Temp. Reg. Suspension of Benefits Under MPRA

Federal Register / Vol. 80, No. 118 / Friday, June 19, 2015 / Rules and Regulations
regulatory areas 2C and 3A during one
charter vessel fishing trip.
(v) Be a charter vessel guide or a
charter vessel operator during a charter
vessel fishing trip in Commission
regulatory area 2C or 3A with one or
more charter vessel anglers that are
catching and retaining halibut without
having on board the vessel with the
charter vessel anglers a State of Alaska
Department of Fish and Game Saltwater
Charter Logbook in which the charter
vessel guide has specified the following:
(1) The person named on the charter
halibut permit or permits being used
during that charter vessel fishing trip;
(2) The charter halibut permit or
permits number(s) being used during
that charter vessel fishing trip; and
(3) The name and State-issued vessel
registration (AK number) or U.S. Coast
Guard documentation number of the
charter vessel.
7. In § 300.67, revise paragraphs (a)(1)
and (3) to read as follows:

■

§ 300.67 Charter halibut limited access
program.

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*

*
*
*
*
(a) * * *
(1) In addition to other applicable
permit, licensing, or registration
requirements, any charter vessel guide
of a charter vessel during a charter
vessel fishing trip with one or more
charter vessel anglers catching and
retaining Pacific halibut on board must
have on board the vessel an original
valid charter halibut permit or permits
endorsed for the regulatory area in
which the charter vessel is operating
and endorsed for at least the number of
charter vessel anglers who are catching
and retaining Pacific halibut. Each
charter halibut permit holder must
ensure that the charter vessel operator
and charter vessel guide of the charter
vessel comply with all requirements of
§§ 300.65, 300.66, and 300.67.
*
*
*
*
*
(3) Charter vessel angler endorsement.
A charter halibut permit is valid for up
to the maximum number of charter
vessel anglers on a single charter vessel
for which the charter halibut permit is
endorsed.
*
*
*
*
*

SECURITIES AND EXCHANGE
COMMISSION
17 CFR Parts 200, 230, 232, 239, 240,
249 and 260
[Release Nos. 33–9741B; 34–74578B; 39–
2501B; File No. S7–11–13]
RIN 3235–AL39

Amendments for Small and Additional
Issues Exemptions Under the
Securities Act (Regulation A)
Securities and Exchange
Commission.
ACTION: Final rule; correction.
AGENCY:

This document corrects the
designation of a paragraph in Item 6 of
Part I to Form 1–A in a final rule
published in the Federal Register of
April 20, 2015, regarding the
Amendments for Small and Additional
Issues Exemptions under the Securities
Act (Regulation A).
DATES: This correction is effective June
19, 2015.
FOR FURTHER INFORMATION CONTACT:
Linda Cullen, Office of the Secretary at
(202) 551–5400.
SUPPLEMENTARY INFORMATION: In FR
Document No. 2015–07305 beginning
on page 21806 for Monday, April 20,
2015, the following correction is made:
SUMMARY:

Form 1–A [Corrected]
On page 21906, in the first column,
third line, paragraph (e) of Form 1–A is
redesignated as paragraph (d).
Dated: June 16, 2015.
Brent J. Fields,
Secretary.
[FR Doc. 2015–15146 Filed 6–18–15; 8:45 am]
BILLING CODE 8011–01–P

DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Parts 1 and 602
[TD 9723]
RIN 1545–BM73

Suspension of Benefits Under the
Multiemployer Pension Reform Act of
2014

[FR Doc. 2015–15085 Filed 6–18–15; 8:45 am]
BILLING CODE 3510–22–P

SUMMARY:

15:11 Jun 18, 2015

AGENCY:

This document contains
temporary regulations relating to
multiemployer pension plans that are
projected to have insufficient funds, at
some point in the future, to pay the full

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benefits to which individuals will be
entitled under the plans (referred to as
plans in ‘‘critical and declining status’’).
The Multiemployer Pension Reform Act
of 2014 (‘‘MPRA’’) amended the Internal
Revenue Code to incorporate
suspension of benefits provisions that
permit these multiemployer plans to
reduce pension benefits payable to
participants and beneficiaries if certain
conditions are satisfied. MPRA requires
the Secretary of the Treasury, in
consultation with the Pension Benefit
Guaranty Corporation and the Secretary
of Labor, to approve or deny
applications by these plans to reduce
benefits. As required by MPRA, these
temporary regulations, together with
proposed regulations being published at
the same time, provide guidance
implementing these statutory
provisions. These temporary regulations
affect active, retired, and deferred
vested participants and beneficiaries of
multiemployer plans that are in critical
and declining status as well as
employers contributing to, and sponsors
and administrators of, those plans. The
text of these temporary regulations also
serves, in part, as the text of the
proposed regulations (REG–102648–15)
set forth in the notice of proposed
rulemaking on this subject in the
Proposed Rules section of this issue of
the Federal Register.
DATES: Effective Date: These regulations
are effective on June 19, 2015.
Applicability Date: For date of
applicability, see § 1.432(e)(9)–1T(j).
FOR FURTHER INFORMATION CONTACT: The
Department of the Treasury MPRA
guidance information line at (202) 622–
1559 (not a toll-free number).
SUPPLEMENTARY INFORMATION:
Paperwork Reduction Act

Internal Revenue Service (IRS),
Treasury.
ACTION: Temporary regulations.

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Sfmt 4700

These temporary regulations are being
issued without prior notice and public
procedure pursuant to the
Administrative Procedure Act (5 U.S.C.
553). For this reason, the collection of
information contained in these
regulations has been reviewed and,
pending receipt and evaluation of
public comments, approved by the
Office of Management and Budget under
control number 1545–2260.
An agency may not conduct or
sponsor, and a person is not required to
respond to, a collection of information
unless the collection of information
displays a valid control number.
For further information concerning
this collection of information, and
where to submit comments on the
collection of information and the
accuracy of the estimated burden, and
suggestions for reducing this burden,

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Federal Register / Vol. 80, No. 118 / Friday, June 19, 2015 / Rules and Regulations

please refer to the preamble to the crossreferenced notice of proposed
rulemaking on this subject in the
Proposed Rules section in this issue of
the Federal Register.
Books or records relating to a
collection of information must be
retained as long as their contents may
become material in the administration
of any internal revenue law. Generally,
tax returns and tax return information
are confidential, as required by 26
U.S.C. 6103.
Background

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Overview
Section 432(e)(9) 1 of the Internal
Revenue Code (Code) permits the plan
sponsor of a multiemployer plan that is
projected to have insufficient funds, at
some point in the future, to pay the full
benefits to which individuals will be
entitled under the plan (referred to as a
plan in ‘‘critical and declining status’’)
to reduce the pension benefits payable
to participants and beneficiaries under
the plan if certain conditions are
satisfied (referred to as a ‘‘suspension of
benefits’’). MPRA requires the Secretary
of the Treasury, in consultation with the
Pension Benefit Guaranty Corporation
and the Secretary of Labor (generally
referred to in this preamble as the
Treasury Department, PBGC, and Labor
Department, respectively), to issue
appropriate guidance to implement the
provisions of section 432(e)(9). This
document contains temporary
regulations under section 432(e)(9) that,
together with proposed regulations that
are being published elsewhere in this
issue of the Federal Register and a
revenue procedure being published in
the Internal Revenue Bulletin, Rev.
Proc. 2015–34, implement section
432(e)(9) as required by the statute. The
Treasury Department consulted with the
PBGC and the Labor Department on
these temporary regulations.
The temporary regulations in this
document, which are applicable
immediately, 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 regulations
provide general guidance regarding
section 432(e)(9), including guidance
1 Section 432(e)(9) was added to the Internal
Revenue Code by the Pension Protection Act of
2006, Public Law 109–280 (120 Stat. 780 (2006))
(PPA ’06) and amended by the Multiemployer
Pension Reform Act of 2014, Division O of the
Consolidated and Further Continuing
Appropriations Act, 2015, Public Law 113–235 (128
Stat. 2130 (2014)) (MPRA).

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15:11 Jun 18, 2015

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regarding 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 notice of
proposed rulemaking, published
elsewhere in this issue of the Federal
Register, includes the proposed
regulations and requests comments on
the provisions of the proposed
regulations as well as these temporary
regulations. The provisions of the
temporary regulations and proposed
regulations are expected to be integrated
and issued as a single set of final
regulations with any changes that are
made following consideration of the
comments.
The proposed regulations, which are
not applicable immediately, contain
additional provisions with respect to
which the Department of the Treasury
intends to consider public comments
before finalizing a decision to approve
an application for suspension of
benefits. The proposed regulations also
provide additional guidance regarding
section 432(e)(9), including guidance
relating to the standards that will be
applied in reviewing an application for
suspension of benefits and the statutory
limitations on a suspension of benefits.
The regulations implementing the
statutory suspension of benefits
provisions have been divided, as
described, into temporary regulations
and proposed regulations in order to
balance the interest in considering
public comments on rules before they
apply with the evident statutory intent,
reflected in MPRA, to implement the
statutory provisions without undue
delay. Although the Department of the
Treasury is issuing proposed and
temporary regulations under section
432(e)(9), it is expected that no
application proposing a benefit
suspension will be approved prior to the
issuance of final regulations. If a plan
sponsor chooses to submit an
application for approval of a proposed
benefit suspension in accordance with
the proposed and temporary regulations
before the issuance of final regulations,
then the plan sponsor may need to
revise the proposed suspension (and
potentially the related notices to plan
participants) or supplement the
application to take into account any
differences in the requirements relating
to suspensions of benefits that might be
included in the final regulations.
Rev. Proc. 2015–34 prescribes the
specifics of the application process for
approval of a proposed benefit
suspension. The revenue procedure also
provides a model notice that a plan
sponsor proposing a benefit suspension

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may use to satisfy the statutory notice
requirement.
Statutory Background
Code section 412 contains minimum
funding rules that generally apply to
pension plans. Code section 431, added
by section 211 of PPA ’06, sets forth the
funding rules that apply specifically to
multiemployer defined benefit plans.
Code section 432, added by section 212
of PPA ’06, sets forth additional rules
that apply to certain multiemployer
plans in endangered or critical status,
and permits plans in critical status to be
amended to reduce certain otherwise
protected benefits (referred to as
adjustable benefits). Section 202 of PPA
’06 amended section 305 of the
Employee Retirement Income Security
Act of 1974, Public Law 93–406 (88 Stat.
829 (1974)), as amended (ERISA), to
prescribe parallel rules. PPA ’06
provided that Code section 432 and
ERISA section 305 would sunset for
plan years beginning after December 31,
2014. However, section 101 of MPRA
made them permanent, with certain
modifications.
Section 201 of MPRA amended Code
section 432 to add a new status, called
critical and declining status, for
multiemployer defined benefit plans.
Section 432(b)(6) provides that a plan in
critical status is treated as being in
critical and declining status if the plan
satisfies the criteria for critical status
and in addition is projected to become
insolvent within the meaning of section
418E during the current plan year or any
of the 14 succeeding plan years (or 19
succeeding plan years if the plan has a
ratio of inactive participants to active
participants that exceeds two to one or
if the funded percentage of the plan is
less than 80 percent). Section 201 of
MPRA also amended Code section
432(e)(9) to prescribe benefit suspension
rules for plans in critical and declining
status.2
MPRA was enacted on December 16,
2014. Section 201(b)(7) of MPRA
provides that, not later than 180 days
after the date of enactment, the Treasury
Department, in consultation with the
PBGC and the Labor Department, is
required to publish appropriate
guidance to implement section
432(e)(9). Section 201(c) of MPRA
provides that the amendments made by
section 201 will take effect on the date
of enactment.
2 Section 201 of MPRA makes parallel
amendments to section 305 of ERISA and the
Department of the Treasury has interpretive
jurisdiction over the subject matter of these
provisions under ERISA as well as the Code. See
also section 101 of Reorganization Plan No. 4 of
1978 (43 FR 47713).

