Td 9767

Federal Register / Vol. 81, No. 87 / Thursday, May 5, 2016 / Rules and Regulations
end of the fishing year during which the
tests were performed. All scale test
report forms must be signed by the
operator.
*
*
*
*
*
■ 5. In § 660.150, revise paragraphs
(b)(1)(ii) introductory text and
(b)(1)(ii)(A) and (C) to read as follows:
§ 660.150

Mothership (MS) Coop Program.

*
*
*
*
(b) * * *
(1) * * *
(ii) Mothership vessel responsibilities.
The owner and operator of a mothership
vessel must:
(A) Recordkeeping and reporting.
Maintain a valid declaration as specified
at § 660.13(d); maintain records as
specified at § 660.113(a); and maintain
and submit all records and reports
specified at § 660.113(c) including,
economic data, scale tests records, cease
fishing reports, and cost recovery.
*
*
*
*
*
(C) Catch weighing requirements. The
owner and operator of a mothership
vessel must:
(1) Ensure that all catch is weighed in
its round form on a NMFS-approved
scale that meets the requirements
described in section § 660.15(b);
(2) Provide a NMFS-approved
platform scale, belt scale, and test
weights that meet the requirements
described in section § 660.15(b).
*
*
*
*
*
■ 6. In § 660.160, revise paragraphs
(b)(1)(ii) introductory text and
(b)(1)(ii)(A) and (C) to read as follows:

weights that meet the requirements
described in § 660.15(b).
*
*
*
*
*
[FR Doc. 2016–10476 Filed 5–4–16; 8:45 am]
BILLING CODE 3510–22–P

DEPARTMENT OF THE TREASURY
Internal Revenue Service

*

§ 660.160 Catcher/processor (C/P) Coop
Program.

ehiers on DSK5VPTVN1PROD with RULES

*

*
*
*
*
(b) * * *
(1) * * *
(ii) Catcher/processor vessel
responsibilities. The owner and operator
of a catcher/processor vessel must:
(A) Recordkeeping and reporting.
Maintain a valid declaration as specified
at § 660.13(d); maintain records as
specified at § 660.113(a); and maintain
and submit all records and reports
specified at § 660.113(d) including,
economic data, scale tests records, cease
fishing reports, and cost recovery.
*
*
*
*
*
(C) Catch weighing requirements. The
owner and operator of a catcher/
processor vessel must:
(1) Ensure that all catch is weighed in
its round form on a NMFS-approved
scale that meets the requirements
described in § 660.15(b);
(2) Provide a NMFS-approved
platform scale, belt scale, and test

VerDate Sep<11>2014

13:35 May 04, 2016

Jkt 238001

26 CFR Part 1
[TD 9767]

Additional Limitation on Suspension of
Benefits Applicable to Certain Pension
Plans Under the Multiemployer
Pension Reform Act of 2014
Internal Revenue Service (IRS),
Treasury.
ACTION: Final regulations.
AGENCY:

The Multiemployer Pension
Reform Act of 2014 (‘‘MPRA’’), which
was enacted by Congress as part of the
Consolidated and Further Continuing
Appropriations Act of 2015, relates to
multiemployer defined benefit pension
plans that are projected to have
insufficient funds, within a specified
timeframe, to pay the full plan benefits
to which individuals will be entitled
(referred to as plans in ‘‘critical and
declining status’’). Under MPRA, the
sponsor of such a plan is permitted to
reduce the pension benefits payable to
plan participants and beneficiaries if
certain conditions and limitations are
satisfied (referred to in MPRA as a
‘‘suspension of benefits’’). One specific
limitation governs the application of a
suspension of benefits under any plan
that includes benefits directly
attributable to a participant’s service
with any employer that has withdrawn
from the plan in a complete withdrawal,
paid its full withdrawal liability, and,
pursuant to a collective bargaining
agreement, assumed liability for
providing benefits to participants and
beneficiaries equal to any benefits for
such participants and beneficiaries
reduced as a result of the financial
status of the plan. This document
contains final regulations that provide
guidance relating to this specific
limitation. These regulations affect
active, retired, and deferred vested
participants and beneficiaries under any
such multiemployer plan in critical and
declining status as well as employers
contributing to, and sponsors and
administrators of, those plans.
DATES: Effective date: These regulations
are effective on May 5, 2016.
SUMMARY:

Frm 00015

Fmt 4700

Applicability date: These regulations
apply to suspensions for which the
approval or denial is issued on or after
April 26, 2016. In the case of a
systemically important plan, the final
regulations apply with respect to any
modified suspension implemented on or
after April 26, 2016.
FOR FURTHER INFORMATION CONTACT: The
Department of the Treasury MPRA
guidance information line at (202) 622–
1559 (not a toll-free number).
SUPPLEMENTARY INFORMATION:
Background

