April 28, 2016

Treasury Issues Final MPRA Suspension Regulations

On April 28, 2016, the Department of the Treasury (Treasury) issued final regulations on the suspension of benefits by multiemployer plans under the Multiemployer Pension Reform Act of 2014 (MPRA). At the same time, the Internal Revenue Service released a revised Revenue Procedure (Rev. Proc. 2016-27) on the requirements for submitting suspension applications.

The final regulations make changes and clarifications to many specific provisions of the proposed regulations. Examples include:

  • Addressing numerous actuarial assumption and projection issues
  • Clarifying that the plan must pay for actuarial, legal, and communication expenses of the retiree representative
  • Adopting a new procedure permitting trustees, with the Treasury’s approval, to withdraw and resubmit a revised suspension application
  • Adding new procedural requirements for the participant vote

The final regulations do not change the statutory requirement that those who do not vote are counted as voting in support of a suspension. The final regulations do not address the special UPS benefit suspension ordering rule that was the subject of a separate, recent proposed regulation.

Rev. Proc. 2016-27 follows the basic outline of the prior revenue procedure, updated to reflect the final regulations. The model notice to participants is also updated. Neither piece of guidance appears to address whether any pending applications will need to be revised or supplemented because of the new procedures.

The final regulations (which remove the Temporary Regulations published on June 19, 2015) are effective on April 28, 2016, and applicable to suspension applications for which the approval or denial is issued on or after April 26, 2016. In the case of a systemically important plan, the final regulations apply with respect to any modified suspension implemented on or after April 26, 2016.

Rev. Proc. 2016-27 replaces Rev. Proc. 2015-34, which was released on June 19, 2015, and the Procedures in Rev. Proc. 2016-27 must be followed for suspension applications submitted on or after April 26, 2016. 

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Serena Simons

Serena Simons

SVP, National Retirement Compliance Practice Leader