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Federal Register / Vol. 80, No. 118 / Friday, June 19, 2015 / Rules and Regulations
On February 18, 2015, the Department
of the Treasury issued a Request for
Information on Suspensions of Benefits
under the Multiemployer Pension
Reform Act of 2014 in the Federal
Register (80 FR 8578). The Request for
Information included questions focusing
on certain matters to be addressed in
guidance implementing section
432(e)(9) and indicated that
multiemployer plans should not submit
applications for suspensions of benefits
prior to a date specified in such future
guidance. These temporary regulations,
and the proposed regulations published
elsewhere in this issue of the Federal
Register, reflect consideration of
comments received in response to the
Request for Information.
Definition of Suspension of Benefits and
General Rules Under Section
432(e)(9)(A) and 432(e)(9)(B)(i) Through
(iv)
Section 201 of MPRA prescribes
benefit suspension rules for
multiemployer defined benefit plans in
critical and declining status. Section
432(e)(9)(A) provides that
notwithstanding section 411(d)(6) and
subject to section 432(e)(9)(B) through
(I), the plan sponsor of a plan in critical
and declining status may, by plan
amendment, suspend benefits that the
sponsor deems appropriate.
The statute defines suspension of
benefits as the temporary or permanent
reduction of any current or future
payment obligation of the plan to any
participant or beneficiary under the
plan, whether or not in pay status at the
time of the suspension of benefits. Any
suspension will remain in effect until
the earlier of when the plan sponsor
provides benefit improvements in
accordance with section 432(e)(9)(E) or
when the suspension expires by its own
terms. Thus, if a suspension does not
expire by its own terms, it continues
indefinitely.
Under the statute, a plan will not be
liable for any benefit payments not
made as a result of a suspension of
benefits. All references to suspensions
of benefits, increases in benefits, or
resumptions of suspended benefits with
respect to participants will also apply
with respect to benefits of beneficiaries
or alternative payees 3 of participants.
See section 432(e)(9)(B)(iv).
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Retiree Representative
In the case of a plan with 10,000 or
more participants, section
432(e)(9)(B)(v) requires the plan sponsor
3 The Department of the Treasury and the IRS
understand this provision to refer to alternate
payees.

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to select a plan participant in pay status
to act as a retiree representative. The
retiree representative is required to
advocate for the interests of the retired
and deferred vested participants and
beneficiaries of the plan throughout the
suspension approval process. The plan
must provide for the retiree
representative’s reasonable expenses,
including reasonable legal and actuarial
support, commensurate with the plan’s
size and funded status.
Conditions for Suspensions
Section 432(e)(9)(C) sets forth
conditions that must be satisfied before
a plan sponsor of a plan in critical and
declining status for a plan year may
suspend benefits. Under one of the
conditions, the plan actuary must
certify, taking into account the proposed
suspension of benefits (and, if
applicable, a proposed partition of the
plan under section 4233 of ERISA
(partition)), that the plan is projected to
avoid insolvency within the meaning of
section 418E, assuming the suspension
of benefits continues until it expires by
its own terms or if no such expiration
date is set, indefinitely.
Another condition requires a plan
sponsor to determine, in a written
record to be maintained throughout the
period of the benefit suspension, that
although all reasonable measures to
avoid insolvency have been taken (and
continue to be taken during the period
of the benefit suspension), the plan is
still projected to become insolvent
unless benefits are suspended. In
making this determination, the plan
sponsor may take into account factors
including a specified list of 10 statutory
factors.4 See section 432(e)(9)(C)(ii).
Limitations on Suspensions
Section 432(e)(9)(D) contains
limitations on the benefits that may be
suspended, some of which apply to plan
participants and beneficiaries on an
individual basis and some of which
apply on an aggregate basis. Under the
statute, an individual’s monthly benefit
may not be reduced below 110 percent
4 These 10 factors are current and past
contribution levels; levels of benefit accruals
(including prior reductions in the rate of benefit
accruals); prior adjustable benefit reductions and
suspensions of benefits; the impact on plan
solvency of the subsidies and ancillary benefits
available to active participants; compensation levels
of active participants relative to employees in the
participants’ industry generally; competitive and
other economic factors facing contributing
employers; the impact of benefit and contribution
levels on retaining active participants and
bargaining groups under the plan; the impact of
past and anticipated contribution increases under
the plan on employer attrition and retention levels;
and measures undertaken by the plan sponsor to
retain or attract contributing employers.

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35209

of the monthly benefit that is guaranteed
by the PBGC under section 4022A of
ERISA on the date of the suspension. In
addition, no benefits based on disability
(as defined under the plan) may be
suspended.
In the case of a participant or
beneficiary who has attained age 75 as
of the effective date of a suspension,
section 432(e)(9)(D)(ii) provides that the
suspension may not exceed the
applicable percentage of the
individual’s maximum suspendable
benefit (the age-based limitation). The
maximum suspendable benefit is the
maximum amount of an individual’s
benefit that would be suspended
without regard to the age-based
limitation. The applicable percentage is
a percentage that is calculated by
dividing (i) the number of months
during the period that begins with the
month after the month in which the
suspension is effective and ends with
the month in which that participant or
beneficiary attains the age of 80 by (ii)
60 months.
Section 432(e)(9)(D) also requires the
aggregate benefit suspensions
(considered, if applicable, in connection
with a partition) to be reasonably
estimated to achieve, but not materially
exceed, the level that is needed to avoid
insolvency.
Under the statute, any suspension of
benefits must be equitably distributed
across the participant and beneficiary
population, taking into account factors
that may include one or more of a list
of 11 statutory factors.5 Finally, with
regard to a suspension of benefits that
is made in combination with a partition,
section 432(e)(9)(D)(v) provides that the
suspension may not occur before the
effective date of the partition.
Benefit Improvements
Section 432(e)(9)(E) sets forth rules
relating to benefit improvements made
while a suspension of benefits is in
effect. Under this provision, a benefit
improvement is defined as a resumption
of suspended benefits, an increase in
benefits, an increase in the rate at which
benefits accrue, or an increase in the
rate at which benefits become
nonforfeitable under the plan.
5 These 11 factors are age and life expectancy;
length of time in pay status; amount of benefit; type
of benefit; extent of a subsidized benefit; extent of
post-retirement benefit increases; history of benefit
increases and reductions; years to retirement for
active employees; any discrepancies between active
and retiree benefits; extent to which participants are
reasonably likely to withdraw support for the plan,
resulting in accelerated employer withdrawal; and
the extent to which the benefits are attributed to
service with an employer that failed to pay its
withdrawal liability.

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The statute also provides that, while
a suspension of benefits is in effect, a
plan sponsor generally has discretion to
provide benefit improvements.
However, a sponsor may not increase
plan liabilities by reason of any benefit
improvement for any participant or
beneficiary who is not in pay status (in
other words, those who are not yet
receiving benefits, such as active
employees or deferred vested
employees) unless (1) this benefit
improvement is accompanied by an
equitable distribution of benefit
improvements for those who have begun
to receive benefits (typically, retirees),
and (2) the plan actuary certifies that,
after taking those benefit improvements
into account, the plan is projected to
avoid insolvency indefinitely.6 Whether
an individual is in pay status for this
purpose is generally based on whether
the individual’s benefits began before
the first day of the plan year for which
the benefit improvement took effect.

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Notice of Proposed Suspension
A plan sponsor may not suspend
benefits unless notice is provided in
accordance with section 432(e)(9)(F).
Under this section, concurrently with an
application to suspend benefits under
section 432(e)(9)(G), the plan sponsor
must give notice to plan participants
and beneficiaries who may be contacted
by reasonable efforts, each employer
that has an obligation to contribute
(within the meaning of section 4212(a)
of ERISA) under the plan, and each
employee organization that represents
plan participants employed by those
employers for purposes of collective
bargaining. The notice must contain
sufficient information to enable
individuals to understand the effect of
any suspension of benefits, including an
individualized estimate, on an annual or
monthly basis, of the effect on each
participant or beneficiary. The notice
must also contain certain other specified
information.7 Notice must be provided
6 Avoidance of insolvency is determined by
reference to section 418E under which a plan is
insolvent if it is unable to pay scheduled benefits
for a year. Pursuant to section 432(e)(9)(E)(iv), this
restriction does not apply to certain benefit
improvements if the Treasury Department
determines either that the benefit improvements are
reasonable and provide for only de minimis
increases in plan liabilities or that the benefit
improvements are required as a condition of
qualification or to comply with other applicable
law.
7 The specified information includes a
description of the factors considered by the plan
sponsor in designing the benefit suspension; a
statement that the application for suspension of
benefits will be available on the Web site of the
Department of the Treasury and that comments on
the application will be accepted; information on the
rights and remedies of plan participants and
beneficiaries; if applicable, a statement about the

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in a form and manner prescribed in
agency guidance, written in a manner so
as to be understood by the average plan
participant, and provided in written,
electronic, or other appropriate form to
the extent it is reasonably accessible to
those to whom notice must be
furnished.
Any notice provided under section
432(e)(9)(F)(i) will satisfy the
requirement for notice of a significant
reduction in benefits described in
section 4980F. See section
432(e)(9)(F)(iv).
Suspension Applications
Section 432(e)(9)(G) describes the
process for approval or rejection of a
plan sponsor’s application for a
suspension of benefits. Under the
statute, the Treasury Department, in
consultation with the PBGC and the
Labor Department, must approve an
application upon finding that the plan
is eligible for the suspensions and has
satisfied the criteria of sections
432(e)(9)(C), (D), (E), and (F) (each
described earlier). In evaluating whether
a plan sponsor has met the criteria in
section 432(e)(9)(C)(ii) (a plan sponsor’s
determination that, although all
reasonable measures have been taken,
the plan will become insolvent if
benefits are not suspended), the plan
sponsor’s consideration of factors under
that clause must be reviewed. The
statute also requires that the plan
sponsor’s determinations in an
application for a suspension of benefits
be accepted unless they are clearly
erroneous.
Section 432(e)(9)(G) also requires an
application for a suspension of benefits
to be published on the Web site of the
Department of the Treasury and requires
the Treasury Department to publish a
Federal Register notice within 30 days
of receiving a suspension application,
soliciting comments from contributing
employers, employee organizations, and
participants and beneficiaries of the
plan for which a suspension application
was made, as well as other interested
parties.
Within 225 days after an application
for a suspension of benefits is
submitted, the statute requires the
Treasury Department, in consultation
with the PBGC and the Labor
Department, to approve or deny the
application. If the plan sponsor is not
appointment of a retiree representative, the date of
appointment of the retiree representative,
identifying information about the retiree
representative (including whether the
representative is a plan trustee) and how to contact
the representative; and information on how to
contact the Department of the Treasury for more
information and assistance where appropriate.

