February 11, 2016

Treasury Proposes Regulations on MPRA’s Special Ordering Rule for Benefit Suspensions

On February 11, 2016, the Department of Treasury (Treasury) issued a proposed regulation interpreting a special rule in the benefit suspension provisions of the Multiemployer Pension Reform Act of 2014 (MPRA). The special rule, which is found in Section 432(e)(9)(D)(vii) of the Internal Revenue Code and Section 305(e)(9)(D)(vii) of the Employee Retirement Income Security Act, applies to the ordering of benefit suspensions in a critical and declining plan with participants whose benefits fall in a special category. The category covers benefits related to service with an employer that withdrew from the plan before MPRA, paid its withdrawal liability in full and agreed to make up any benefits (through a single employer plan) that a participant (or beneficiary) subsequently loses under the multiemployer plan because of its financial condition. The Treasury’s first round of proposed and temporary regulations on MPRA benefit suspensions, published on June 19, 2015, did not provide guidance on this special ordering rule. This proposed regulation fills that gap.

Comments are due by March 15, 2016. A public hearing will be held on March 22, 2016.

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Serena Simons

Serena Simons

SVP, National Retirement Compliance Practice Leader