RIN 1545–BN24

PO 00000

27011

Sfmt 4700

This document contains amendments
to the Income Tax Regulations (26 CFR
part 1) under section 432(e)(9) of the
Internal Revenue Code (Code), as
amended by section 201 of 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).1 As
amended, section 432(e)(9) permits plan
sponsors of certain multiemployer plans
to reduce the plan benefits payable to
participants and beneficiaries by plan
amendment (referred to in the statute as
a ‘‘suspension of benefits’’) if specified
conditions are satisfied. A plan sponsor
that seeks to implement a suspension of
benefits must submit an application for
approval of that suspension to the
Secretary of the Treasury. 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), is required
by the statute to approve the application
upon finding that certain specified
conditions are satisfied.
One condition, set forth in section
432(e)(9)(D)(vii), is a specific limitation
on how a suspension of benefits must be
applied under a plan that includes
benefits that are directly attributable to
a participant’s service with any
employer described in section
432(e)(9)(D)(vii)(III). An employer is
described in section 432(e)(9)(D)(vii)(III)
if the employer has, prior to the date
MPRA was enacted (December 16,
2014): (1) Withdrawn from the plan in
a complete withdrawal under section
1 Section 201 of MPRA makes parallel
amendments to section 305 of the Employee
Retirement Income Security Act of 1974, Public
Law 93–406 (88 Stat. 829 (1974)), as amended
(ERISA). The Treasury Department 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). Thus, these final Treasury
regulations issued under section 432 of the Code
apply as well for purposes of section 305 of ERISA.

E:\FR\FM\05MYR1.SGM

05MYR1

ehiers on DSK5VPTVN1PROD with RULES

27012

Federal Register / Vol. 81, No. 87 / Thursday, May 5, 2016 / Rules and Regulations

4203 of ERISA; (2) paid the full amount
of the employer’s withdrawal liability
under section 4201(b)(1) of ERISA or an
agreement with the plan; and (3)
pursuant to a collective bargaining
agreement, assumed liability for
providing benefits to participants and
beneficiaries of the plan under a
separate, single-employer plan
sponsored by the employer, in an
amount equal to any amount of benefits
for these participants and beneficiaries
reduced as a result of the financial
status of the plan. Such an employer is
referred to in this preamble as a
‘‘subclause III employer,’’ and a
collective bargaining agreement under
which the employer assumes liability
for those benefits is referred to as a
‘‘make-whole agreement.’’
If section 432(e)(9)(D)(vii) applies to a
plan then, under section
432(e)(9)(D)(vii)(I), the suspension of
benefits must first be applied to the
maximum extent permissible to benefits
attributable to a participant’s service
with an employer that withdrew from
the plan and failed to pay (or is
delinquent with respect to paying) the
full amount of its withdrawal liability
under section 4201(b)(1) of ERISA or an
agreement with the plan. Such an
employer is referred to in this preamble
as a ‘‘subclause I employer.’’ Second,
under section 432(e)(9)(D)(vii)(II),
except as provided in section
432(e)(9)(D)(vii)(III), a suspension of
benefits must be applied to all other
benefits under the plan that may be
suspended. Third, under section
432(e)(9)(D)(vii)(III), a suspension must
be applied to benefits under the plan
that are directly attributable to a
participant’s service with a subclause III
employer. An employer under the plan
is referred to in this preamble as a
‘‘subclause II employer’’ if it is neither
a subclause I employer nor a subclause
III employer.
On October 23, 2015, the Treasury
Department published a notice in the
Federal Register (80 FR 64508)
regarding an application for a proposed
suspension of benefits, which
represented that the plan is of the type
to which section 432(e)(9)(D)(vii)
applies. The notice requested public
comments on all aspects of the
application, including with respect to
the interpretation of section
432(e)(9)(D)(vii) that is reflected in the
application.
On February 11, 2016, the Treasury
Department and the IRS published
proposed regulations (REG–101701–16)
regarding the specific limitation on a
suspension of benefits under section
432(e)(9)(D)(vii) in the Federal Register
at 81 FR 7253. Comments were received