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notified that it has failed to satisfy one
or more applicable criteria within that
225-day period, the application is
deemed approved. If the application is
denied, a notice to the plan sponsor
must detail the specific reasons for the
rejection, including reference to the
specific requirement not satisfied.
Approval or denial of an application is
treated as final agency action for
purposes of 5 U.S.C. 704 (that is, the
approval or denial is treated as final
agency action for purposes of the
Administrative Procedure Act, Public
Law 79–404, 60 Stat. 237, as amended
(APA)).
Participant Vote on Proposed Benefit
Reduction
If a suspension application is
approved, it then goes to a vote of plan
participants and beneficiaries. See
section 432(e)(9)(H). The vote will be
administered by the Treasury
Department, in consultation with the
PBGC and the Labor Department, within
30 days after approval of the suspension
application. The plan sponsor is
required to provide a ballot for a vote
(subject to approval by the Treasury
Department, in consultation with the
PBGC and the Labor Department). The
statute specifies information that the
ballot must include.8 If a majority of
plan participants and beneficiaries do
not vote to reject the suspension, the
statute requires the Treasury
Department to issue a final
authorization to suspend benefits within
seven days after the vote.
If a majority of plan participants and
beneficiaries vote to reject the
suspension, the statute requires the
Treasury Department, in consultation
with the PBGC and the Labor
Department, to determine whether the
plan is a systemically important plan. A
systemically important plan is a plan for
which the PBGC projects the present
value of projected financial assistance
payments to exceed $1.0 billion, as
indexed, if suspensions are not
implemented.
If a majority of plan participants and
beneficiaries vote to reject the
8 This information includes a statement from the
plan sponsor in support of the suspension; a
statement in opposition to the suspension compiled
from comments received in response to the Federal
Register notice issued by Treasury within 30 days
of receiving the suspension application; a statement
that the suspension has been approved by the
Secretary of the Treasury, in consultation with the
PBGC and the Secretary of Labor; a statement that
the plan sponsor has determined that the plan will
become insolvent unless the suspension takes
effect; a statement that insolvency of the plan could
result in benefits lower than benefits paid under the
suspension; and a statement that insolvency of the
PBGC would result in benefits lower than benefits
otherwise paid in the case of plan insolvency.

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suspension and the plan is not a
systemically important plan, a final
authorization to suspend benefits will
not be issued. In such a case, the statute
provides that the plan sponsor may
submit a new application for approval
of a suspension of benefits to the
Treasury Department.
Within 30 days after a plan is
determined to be a systemically
important plan, the Participant and Plan
Sponsor Advocate selected under ERISA
may submit recommendations to the
Treasury Department with respect to the
suspension that was rejected by the vote
or recommendations for any revisions to
that suspension. Notwithstanding the
vote rejecting the suspension, the statute
requires the Treasury Department, in
consultation with the PBGC and the
Labor Department, to permit the plan
sponsor to implement either the
proposed benefit suspension or a
modification by the Treasury
Department, in consultation with the
PBGC and the Labor Department, of that
suspension. The Treasury Department
must complete this requirement within
90 days after the results of a vote
rejecting a suspension for a systemically
important plan are certified, and a
modification of the suspension by the
Treasury Department is only permitted
if the plan is still projected to avoid
insolvency under the modification.
If the Treasury Department is required
to permit the suspension or a modified
suspension to go into effect in the case
of a systemically important plan with
respect to which there has been a vote
rejecting the suspension, the statute
requires the Treasury Department to
issue the final authorization to suspend
at a time sufficient to allow the
suspension to be implemented by the
end of the 90-day period following
certification of the results of that vote.
Judicial Review
Section 432(e)(9)(I)(i) allows a plan
sponsor to challenge a denial of an
application for suspension only after the
application is denied. Under the statute,
an action challenging the approval of a
suspension may be brought only
following the issuance of a final
authorization to suspend. The statute
also provides that a court will review an
action challenging approval of a
suspension of benefits in accordance
with 5 U.S.C. 706 (that is, the standard
of review applicable for purposes of the
APA) and will not grant a temporary
injunction with respect to a suspension
unless it finds a clear and convincing
likelihood that the plaintiff will prevail
on the merits. Under section
432(e)(9)(I)(iii), participants and
beneficiaries affected by a suspension

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‘‘shall not have a cause of action under
this title.’’ An action challenging either
the approval of a suspension of benefits
or the denial of an application for a
suspension of benefits may not be
brought more than one year after the
earliest date on which the plaintiff
acquired or should have acquired actual
knowledge of the existence of the cause
of action. See section 432(e)(9)(I)(iv).
Explanation of Provisions
I. Overview
These temporary regulations provide
guidance on certain requirements under
section 432(e)(9) regarding suspension
of benefits for multiemployer defined
benefit plans in critical and declining
status. The temporary regulations do not
address certain other requirements that
are addressed in the text of the proposed
regulations (REG–102648–15) set forth
in the notice of proposed rulemaking on
this subject in the Proposed Rules
section of this issue of the Federal
Register. The provisions of these
temporary regulations are cross
referenced in the proposed regulations
so that comments on these provisions
may be included with comments on the
proposed regulations. In addition to the
proposed and temporary regulations, the
procedural requirements for submitting
an application to suspend benefits, as
well as a model notice, are set forth in
Rev. Proc. 2015–34.
II. General Rules on Suspension of
Benefits
These temporary regulations provide
that, subject to section 432(e)(9)(B)
through (I), the plan sponsor of a
multiemployer plan that is in critical
and declining status within the meaning
of section 432(b)(6) for a plan year may,
by plan amendment, implement a
suspension of benefits that the plan
sponsor deems appropriate. Such a
suspension is permitted
notwithstanding the generally
applicable anti-cutback provisions of
section 411(d)(6). The plan amendment
implementing a suspension of benefits
must be adopted in a plan year in which
the plan is in critical and declining
status.
Under the regulations, once a plan is
amended to suspend benefits, a plan
may pay or continue to pay a reduced
level of benefits pursuant to a
suspension only if the terms of the plan
are consistent with the requirements of
section 432(e)(9) and the regulations.
III. Definitions
The temporary regulations include
definitions for the terms pay status and
plan sponsor. A person is in pay status
under a multiemployer plan if, as

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described in section 432(j)(6), at any
time during the current plan year, the
person is a participant, beneficiary, or
alternate payee under the plan and is
paid an early, late, normal, or disability
retirement benefit under the plan (or a
death benefit under the plan related to
a retirement benefit).
The term plan sponsor means the
association, committee, joint board of
trustees, or other similar group of
representatives of the parties that
establishes or maintains the
multiemployer plan. However, in the
case of a plan described in section
404(c), or a continuation of such a plan,
the term plan sponsor means the
association of employers that is the
employer settlor of the plan.
IV. Definition of Suspension of Benefits
and Related Rules
The temporary regulations provide
that the term suspension of benefits
means the temporary or permanent
reduction, pursuant to the terms of the
plan, of any current or future payment
obligation of the plan with respect to
any participant under the plan. A
suspension of benefits can apply with
respect to a participant of the plan
regardless of whether the participant,
beneficiary, or alternate payee has
commenced receiving benefits before
the effective date of the suspension of
benefits. If a plan pays a reduced level
of benefits pursuant to a suspension of
benefits that complies with the
requirements of section 432(e)(9), then
the plan is not liable for any benefits not
paid as a result of the suspension.
A suspension of benefits may be of
indefinite duration or may expire as of
a certain date. Under the regulations, if
the suspension of benefits has an
expiration date, that date must be
specified in the plan amendment
implementing the suspension.
The temporary regulations provide
that a plan sponsor may amend the plan
to eliminate some or all of a suspension
of benefits, provided that the
amendment satisfies the requirements
that apply to benefit improvements in
the proposed rules under section
432(e)(9)(E).
The temporary regulations clarify
that, except as otherwise specified, all
references to suspensions of benefits,
increases in benefits, or resumptions of
suspended benefits with respect to
participants also apply with respect to
benefits of beneficiaries or alternate
payees (as defined in section 414(p)(8))
of participants.
V. Retiree Representative
A retiree representative must be
selected for a plan with 10,000 or more

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participants. The temporary regulations
implement this condition by requiring
that a retiree representative be selected
if 10,000 or more participants were
reported on the most recently filed Form
5500, ‘‘Annual Return/Report of
Employee Benefit Plan.’’ 9 The plan
sponsor must select the retiree
representative at least 60 days before the
plan sponsor submits an application to
suspend benefits. The retiree
representative must be a plan
participant who is in pay status and
may or may not be a plan trustee.
The role of the retiree representative
is to advocate for the interests of the
retired and deferred vested participants
and beneficiaries of the plan throughout
the suspension approval process.
However, in the discretion of the plan
sponsor, the retiree representative may
continue in this role throughout the
period of the benefit suspension. This
would enable the retiree representative
to monitor compliance with the ongoing
requirements during the period of the
suspension, such as the requirement
that the plan sponsor make annual
determinations that all reasonable
measures to avoid insolvency have been
taken and that a suspension is necessary
to avoid insolvency as well as to
monitor compliance with the rules
relating to benefit improvements. The
regulations refer to section
432(e)(9)(B)(v)(III) for rules relating to
the fiduciary status of a retiree
representative, but do not provide
additional guidance with respect to this
provision.
The plan must pay reasonable
expenses incurred by the retiree
representative, including reasonable
legal and actuarial support,
commensurate with the plan’s size and
funded status. Upon request, the plan
sponsor must promptly provide the
retiree representative with relevant
information, such as plan documents
and data, that is reasonably necessary to
enable the retiree representative to
perform the representative’s role,
described earlier under this paragraph
V.
The temporary regulations permit a
plan sponsor of a plan that has reported
fewer than 10,000 participants to select
a retiree representative in connection
with an application for approval of a
suspension of benefits in order to
encourage such a plan sponsor to do so.
If a retiree representative is selected for
such a plan, the rules that apply to
retiree representatives for plans with
10,000 or more participants (other than
9 On

the Form 5500 for the 2014 plan year, this
is the total number of participants as of the end of
the plan year that is reported on Part II, Line 6f.

