. They specify that a participant vote requires the completion of three steps:

  • distribution of a package of ballot materials;
  • voting by eligible voters, and collecting and tabulating votes; and
  • determination by the Treasury Department (in consultation with the Pension Benefit Guaranty Corporation (PBGC) and Labor Department) whether a majority of the eligible voters has voted to reject the proposed suspension.

Under the regulations, the Treasury Department is permitted to designate a service provider or service providers to facilitate the administration of the vote. 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, which includes a breakdown of the number of eligible voters who voted, the number of eligible voters who voted in support of and to reject the suspension, and certain other information. The Treasury Department will use that information to determine (in consultation with the PBGC and the Labor Department) whether a majority of eligible voters has voted to reject the suspension.

The regulations cover procedures on the distribution of the ballot package, the voting by participants and collection and tabulation of the votes, the determination that a majority of eligible voters rejected the suspension, and the statement in opposition to the proposed suspension. In addition, the regulations provide for the publication of a model ballot.

Comments requested

The Treasury Department and the IRS request comments on all aspects of the proposed rules. Comments and requests for a public hearing must be received by November 2, 2015. Send submissions to CC:PA:LPD:PR (REG-123640-15), room 5205, Internal Revenue Service, PO Box 7604, Ben Franklin Station, Washington DC 20044. Submissions may be hand-delivered Monday through Friday between the hours of 8 a.m. and 4 p.m. to: CC:PA:LPD:PR (REG-123640-15), Courier’s Desk, Internal Revenue Service, 1111 Constitution Avenue, NW., Washington, DC, or sent electronically via the Federal eRulemaking Portal at (IRS REG-123640-15).

Source: 80 FR 52972.

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