On Wednesday, the IRS issued temporary and proposed regulations that provide guidance for multiemployer pension plans that are in critical and declining status and therefore may be permitted to suspend benefits under the Multiemployer Pension Reform Act of 2014, P.L. 113-235 (T.D. 9723; REG-102648-15).
The IRS also issued Rev. Proc. 2015-34, which provides the rules for plans to submit applications to be permitted to suspend benefits. Although the IRS will begin accepting these applications on or after June 19, 2015, it said that it did not expect to approve any applications until the regulations are finalized.
The temporary regulations, which are effective June 19, the date they will be published in the Federal Register, provide sufficient guidance to enable a plan sponsor that wishes to apply for approval of a suspension of benefits to prepare and submit such an application, and to enable the Department of the Treasury to begin the processing of such an application. The temporary rules provide general guidance, including the meaning of the term “suspension of benefits,” the general conditions for a suspension of benefits, and the implementation of a suspension after a participant vote.
The proposed regulations, which also ask for comments on the temporary regulations, provide additional guidance on the standards that will be applied in reviewing an application for suspension of benefits and any statutory limitations on a suspension of benefits.