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the rule concerning the size of the plan
and the timing of the appointment) will
apply.
VI. Conditions for Suspensions
A plan sponsor of a plan in critical
and declining status 10 may suspend
benefits only if the actuarial
certification requirement in section
432(e)(9)(C)(i) and the plan-sponsor
determinations requirements in section
432(e)(9)(C)(ii) are satisfied.
A. Actuarial Certification
Under the temporary regulations, the
actuarial certification requirement in
section 432(e)(9)(C)(i) is satisfied if,
taking into account the proposed
suspension of benefits (and, if
applicable, a proposed partition of the
plan), the plan’s actuary certifies that
the plan is projected to avoid insolvency
within the meaning of section 418E,
assuming the suspension of benefits
continues until it expires by its own
terms or if no such expiration date is
set, indefinitely. The temporary
regulations do not provide guidance on
this topic. However, the proposed
regulations provide rules for the
comparable requirement that the
suspension (in combination with a
partition, if applicable) be reasonably
estimated to avoid insolvency under
section 432(e)(9)(D)(iv).
B. Plan-Sponsor Determinations
A plan may not suspend benefits
unless the plan sponsor makes initial
and annual determinations that the plan
is projected to become insolvent unless
benefits are suspended, although all
reasonable measures to avoid
insolvency have been taken and
continue to be taken.
Under the temporary regulations, a
plan satisfies the initial-plan-sponsor
determinations requirement only if the
plan sponsor determines that (1) all
reasonable measures to avoid
insolvency, within the meaning of
section 418E, have been taken, and (2)
the plan is projected to become
insolvent within the meaning of section
418E unless the proposed suspension of
benefits (or another suspension of
benefits under section 432(e)(9)) is
implemented for the plan.
In making its determination that all
reasonable measures to avoid
insolvency have been taken, the plan
10 In making the projections related to whether a
plan is in critical and declining status, the plan
actuary’s projections are required to be based on
reasonable actuarial assumptions. Rev. Proc. 2015–
34 requires disclosure of a 10-year history of certain
critical assumptions for this purpose as well as for
purposes of the conditions for suspensions required
by section 432(e)(9)(C).

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sponsor may take into account the nonexclusive list of factors set forth in
section 432(e)(9)(C)(ii). In making the
initial determination that the plan is
projected to become insolvent without
the proposed suspension of benefits (or
another suspension under section
432(e)(9)), a plan sponsor may rely on
the actuarial certification made
pursuant to section 432(b)(3)(A)(i) that
the plan is in critical and declining
status for the plan year.
The rules relating to the annual-plansponsor determinations are included in
the proposed regulations.
VII. Limitations on Suspensions
The proposed and temporary
regulations reflect the individual and
aggregate limitations on a suspension of
benefits under section 432(e)(9)(D).11
The temporary regulations provide that
after applying the individual
limitations, the overall size and
distribution of the suspension is subject
to the aggregate limitations.
The temporary regulations provide
that the monthly benefit payable to a
participant, beneficiary, or alternate
payee may not be reduced below 110
percent of the monthly benefit that
would be guaranteed by the PBGC under
section 4022A of ERISA if the plan were
to become insolvent as of the effective
date of the suspension. The proposed
regulations provide more detailed rules
for applying this limitation.
The temporary regulations reflect the
statutory prohibition in section
432(e)(9)(D)(iii) on applying a
suspension of benefits to benefits based
on disability (as defined under the
plan). The proposed regulations include
more detailed rules for applying this
limitation.
The rules regarding the age-based
limitation of section 432(e)(9)(D)(ii) and
the aggregate limitations of section
432(e)(9)(D)(iv) and (vi) are set forth in
the proposed regulations.
In any case in which a suspension of
benefits with respect to a plan is made
in combination with a partition of the
plan, the suspension of benefits may not
take effect prior to the effective date of
the partition. This requirement will not
be satisfied if the partition order under
section 4233 of ERISA has not been
provided to the Treasury Department by
the last day of the 225-day review
period described in section
432(e)(9)(G)(iii), after which deemed
approval of the suspension would
occur.
11 The temporary regulations refer to section
432(e)(9)(D)(vii) for additional rules applicable to
certain plans, but do not provide additional
guidance with respect to this provision.

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VIII. Benefit Improvements
The rules regarding restrictions on
benefit improvements are set forth in
the proposed regulations.

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IX. Notice of Proposed Suspension
The temporary regulations prescribe
rules implementing the statutory notice
requirements in section 432(e)(9)(F).
Specifically, the temporary
regulations require the plan sponsor to
provide notice of a proposed suspension
to all plan participants, beneficiaries of
deceased participants, and alternate
payees (regardless of whether their
benefits are proposed to be suspended)
except those who cannot be contacted
by reasonable efforts; each employer
that has an obligation to contribute
(within the meaning of section 4212(a)
of ERISA) under the plan; and each
employee organization which, for
purposes of collective bargaining,
represents plan participants employed
by such an employer. The temporary
regulations provide two examples
illustrating what efforts constitute
reasonable efforts to contact individuals
for purposes of this notice requirement.
These examples indicate that it is not
sufficient to merely send notices to the
individuals’ last known mailing
addresses and illustrate additional steps
that may be used to satisfy these
requirements if the plan sponsor
becomes aware that some individuals
did not receive notice.
The temporary regulations require the
notice to contain the following in order
to satisfy the requirement that the notice
contain sufficient information to enable
plan participants and beneficiaries to
understand the effect of the suspension
of benefits:
• An individualized estimate, on an
annual or monthly basis, of the effect of
the suspension on the participant or
beneficiary. However, if it is not
possible to provide an individualized
estimate on an annual or monthly basis
of the quantitative effect of the
suspension on the participant or
beneficiary, such as in the case of a
suspension that affects the payment of
any future cost-of-living adjustment, a
narrative description of the effect of the
suspension;
• A statement that the plan sponsor
has determined that the plan will
become insolvent unless the proposed
suspension (and, if applicable, the
proposed partition) takes effect, and the
year in which insolvency is projected to
occur without a suspension of benefits
(and, if applicable, a proposed
partition);
• A statement that insolvency of the
plan could result in benefits lower than

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benefits paid under the proposed
suspension and a description of the
projected benefit payments upon
insolvency;
• A description of the proposed
suspension and its effect, including a
description of the different categories or
groups affected by the suspension, how
those categories or groups are defined,
and the formula that is used to calculate
the amount of the proposed suspension
for individuals in each category or
group;
• A description of the effect of the
proposed suspension on the plan’s
projected insolvency;
• A description of whether the
suspension will remain in effect
indefinitely or will expire by its own
terms; and
• A statement describing the right to
vote on the suspension application.
The notice of proposed suspension
may not include false or misleading
information (or omit information so as
to cause the information provided to be
misleading). The notice is permitted to
include information in addition to the
required information that is listed under
this paragraph IX., including
information relating to an application
for partition under section 4233 of
ERISA, provided that it satisfies these
requirements.
The notice of proposed suspension
must be written in a manner that can be
readily understood by the average plan
participant. The temporary regulations
provide that the Treasury Department
will provide a model notice. The use of
the model notice will satisfy the content
requirement and the readability
requirement with respect to the
language provided in the model.
The temporary regulations provide
that notice may be provided in writing
or in electronic form to the extent that
the electronic form is reasonably
accessible to persons to whom the
notice is required to be provided.
Permissible electronic methods include
those permitted under regulations of the
Department of Labor at 29 CFR
2520.104b–1(c) and those described at
§ 54.4980F–1, Q&A–13(c) of the Excise
Tax Regulations.
Section 432(e)(9)(F) provides that the
notice of proposed suspension must be
given ‘‘concurrently’’ with the
submission of an application to the
Treasury Department, but does not
specify a precise timeframe for
satisfying this requirement. Interpreting
‘‘concurrently’’ as meaning either
simultaneously or on the same day was
rejected because it would require the
difficult synchronization of the plan
sponsor’s electronic submission of its
application and its giving of notice in

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35213

written and/or in electronic form.
Because the temporary regulations
require a plan sponsor to submit its
application electronically but authorize
it to give notice in writing, interpreting
the term ‘‘concurrently’’ to allow a plan
sponsor to give written notice a few
days earlier than the electronic
submission of the application will allow
for the receipt of such written notices on
or about the time that a plan sponsor
submits its application. The temporary
regulations thus permit a plan sponsor
to give notice no earlier than four
business days before the submission of
its application.
The temporary regulations also
anticipate that a plan sponsor is
permitted to give written notice no later
than four business days after the
submission of its application. This
period of time will enable the
Department of the Treasury to make a
preliminary ‘‘completeness check’’ of
the application during the first two
business days, and the plan sponsor two
business days thereafter to give the
required notices.12 This approach will
help participants by minimizing the risk
of confusion and plan expense. For
example, if a plan sponsor submits an
incomplete application, compiles the
additional information, and then finds
the individualized estimates that the
plan sponsor already gave to be
inaccurate (or simply takes too long to
compile the additional information), the
plan sponsor would have to re-send the
notices, increasing the likelihood that
the notice would not be understood by
the average plan participant as a result
of receiving two different notices, each
with a different individualized estimate.
Although the temporary regulations
allow plan sponsors to give participants
notice when or before the application is
submitted, sponsors are encouraged to
delay giving notice until after the
Department of the Treasury provides
notification that the application is
complete. If additional individuals who
are entitled to notice are located after
the time notice is required to be
delivered, the plan sponsor must give
those newly located individuals notice
as soon as practicable after they are
located.
The temporary regulations further
provide that a notice of proposed
suspension satisfies the requirement for
notice of a significant reduction in
benefits described in section 4980F that
would otherwise be required as a result
of that suspension of benefits. To the
extent that other reductions accompany
12 The completeness check is described under
paragraph X. in this preamble (‘‘Approval or denial
of an application for suspension of benefits’’).

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a suspension of benefits, such as a
reduction in the future accrual rate
described in section 4980F for active
participants or a reduction in adjustable
benefits under section 432(e)(8), notice
that satisfies the requirements
(including the applicable timing
requirements) of section 4980F or
section 432(e)(8), as applicable, must be
provided.
X. Approval or Denial of an
Application for Suspension of Benefits
The temporary regulations provide
that the plan sponsor of a plan in
critical and declining status for a plan
year that seeks to suspend benefits must
submit an application for approval of
the proposed suspension of benefits to
the Treasury Department. The Treasury
Department will approve, in
consultation with the PBGC and the
Labor Department, a complete
application upon finding that the plan
is eligible for the suspension and has
satisfied the criteria of section
432(e)(9)(C), (D), (E), and (F). An
application must be submitted
electronically.
After receiving a submission, the plan
sponsor will be notified within two
business days whether the submission
constitutes a complete application. If
the submission is a complete
application, the application will be
treated as submitted on the date on
which it was originally submitted to the
Treasury Department. If a submission is
incomplete, the notification will inform
the plan sponsor of the information that
is needed to complete the submission
and give the plan sponsor a reasonable
opportunity to submit a complete
application. In such a case, the complete
application will be treated as submitted
on the date on which the additional
information needed to complete the
application is submitted to the Treasury
Department.
Additional guidance that may be
necessary or appropriate with respect to
applications, including procedures for
submitting applications and the
information required to be included in
a complete application, may be
published in the form of revenue
procedures, notices, or other guidance
published in the Internal Revenue
Bulletin.
In the case of a plan sponsor that is
not submitting an application for
suspension in combination with an
application to PBGC for a plan partition,
the temporary regulations provide that
the application for suspension generally
will not be accepted unless the
proposed effective date of the
suspension is at least nine months after
the date on which the application is

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submitted. This is to ensure adequate
time to review the proposed suspension
without a need to delay the effective
date of the proposed suspension. A
delayed effective date could require
other changes to the design of the
suspension. For example, if, as a result
of a delayed effective date, the age-based
limitation under section 432(e)(9)(D)(ii)
applies to more participants than under
the terms of the proposed suspension,
then benefits of other participants may
be subject to greater reductions in order
to satisfy the limitation in section
432(e)(9)(D)(iv) that the suspension, in
the aggregate, must be reasonably
estimated to achieve, but not materially
exceed, the level necessary to avoid
insolvency. However, in appropriate
circumstances, an earlier effective date
may be permitted. Appropriate
circumstances could include an
application for a proposed suspension
that is a modification of a previous
submission that was withdrawn or
denied.
In the case of an application for
suspension in combination with an
application for partition, the impact of
a delayed effective date for the
suspension would be larger benefits for
retirees rather than a redesign of the
suspension. Accordingly, these
temporary regulations do not apply the
rule described in the preceding
paragraph to such an application. See
Part 4233 of the PBGC regulations for a
coordinated application process that
applies in the case of a plan sponsor
that is submitting an application for
suspension in combination with an
application to PBGC for a plan partition
under section 4233 of ERISA.
The temporary regulations provide
that, no later than 30 days after
receiving a complete application, the
application will be published on the
Web site of the Department of the
Treasury, and the Treasury Department
will publish a notice in the Federal
Register soliciting comments from
contributing employers, employee
organizations, and participants and
beneficiaries of the plan for which an
application was made, and other
interested parties. The notice soliciting
comments will generally request that
comments be submitted no later than 45
days after publication of that notice in
the Federal Register, but the comment
period may be shorter in appropriate
circumstances. Appropriate
circumstances could include an
application for a proposed suspension
that is a modification of a previous
submission that was withdrawn or
denied. Comments received in response
to this notice will be made publicly
available.

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Under the temporary regulations, a
complete application will be deemed
approved unless, within 225 days after
the complete application is submitted,
the Treasury Department notifies the
plan sponsor that its application does
not satisfy one or more of the
requirements for approval. If the
Treasury Department denies a plan
sponsor’s application, the notification of
the denial will detail the specific
reasons for the denial, including
reference to the specific requirement or
requirements not satisfied. If the
Treasury Department approves a plan
sponsor’s application and believes that
the plan is a systemically important
plan, then the Treasury Department will
notify the plan sponsor of that belief
and that it will be required to provide
individual participant data upon
request. This data may be used in the
event of a vote to reject the suspension
in order to assist the Treasury
Department in determining whether to
permit a modification of the rejected
suspension.
The temporary regulations provide
that the Secretary of the Treasury may
appoint a Special Master for purposes of
section 432(e)(9). If a Special Master is
appointed, the Special Master will be an
employee of the Department of the
Treasury, will coordinate the
implementation of the regulations and
the review of applications for the
suspension of benefits and other
appropriate documents, and will
provide recommendations to the
Secretary of the Treasury with respect to
decisions required under these
regulations.
Certain rules relating to the Treasury
Department’s review of an application
under section 432(e)(9)(G) are included
in the proposed regulations.
XI. Participant Vote on Proposed
Benefit Reduction
The temporary regulations provide
that if an application for suspension is
approved by the Treasury Department,
then the Treasury Department, in
consultation with the PBGC and the
Labor Department, will administer a
vote of all plan participants and all
beneficiaries of deceased participants
(eligible voters). Any suspension of
benefits will take effect only after the
vote and after a final authorization to
suspend benefits.
Under the temporary regulations, any
ballot provided by the plan sponsor in
connection with a vote on the
suspension must be approved by the
Treasury Department, in consultation
with the PBGC and the Labor
Department. The ballot must be written
in a manner that can be readily

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understood by the average plan
participant and may not include any
false or misleading information. The
information that is required to be
included in the ballot is described in the
proposed regulations.
The temporary regulations provide
that unless a majority of all eligible
voters vote to reject the suspension, it is
permitted to go into effect. If a majority
of all eligible voters vote to reject the
suspension, the suspension is not
permitted to go into effect, except that
the suspension or a modified
suspension will be permitted to go into
effect if the plan is a systemically
important plan as described later under
this paragraph XI. A plan sponsor is
permitted to submit a new suspension
application to the Treasury Department
for approval in any case in which a
suspension is prohibited from taking
effect as a result of a vote.
The temporary regulations set forth
rules for systemically important plans. If
a majority of all eligible voters vote to
reject the suspension, the Treasury
Department will consult with the PBGC
and the Labor Department to determine
if the plan is a systemically important
plan. The Treasury Department is
required to make this determination no
later than 14 days after the results of the
vote are certified. No later than 30 days
after a determination that the plan is a
systemically important plan, the
Participant and Plan Sponsor Advocate
selected under section 4004 of ERISA
may submit recommendations to the
Treasury Department with respect to the
suspension or any revisions to the
suspension.
If a plan is a systemically important
plan for which a majority of all eligible
voters vote to reject the suspension,
then the Treasury Department is
required to either permit the
implementation of the suspension that
was rejected by the vote or permit the
implementation of a modification of that
suspension. Under any such
modification, the plan must be projected
to avoid insolvency in accordance with
section 432(e)(9)(D)(iv). No later than 60
days after the results of a vote to reject
a suspension are certified, the Treasury
Department will notify the plan sponsor
that the suspension or modified
suspension is permitted to be
implemented.
The temporary regulations define a
systemically important plan as a plan
with respect to which the PBGC projects
that the present value of financial
assistance payments will exceed $1.0
billion if the suspension is not
implemented. For calendar years
beginning after 2015, this dollar amount
will be replaced by an amount equal to

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the product of the dollar amount and a
fraction, the numerator of which is the
contribution and benefit base
(determined under section 230 of the
Social Security Act) for the preceding
calendar year and the denominator of
which is the contribution and benefit
base for calendar year 2014. If that
amount is not a multiple of $1.0 million,
it will be rounded to the next lowest
multiple of $1.0 million.
The temporary regulations provide
that, in any case in which a proposed
suspension (or a modification of a
proposed suspension) is permitted to go
into effect, the Treasury Department, in
consultation with the PBGC and the
Labor Department, will issue a final
authorization to suspend with respect to
the suspension. If a suspension is
permitted to go into effect following a
vote, the final authorization will be
issued no later than seven days after the
vote. If a suspension is permitted to go
into effect following a determination
that the plan is a systemically important
plan, the final authorization will be
issued at a time sufficient to allow the
implementation of the suspension prior
to the end of the 90-day period
beginning on the date the results of the
vote rejecting the suspension are
certified. Under the temporary
regulations, no later than 60 days after
the certification, the Treasury
Department will notify the plan sponsor
that the suspension that was rejected by
the vote or a modified suspension is
permitted to be implemented.
The temporary regulations provide
that, in any case in which a suspension
of benefits with respect to a plan is
made in combination with a partition of
the plan under section 4233 of ERISA,
the suspension of benefits is not
permitted to take effect prior to the
effective date of the partition.
Effective/Applicability Date
These regulations apply on and after
June 17, 2015 and expire on June 15,
2018.
Availability of IRS Documents
For copies of recently issued revenue
procedures, revenue rulings, notices and
other guidance published in the Internal
Revenue Bulletin, please visit the IRS
Web site at http://www.irs.gov or contact
the Superintendent of Documents, U.S.
Government Printing Office,
Washington, DC 20402.
Special Analyses
Certain IRS regulations, including this
one, are exempt from the requirements
of Executive Order 12866, as
supplemented and reaffirmed by
Executive Order 13563. Therefore, a

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35215

regulatory impact assessment is not
required. It also has been determined
that section 553(b) of the Administrative
Procedure Act (5 U.S.C. chapter 5) does
not apply to these regulations. For the
applicability of the Regulatory
Flexibility Act (5 U.S.C. chapter 6)
please refer to the Special Analyses
section of the preamble to the crossreferenced notice of proposed
rulemaking published in the Proposed
Rules section in this issue of the Federal
Register. Pursuant to section 7805(f) of
the Code, these regulations have been
submitted to the Chief Counsel for
Advocacy of the Small Business
Administration for comment on their
impact on small business.
Contact Information
For general questions regarding these
regulations, please contact the
Department of the Treasury at (202)
622–1559 (not a toll-free number). For
information regarding a specific
application for a suspension of benefits,
please contact the Department of the
Treasury at (202) 622–1534 (not a tollfree number).
List of Subjects
26 CFR Part 1
Income taxes, reporting and
recordkeeping requirements.
26 CFR Part 602
Reporting and recordkeeping
requirements.
Amendments to the Regulations
Accordingly, 26 CFR parts 1 and 602
are amended as follows:
PART 1—INCOME TAXES
Paragraph 1. The authority citation
for part 1 continues to read in part as
follows:

■

Authority: 26 U.S.C. 7805 * * *

Par. 2. Section 1.432(e)(9)–1T is
added to read as follows:

■

§ 1.432(e)(9)–1T Benefit suspensions for
multiemployer plans in critical and
declining status (temporary).

(a) General rules on suspension of
benefits—(1) General rule. Subject to
section 432(e)(9)(B) through (I) and
paragraphs (b) through (h) of this
section, the plan sponsor of a
multiemployer plan that is in critical
and declining status (within the
meaning of section 432(b)(6)) for a plan
year may, by plan amendment adopted
in the plan year, implement a
suspension of benefits that the plan
sponsor deems appropriate. Such a
suspension is permitted

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notwithstanding the anti-cutback
provisions of section 411(d)(6).
(2) Adoption of plan terms
inconsistent with suspension
requirements—(i) General rule. A plan
may implement (or continue to
implement) a reduction of benefits
pursuant to a suspension of benefits
only if the terms of the plan are
consistent with the requirements of
section 432(e)(9) and this section.
(ii) Changes in level of suspension.
[Reserved]
(3) Organization of the regulation.
This paragraph (a) contains definitions
and general rules relating to a
suspension of benefits by a
multiemployer plan under section
432(e)(9). Paragraph (b) of this section
defines a suspension of benefits and
describes the length of a suspension, the
treatment of beneficiaries and alternate
payees under this section, and the
requirement to select a retiree
representative. Paragraph (c) of this
section prescribes certain rules for the
actuarial certification and plan-sponsor
determinations that must be made in
order for a plan to suspend benefits.
Paragraph (d) of this section describes
certain limitations on suspensions of
benefits. Paragraph (e) of this section is
reserved for rules on benefit
improvements under section
432(e)(9)(E). Paragraph (f) of this section
describes the requirement to provide
notice in connection with an
application to suspend benefits.
Paragraph (g) of this section describes
certain requirements with respect to the
approval or denial of an application for
a suspension of benefits. Paragraph (h)
of this section contains certain rules
relating to the vote on an approved
suspension, systemically important
plans, and the issuance of a final
authorization to suspend benefits.
Paragraph (j) of this section provides the
effective/applicability date of this
section. Paragraph (k) provides the
expiration date.
(4) Definitions. The following
definitions apply for purposes of this
section—
(i) Pay status. A person is in pay
status under a multiemployer plan if, as
described in section 432(j)(6), at any
time during the current plan year, the
person is a participant, beneficiary, or
alternate payee under the plan and is
paid an early, late, normal, or disability
retirement benefit under the plan (or a
death benefit under the plan related to
a retirement benefit).
(ii) Plan sponsor. The term plan
sponsor means the association,
committee, joint board of trustees, or
other similar group of representatives of
the parties that establishes or maintains

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the multiemployer plan. However, in
the case of a plan described in section
404(c), or a continuation of such a plan,
the term plan sponsor means the
association of employers that is the
employer settlor of the plan.
(iii) Effective date of suspension of
benefits. [Reserved]
(b) Definition of suspension of
benefits and related rules—(1) In
general—(i) Definition. For purposes of
this section, the term suspension of
benefits means the temporary or
permanent reduction, pursuant to the
terms of the plan, of any current or
future payment obligation of the plan
with respect to any participant under
the plan. A suspension of benefits may
apply with respect to a participant of
the plan regardless of whether the
participant, beneficiary, or alternate
payee commenced receiving benefits
before the effective date of the
suspension of benefits.
(ii) Plan not liable for suspended
benefits. If a plan pays a reduced level
of benefits pursuant to a suspension of
benefits that complies with the
requirements of section 432(e)(9) and
this section, then the plan is not liable
for any benefits not paid as a result of
the suspension.
(2) Length of suspension—(i) In
general. A suspension of benefits may
be of indefinite duration or may expire
as of a date that is specified in the plan
amendment implementing the
suspension.
(ii) Effect of a benefit improvement. A
plan sponsor may amend the plan to
eliminate some or all of a suspension of
benefits, provided that the amendment
satisfies the requirements that apply to
a benefit improvement under section
432(e)(9)(E), in accordance with the
rules of paragraph (e) of this section.
(3) Treatment of beneficiaries and
alternate payees. Except as otherwise
specified in this section, all references
to suspensions of benefits, increases in
benefits, or resumptions of suspended
benefits with respect to participants also
apply with respect to benefits of
beneficiaries or alternate payees (as
defined in section 414(p)(8)) of
participants.
(4) Retiree representative—(i) In
general—(A) Requirement to select
retiree representative. The plan sponsor
of a plan that intends to submit an
application for a suspension of benefits
and that has reported a total of 10,000
or more participants as of the end of the
plan year for the most recently filed
Form 5500, ‘‘Annual Return/Report of
Employee Benefit Plan,’’ must select a
retiree representative. The plan sponsor
must select the retiree representative at
least 60 days before the date the plan

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sponsor submits an application to
suspend benefits. The retiree
representative must be a plan
participant who is in pay status. The
retiree representative may or may not be
a plan trustee.
(B) Role of retiree representative. The
role of the retiree representative is to
advocate for the interests of the retired
and deferred vested participants and
beneficiaries of the plan throughout the
suspension approval process. In the
discretion of the plan sponsor, the
retiree representative may continue in
this role throughout the period of the
benefit suspension.
(ii) Reasonable expenses from plan.
The plan must pay reasonable expenses
incurred by the retiree representative,
including reasonable expenses for legal
and actuarial support, commensurate
with the plan’s size and funded status.
(iii) Disclosure of information. Upon
request, the plan sponsor must promptly
provide the retiree representative with
relevant information, such as plan
documents and data, that is reasonably
necessary to enable the retiree
representative to perform the role
described in paragraph (b)(4)(i)(B) of
this section.
(iv) Special rules relating to fiduciary
status. See section 432(e)(9)(B)(v)(III) for
rules relating to the fiduciary status of
a retiree representative.
(v) Retiree representative for other
plans. The plan sponsor of a plan that
has reported fewer than 10,000
participants as of the end of the plan
year for the most recently filed Form
5500, ‘‘Annual Return/Report of
Employee Benefit Plan’’ is permitted to
select a retiree representative. The rules
in this paragraph (b)(4) (other than the
rules in the first two sentences of
paragraph (b)(4)(i)(A) of this section
concerning the size of the plan and the
timing of the appointment of the retiree
representative) apply to such a
representative.
(c) Conditions for suspension—(1) In
general—(i) Actuarial certification and
initial-plan-sponsor determinations.
The plan sponsor of a plan in critical
and declining status for a plan year may
suspend benefits only if the actuarial
certification requirement in paragraph
(c)(2) of this section and the initial-plansponsor determinations requirement in
paragraph (c)(3) of this section are met.
(ii) Annual requirement to make plansponsor determinations. [Reserved]
(2) Actuarial certification. A plan
satisfies the actuarial certification
requirement of this paragraph (c)(2) if,
taking into account the proposed
suspension of benefits (and, if
applicable, a proposed partition of the
plan under section 4233 of the

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Employee Retirement Income Security
Act of 1974, Public Law 93–406 (88 Stat.
829 (1974)), as amended (ERISA)), the
plan’s actuary certifies that the plan is
projected to avoid insolvency within the
meaning of section 418E, assuming the
suspension of benefits continues until it
expires by its own terms or if no such
expiration date is set, indefinitely.
(3) Initial-plan-sponsor
determinations—(i) General rule. A plan
satisfies the initial-plan-sponsor
determinations requirement of this
paragraph (c)(3) only if the plan sponsor
determines that—
(A) All reasonable measures to avoid
insolvency, within the meaning of
section 418E, have been taken; and
(B) The plan is projected to become
insolvent within the meaning of section
418E unless the proposed suspension of
benefits (or another suspension of
benefits under section 432(e)(9)) is
implemented for the plan.
(ii) Factors. In making its
determination that all reasonable
measures to avoid insolvency, within
the meaning of section 418E, have been
taken, the plan sponsor may take into
account the following non-exclusive list
of factors—
(A) Current and past contribution
levels;
(B) Levels of benefit accruals
(including any prior reductions in the
rate of benefit accruals);
(C) Prior reductions (if any) of
adjustable benefits;
(D) Prior suspensions (if any) of
benefits under this section;
(E) The impact on plan solvency of
the subsidies and ancillary benefits
available to active participants;
(F) Compensation levels of active
participants relative to employees in the
participants’ industry generally;
(G) Competitive and other economic
factors facing contributing employers;
(H) The impact of benefit and
contribution levels on retaining active
participants and bargaining groups
under the plan;
(I) The impact of past and anticipated
contribution increases under the plan
on employer attrition and retention
levels; and
(J) Measures undertaken by the plan
sponsor to retain or attract contributing
employers.
(iii) Reliance on certification of
critical and declining status. For
purposes of the insolvency projection
under paragraph (c)(3)(i)(B) of this
section, a plan sponsor may rely on the
actuarial certification made pursuant to
section 432(b)(3)(A)(i) that the plan is in
critical and declining status for the plan
year in making the determination that

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the plan is projected to become
insolvent unless benefits are suspended.
(4) Annual-plan-sponsor
determinations. [Reserved]
(5) Failure to make annual-plansponsor determinations. [Reserved]
(d) Limitations on suspension—(1) In
general. Any suspension of benefits
with respect to a participant made by a
plan sponsor pursuant to this section is
subject to the individual limitations of
sections 432(e)(9)(D)(i) through (iii), in
accordance with the rules of paragraphs
(d)(2) through (d)(4) of this section.
After applying the individual
limitations in sections 432(e)(9)(D)(i)
through (iii), in accordance with the
rules of paragraphs (d)(2) through (d)(4)
of this section, the overall size and
distribution of the suspension is subject
to the aggregate limitations of sections
432(e)(9)(D)(iv) and (vi) in accordance
with the rules of paragraphs (d)(5) and
(d)(6) of this section. See section
432(e)(9)(D)(vii) for additional rules
applicable to certain plans.
(2) Guarantee-based limitation—(i)
General rule. The monthly benefit with
respect to any participant may not be
reduced below 110 percent of the
monthly benefit payable to a
participant, beneficiary, or alternate
payee that would be guaranteed by the
Pension Benefit Guaranty Corporation
(PBGC) under section 4022A of ERISA
if the plan were to become insolvent as
of the effective date of the suspension.
(ii) PBGC guarantee. [Reserved]
(iii) Calculation of accrual rate.
[Reserved]
(iv) Special rules for non-vested
participants. [Reserved]
(v) Examples. [Reserved]
(3) Age-based limitation. [Reserved]
(4) Disability-based limitation—(i)
General rule. Benefits based on
disability (as defined under the plan)
may not be suspended.
(ii) Benefits based on disability.
[Reserved]
(5) Limitation on aggregate size of
suspension. [Reserved]
(6) Equitable distribution. [Reserved]
(7) Effective date of suspension made
in combination with partition. In any
case in which a suspension of benefits
with respect to a plan is made in
combination with a partition of the
plan, the suspension of benefits may not
take effect prior to the effective date of
the partition. This requirement will not
be satisfied if the partition order under
section 4233 of ERISA has not been
provided to the Secretary of the
Treasury by the last day of the 225-day
period described in paragraph (g)(3)(i) of
this section.
(e) Benefit improvements. [Reserved]
(f) Notice requirements—(1) In
general. No suspension of benefits may

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35217

be made pursuant to this section unless
notice of the proposed suspension has
been given by the plan sponsor to—
(i) All participants, beneficiaries of
deceased participants, and alternate
payees under the plan (regardless of
whether their benefits are proposed to
be suspended), except those who cannot
be contacted by reasonable efforts;
(ii) Each employer who has an
obligation to contribute (within the
meaning of section 4212(a) of ERISA)
under the plan; and
(iii) Each employee organization
which, for purposes of collective
bargaining, represents plan participants
employed by an employer described in
paragraph (f)(1)(ii) of this section.
(2) Content of notice—(i) In general.
The notice described under paragraph
(f)(1) of this section must contain—
(A) Sufficient information to enable a
participant or beneficiary to understand
the effect of any suspension of benefits,
including an individualized estimate
(on an annual or monthly basis) of the
effect on that participant or beneficiary;
(B) A description of the factors
considered by the plan sponsor in
designing the benefit suspension;
(C) A statement that the application
for approval of any suspension of
benefits will be available on the Web
site of the Department of the Treasury
and that comments on the application
will be accepted;
(D) Information as to the rights and
remedies of plan participants and
beneficiaries;
(E) If applicable, a statement
describing the appointment of a retiree
representative, the date of appointment
of the representative, the role and
responsibilities of the retiree
representative, identifying information
about the retiree representative
(including whether the representative is
a plan trustee), and how to contact the
retiree representative; and
(F) Information on how to contact the
Department of the Treasury for further
information and assistance where
appropriate.
(ii) Description of suspension of
benefits. The notice described under
paragraph (f)(1) of this section will not
satisfy the requirements of paragraph
(f)(2)(i) of this section unless it includes
the following—
(A) If it is not possible to provide an
individualized estimate on an annual or
monthly basis of the quantitative effect
of the suspension on a participant or
beneficiary, such as in the case of a
suspension that affects the payment of
any future cost-of-living adjustment, a
narrative description of the effect of the
suspension;

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(B) A statement that the plan sponsor
has determined that the plan will
become insolvent unless the proposed
suspension takes effect, and the year in
which insolvency is projected to occur
without a suspension of benefits;
(C) A statement that insolvency of the
plan could result in benefits lower than
benefits paid under the proposed
suspension and a description of the
projected benefit payments upon
insolvency;
(D) A description of the proposed
suspension and its effect, including a
description of the different categories or
groups affected by the suspension, how
those categories or groups are defined,
and the formula that is used to calculate
the amount of the proposed suspension
for individuals in each category or
group;
(E) A description of the effect of the
proposed suspension on the plan’s
projected insolvency;
(F) A description of whether the
suspension will remain in effect
indefinitely or will expire by its own
terms; and
(G) A statement describing the right to
vote on the suspension application.
(iii) Readability requirement. A notice
given under paragraph (f)(1) of this
section must be written in a manner that
is readily understandable by the average
plan participant.
(iv) Model notice. The Secretary of the
Treasury will provide a model notice.
The use of the model notice will satisfy
the content and readability
requirements of this paragraph (f)(2)
with respect to the language provided in
the model.
(3) Form and manner—(i) Timing—
(A) In general. A notice under paragraph
(f)(1) of this section must be given no
earlier than four business days before
the date on which an application is
submitted and no later than two
business days after the Secretary of the
Treasury notifies the plan sponsor that
it has submitted a complete application,
as described in paragraph (g)(1)(ii) of
this section.
(B) Timing for lost participants. If
additional individuals who are entitled
to notice are located after the time
period in paragraph (f)(3)(i)(A) of this
section has elapsed, then the plan
sponsor must give notice to these
individuals as soon as practicable
thereafter.
(ii) Method of delivery of notice—(A)
Written or electronic delivery. A notice
given under paragraph (f)(1) of this
section may be provided in writing. It
may also be provided in electronic form
to the extent that the form is reasonably
accessible to persons to whom the
notice is required to be provided.

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Permissible electronic methods include
those permitted under regulations of the
Department of Labor at 29 CFR
2520.104b–1(c) and those described at
§ 54.4980F–1, Q&A–13(c) of the Excise
Tax Regulations.
(B) No alternative method of delivery.
[Reserved]
(iii) Additional information in notice.
A notice given under paragraph (f)(1) of
this section is permitted to include
information in addition to the
information that is required under
paragraph (f)(2) of this section,
including, if applicable, information
relating to an application for partition
under section 4233 of ERISA (such as
the model notice at Appendix A of 29
CFR part 4233), provided that the
requirements of paragraph (f)(3)(iv) of
this section are satisfied.
(iv) No false or misleading
information. A notice given under
paragraph (f)(1) of this section may not
include false or misleading information
(or omit information in a manner that
causes the information provided to be
misleading).
(4) Other notice requirement. Any
notice given under paragraph (f)(1) of
this section satisfies the requirement for
notice of a significant reduction in
benefits described in section 4980F that
would otherwise be required as a result
of that suspension of benefits. To the
extent that there are other reductions
that accompany a suspension of
benefits, such as a reduction in the
future accrual rate described in section
4980F for active participants or a
reduction in adjustable benefits under
section 432(e)(8), notice that satisfies
the requirements (including the
applicable timing requirements) of
section 4980F or section 432(e)(8), as
applicable, must be provided.
(5) Examples. The following examples
illustrate the requirement in paragraph
(f)(1)(i) of this section to give notice to
all participants, beneficiaries of
deceased participants, and alternate
payees, except those who cannot be
contacted by reasonable efforts.
Example 1. (i) Facts. A plan sponsor
distributes notice of a proposed suspension
of benefits to plan participants, beneficiaries
of deceased participants, and alternate
payees by mailing the notice to their last
known mailing addresses, using the same
information that it used to send the most
recent annual funding notice. Of 5,000 such
notices, 300 were returned as undeliverable.
The plan sponsor takes no additional steps to
contact the individuals for whom the notice
was returned as undeliverable.
(ii) Conclusion. The plan sponsor did not
make any effort beyond the initial mailing to
locate the 300 individuals for whom the
notice was returned as undeliverable.
Therefore, the plan sponsor did not satisfy

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the requirement to provide notice to all
participants, beneficiaries of deceased
participants, and alternate payees under the
plan (regardless of whether their benefits are
proposed to be suspended), except those who
cannot be contacted by reasonable efforts.
Example 2. (i) Facts. The facts are the
same as Example 1, but the plan sponsor
contacts the bargaining parties to locate the
missing individuals for whom the notice was
returned as undeliverable. The plan sponsor
then uses an Internet search tool, a credit
reporting agency, and a commercial locator
service to search for individuals for whom it
was not able to obtain updated information
from bargaining parties. Through these
efforts, the plan sponsor locates the updated
addresses of 250 of the 300 individuals
whom it previously failed to contact. The
plan sponsor mails notices to those
individuals within one week of locating
them.
(ii) Conclusion. By using effective search
methods to find the previously missing
individuals and promptly mailing the notice
of suspension to them, the plan sponsor has
satisfied the requirement to provide notice to
all participants, beneficiaries of deceased
participants, and alternate payees under the
plan (regardless of whether their benefits are
proposed to be suspended), except those who
cannot be contacted by reasonable efforts.

(g) Approval or denial of an
application for suspension of benefits—
(1) Application—(i) In general. The plan
sponsor of a plan in critical and
declining status for a plan year that
seeks to suspend benefits must submit
an application for approval of the
proposed suspension of benefits to the
Secretary of the Treasury. The Secretary
of the Treasury will approve, in
consultation with the PBGC and the
Secretary of Labor, a complete
application described in paragraph
(g)(1)(ii) of this section upon finding
that the plan is eligible for the
suspension and has satisfied the criteria
of section 432(e)(9)(C), (D), (E), and (F),
in accordance with the rules of
paragraphs (c), (d), (e), and (f) of this
section.
(ii) Complete application. After
receiving a submission, the plan
sponsor will be notified within two
business days whether the submission
constitutes a complete application. A
complete application will be treated as
submitted on the date that it was
originally submitted to the Secretary of
the Treasury. If a submission is
incomplete, the notification will inform
the plan sponsor of the information that
is needed to complete the submission
and give the plan sponsor a reasonable
opportunity to submit a complete
application. In such a case, the complete
application will be treated as submitted
on the date on which the additional
information needed to complete the
application is submitted to the Secretary
of the Treasury.

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(iii) Submission of application. An
application described in this paragraph
(g)(1) must be submitted electronically.
(iv) Requirements for application.
Additional guidance that may be
necessary or appropriate with respect to
applications described in this paragraph
(g)(1), including procedures for
submitting applications and the
information required to be included in
a complete application, may be
published in the form of revenue
procedures, notices, or other guidance
in the Internal Revenue Bulletin.
(v) Requirement to provide adequate
time to process application. An
application for suspension that is not
submitted in combination with an
application to PBGC for a plan partition
under section 4223 of ERISA generally
will not be accepted unless the
proposed effective date of the
suspension is at least nine months from
the date on which the application is
submitted. However, in appropriate
circumstances, an earlier effective date
may be permitted.
(vi) Plan sponsors that also apply for
partition. See Part 4233 of the PBGC
regulations for a coordinated
application process that applies in the
case of a plan sponsor that is submitting
an application for suspension in
combination with an application to
PBGC for a plan partition under section
4233 of ERISA.
(2) Solicitation of comments—(i) In
general. Not later than 30 days after
receipt of a complete application
described in paragraph (g)(1) of this
section—
(A) The application for approval of
the suspension of benefits will be
published on the Web site of the
Department of the Treasury; and
(B) The Secretary of the Treasury will
publish a notice in the Federal Register
soliciting comments from contributing
employers, employee organizations, and
participants and beneficiaries of the
plan for which an application was
made, and other interested parties.
(ii) Public comments. The notice
described in paragraph (g)(2)(i)(B) of
this section will generally request that
comments be submitted no later than 45
days after publication of that notice in
the Federal Register, but the comment
period may be shorter in appropriate
circumstances. Comments received in
response to this notice will be made
publicly available.
(3) Approval or denial—(i) Deemed
approval. A complete application
described in paragraph (g)(1)(ii) of this
section will be deemed approved
unless, within 225 days following the
date that the complete application is
submitted, the Secretary of the Treasury

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notifies the plan sponsor that its
application does not satisfy one or more
of the requirements described in this
paragraph (g).
(ii) Notice of denial. If the Secretary
of the Treasury denies a plan sponsor’s
application, the notification of the
denial will detail the specific reasons
for the denial, including reference to the
specific requirement not satisfied.
(iii) Special rules for systemically
important plans. If the Secretary of the
Treasury approves a plan sponsor’s
application and the Secretary believes
that the plan is or may be a systemically
important plan (as defined in paragraph
(h)(5)(iv) of this section), the Secretary
will notify the plan sponsor of that
belief and that it will be required to
provide individual participant data
upon request. In such a case, this data
would be used in the event of a vote to
reject the suspension (as described in
paragraph (h)(4) of this section) in order
to assist the Secretary in determining
whether to permit a modification of the
rejected suspension.
(iv) Agreement to stay 225-day period.
[Reserved]
(4) Consideration of certain factors.
[Reserved]
(5) Standard for accepting plan
sponsor determinations. [Reserved]
(6) Plan-sponsor certifications with
respect to plan amendments. [Reserved]
(7) Special Master. The Secretary of
the Treasury may appoint a Special
Master for purposes of this section. If a
Special Master is appointed, the Special
Master will coordinate the
implementation of this section and the
review of applications for the
suspension of benefits and other
appropriate documents, and will
provide recommendations to the
Secretary of the Treasury with respect to
decisions required under this section.
(h) Participant vote on proposed
benefit reduction—(1) Requirement for
vote—(i) In general. If an application for
suspension is approved under
paragraph (g) of this section, then the
Secretary of the Treasury, in
consultation with the PBGC and the
Secretary of Labor, will administer a
vote of all plan participants and
beneficiaries of deceased participants
(eligible voters), as described in section
432(e)(9)(H) and this paragraph (h). Any
suspension of benefits will take effect
only after the vote and after a final
authorization to suspend benefits under
paragraph (h)(6) of this section.
(ii) Communication by plan sponsor.
[Reserved]
(2) Administration of vote. [Reserved]
(3) Ballots—(i) In general. [Reserved]
(ii) Additional rules—(A) Readability
requirement. A ballot provided under

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35219

section 432(e)(9)(H)(iii), in accordance
with the rules of paragraph (h)(3)(i) of
this section, must be written in a
manner that is readily understandable
by the average plan participant.
(B) No false or misleading
information. A ballot provided under
section 432(e)(9)(H)(iii), in accordance
with the rules of paragraph (h)(3)(i) of
this section, may not include false or
misleading information (or omit
information in a manner that causes the
information provided to be misleading).
(iii) Ballot must be approved. Any
ballot provided under section
432(e)(9)(H)(iii), in accordance with the
rules of paragraph (h)(3)(i) of this
section, must be approved by the
Secretary of the Treasury, in
consultation with the PBGC and the
Secretary of Labor, before it is provided.
(4) Implementing suspension
following vote—(i) In general. Unless a
majority of all eligible voters vote to
reject the suspension that was approved
under paragraph (g) of this section, the
suspension will be permitted to go into
effect. If a majority of all eligible voters
vote to reject the suspension that was
approved under paragraph (g) of this
section, a suspension of benefits will
not be permitted to go into effect except
as provided under paragraph (h)(5)(iii)
of this section relating to the
implementation of a suspension for a
systemically important plan (as defined
in paragraph (h)(5)(iv) of this section).
(ii) Effect of not sending ballot.
[Reserved]
(5) Systemically important plans—(i)
In general. If a majority of all eligible
voters vote to reject the suspension that
was approved under paragraph (g) of
this section, the Secretary of the
Treasury will consult with the PBGC
and the Secretary of Labor to determine
if the plan is a systemically important
plan. This determination will be made
no later than 14 days after the results of
the vote are certified.
(ii) Recommendations from
Participant and Plan Sponsor Advocate.
Not later than 30 days after a
determination that the plan is a
systemically important plan, the
Participant and Plan Sponsor Advocate
selected under section 4004 of ERISA
may submit recommendations to the
Secretary of the Treasury with respect to
the suspension that was approved under
paragraph (g) of this section or any
revisions to the suspension.
(iii) Implementation of original or
modified suspension by systemically
important plans. If a plan is a
systemically important plan for which a
majority of all eligible voters vote to
reject the suspension that was approved
under paragraph (g) of this section, then

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Federal Register / Vol. 80, No. 118 / Friday, June 19, 2015 / Rules and Regulations

the Secretary of the Treasury must
determine whether to permit the
implementation of the suspension that
was approved under paragraph (g) of
this section or whether to permit the
implementation of a modification of that
suspension. Under any such
modification, the plan must be projected
to avoid insolvency in accordance with
section 432(e)(9)(D)(iv). No later than 60
days after the results of a vote to reject
a suspension are certified, the Secretary
of the Treasury will notify the plan
sponsor that the suspension or modified
suspension is permitted to be
implemented.
(iv) Systemically important plan
defined—(A) In general. For purposes of
this paragraph (h)(5), a systemically
important plan is a plan with respect to
which the PBGC projects that the
present value of financial assistance
payments will exceed $1.0 billion if the
suspension is not implemented.
(B) Indexing. For calendar years
beginning after 2015, the dollar amount
specified in paragraph (h)(5)(iv)(A) of
this section will be replaced with an
amount equal to the product of the
dollar amount and a fraction, the
numerator of which is the contribution
and benefit base (determined under
section 230 of the Social Security Act)
for the preceding calendar year and the
denominator of which is the
contribution and benefit base for
calendar year 2014. If the amount
otherwise determined under this
paragraph (h)(5)(iv)(B) is not a multiple
of $1.0 million, the amount will be
rounded to the next lowest multiple of
$1.0 million.
(6) Final authorization to suspend—(i)
In general. In any case in which a
suspension is permitted to go into effect
following a vote pursuant to section
432(e)(9)(H)(ii) and paragraph (h)(4) of
this section, the Secretary of the
Treasury, in consultation with the PBGC
and the Secretary of Labor, will issue a
final authorization to suspend with
respect to the suspension not later than
seven days after the vote.
(ii) Systemically important plans. In
any case in which a suspension is
permitted to go into effect following a
determination under paragraph (h)(5) of
this section that the plan is a
systemically important plan, the
Secretary of the Treasury, in
consultation with the PBGC and the
Secretary of Labor, will issue a final
authorization to suspend, at a time
sufficient to allow the implementation
of the suspension prior to the end of the
90-day period beginning on the date the
results of the vote are certified.
(iii) Plan partitions. Notwithstanding
any other provision of this section, in

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any case in which a suspension of
benefits with respect to a plan is made
in combination with a partition of the
plan, the suspension of benefits is not
permitted to take effect prior to the
effective date of the partition.
(i) [Reserved].
(j) Effective/applicability date. This
section applies on and after June 17,
2015.
(k) Expiration date. The applicability
of this section expires on June 15, 2018.
PART 602—OMB CONTROL NUMBERS
UNDER THE PAPERWORK
REDUCTION ACT
Par. 3. The authority citation for part
602 continues to read as follows:

■

Authority: 26 U.S.C. 7805

Par. 4. In § 602.101, paragraph (b) is
amended by adding the following entry
in numerical order to the table to read
as follows:

■

§ 602.101

*

OMB Control numbers.

*
*
(b) * * *

*

*

CFR Part or section where
identified and described
*
*
*
1.432(e)(9)–1T ......................
*

*

*

Current OMB
control no.
*

*
1545–2260

*

*

John Dalrymple,
Deputy Commissioner for Services and
Enforcement.
Approved: June 9, 2015.
Mark J. Mazur,
Assistant Secretary of the Treasury (Tax
Policy).
[FR Doc. 2015–14945 Filed 6–17–15; 11:15 am]
BILLING CODE 4830–01–P

PENSION BENEFIT GUARANTY
CORPORATION
29 CFR Part 4233
RIN 1212–AB29

Partitions of Eligible Multiemployer
Plans
Pension Benefit Guaranty
Corporation.
ACTION: Interim final rule.
AGENCY:

This document contains an
interim final rule prescribing the
application process and notice
requirements for partitions of eligible
multiemployer plans under title IV of
the Employee Retirement Income
Security Act of 1974 (ERISA), as

SUMMARY:

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amended by the Multiemployer Pension
Reform Act of 2014 (MPRA). The
interim final rule is published pursuant
to section 122 of MPRA in order to carry
out the provisions of section 4233 of
ERISA. PBGC is soliciting public
comments on the interim final
regulation.
DATES: Effective June 19, 2015.
Comments must be submitted on or
before August 18, 2015.
ADDRESSES: Comments, identified by
Regulation Identifier Number (RIN)
1212–AB29, may be submitted by any of
the following methods:
• Federal eRulemaking Portal: http://
www.regulations.gov. Follow the Web
site instructions for submitting
comments.
• Email: [email protected].
• Fax: 202–326–4112.
• Mail or Hand Delivery: Regulatory
Affairs Group, Office of the General
Counsel, Pension Benefit Guaranty
Corporation, 1200 K Street NW.,
Washington, DC 20005–4026. All
submissions must include the
Regulation Identifier Number for this
rulemaking (RIN 1212–AB29).
Comments received, including personal
information provided, will be posted to
www.pbgc.gov. Copies of comments may
also be obtained by writing to
Disclosure Division, Office of the
General Counsel, Pension Benefit
Guaranty Corporation, 1200 K Street
NW., Washington, DC 20005–4026, or
calling 202–326–4040 during normal
business hours. (TTY and TDD users
may call the Federal relay service tollfree at 1–800–877–8339 and ask to be
connected to 202–326–4040.)
FOR FURTHER INFORMATION CONTACT:
Joseph J. Shelton (shelton.joseph@
pbgc.gov), Assistant General Counsel,
Office of the General Counsel, Pension
Benefit Guaranty Corporation, 1200 K
Street NW., Washington, DC 20005–
4026; 202–326–4400, ext. 6559;
Kimberly J. Duplechain
([email protected]),
Deputy Assistant General Counsel,
Office of the General Counsel, 202–326–
4400, ext. 3028.
SUPPLEMENTARY INFORMATION:
Executive Summary
Purpose of the Regulatory Action
This interim final rule implements
provisions of the Multiemployer
Pension Reform Act of 2014 (MPRA) 1
that prescribe the statutory conditions
and notice requirements that must be
met before PBGC may partition an
1 Division O of the Consolidated and Further
Continuing Appropriations Act, 2015, Public Law
113–235 (128 Stat. 2130 (2014)).

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