VerDate Sep<11>2014

13:35 May 04, 2016

Jkt 238001

on the proposed regulations and a
public hearing was held on March 22,
2016.
After consideration of the written
comments received and the oral
comments presented at the public
hearing, the provisions of the proposed
regulations are adopted as revised by
this Treasury decision. The Treasury
Department consulted with PBGC and
the Labor Department in developing
these regulations.2
Explanation of Provisions
These regulations amend the Income
Tax Regulations (26 CFR part 1) to
provide guidance regarding section
432(e)(9)(D)(vii). Section
432(e)(9)(D)(vii) sets forth a rule that
limits how a suspension may be applied
under a plan that includes benefits that
are directly attributable to a
participant’s service with a subclause III
employer. In determining how a
suspension should be allocated
consistent with MPRA’s framework and
purpose, the Treasury Department and
the IRS analyzed the statute and applied
well-established principles of statutory
construction to interpret section
432(e)(9)(D)(vii). In so doing, the
Treasury Department and the IRS
interpreted section 432(e)(9)(D)(vii) in
the context of section 432(e)(9) as a
whole, which requires, among other
things, that any suspension be subject to
certain limitations, including that the
suspension be equitably distributed
across the participant and beneficiary
population.
I. Application of a Suspension of
Benefits to Subclause I Benefits to the
Maximum Extent Permissible
Subclause (I) of section
432(e)(9)(D)(vii) provides that the
suspension of benefits must first be
applied ‘‘to the maximum extent
permissible’’ to benefits attributable to
service with a subclause I employer
(referred to in this preamble as
‘‘subclause I benefits’’). Accordingly, the
proposed regulations provided that, for
a plan that is subject to section
432(e)(9)(D)(vii), a suspension of
benefits must be applied to the
maximum extent permissible to
subclause I benefits before reductions
are permitted to be applied to any other
benefits. Under the proposed
regulations, only if such a suspension is
not reasonably estimated to achieve the
level that is necessary to enable the plan
2 The Treasury Department and the IRS have
published final regulations providing general
guidance regarding section 432(e)(9). See
§ 1.432(e)(9)–1 (TD 9765), published in the Federal
Register on April 28, 2016 (81 FR 25539).
.

PO 00000

Frm 00016

Fmt 4700

Sfmt 4700

to avoid insolvency may a suspension
then be applied to other benefits that are
permitted to be suspended and that are
attributable to a participant’s service
with other employers. No commenters
objected to this provision of the
proposed regulations, and these final
regulations adopt this provision as
proposed.
II. Relationship Between Subclause II
Benefits and Subclause III Benefits
In contrast to subclause (I) of section
432(e)(9)(D)(vii), subclause (II) does not
include the phrase ‘‘to the maximum
extent permissible.’’ Accordingly, the
Treasury Department and the IRS
developed the rules in the proposed
regulations based on the interpretation
that a suspension need not be applied
to the maximum extent permissible to
benefits described in subclause (II)
before any suspension is applied to
benefits described in subclause (III).
A number of commenters expressed
views regarding the rules under the
proposed regulations describing how
the suspension of benefits is permitted
to apply to benefits attributable to
service with a subclause II employer
(referred to in this preamble as
‘‘subclause II benefits’’) and benefits
directly attributable to service with a
subclause III employer (referred to in
this preamble as ‘‘subclause III
benefits’’). Many of these commenters
agreed with the analysis set forth in the
preamble to the proposed regulations
and supported an interpretation of the
statute that subclause II benefits are not
required to be reduced to the maximum
extent permissible before any subclause
III benefits can be reduced.
Two commenters advocated that the
statute be interpreted to require that
subclause II benefits be suspended to
the maximum extent permissible before
a suspension is permitted to apply to
any subclause III benefits. These
commenters maintained that this result
is required by the ordinal numbering of
the three subclauses and asserted that
Congress intended to favor any
withdrawing employer that not only
paid the full amount of its withdrawal
liability but also entered into a makewhole agreement. If such an approach
were applied under section
432(e)(9)(D)(vii), then the benefits
described in each of the first two
subclauses would be required to be
suspended to the maximum extent
permissible before any suspension
could apply to benefits described in the
successive subclause. Under that
approach, subclause III benefits would
be permitted to be suspended only if all
benefits attributable to participants’
service with all subclause I and

E:\FR\FM\05MYR1.SGM

05MYR1

ehiers on DSK5VPTVN1PROD with RULES

Federal Register / Vol. 81, No. 87 / Thursday, May 5, 2016 / Rules and Regulations
subclause II employers were suspended
to the maximum extent permissible. In
support of this position, one commenter
asserted that the Treasury Department
and the IRS misinterpreted the import of
the absence of the phrase ‘‘to the
maximum extent permissible’’ in
subclause (II). This commenter asserted
that the combined use in subclause (II)
of ‘‘second,’’ ‘‘except as provided by
subclause (III),’’ and ‘‘all other benefits’’
has the same effect with respect to
subclause II benefits as the use in
subclause (I) of ‘‘to the maximum extent
permissible’’ has with respect to
subclause I benefits. This commenter
argued that the difference in language
between subclause (I) and subclause (II)
does not prevent the two rules from
having the same effect, and cited to
Kirtsaeng v. John Wiley & Sons, Inc., 568
U.S. ___, 133 S. Ct. 1351, 1364 (2013) in
support of this argument.
After carefully considering this
argument and applicable authorities, the
Treasury Department and the IRS have
concluded that this interpretation is
incorrect; the statute does not require
subclause II benefits to be suspended to
the maximum extent permissible before
any subclause III benefits are permitted
to be suspended, and the rule set forth
in the proposed regulations is the
correct interpretation of the statute.
Applicable case law establishes that a
difference in language between one
statutory provision and the next
immediately following provision should
be given meaning. See Loughrin v.
United States, 573 U.S. __,134 S. Ct.
2384, 2390 (2014) (‘‘We have often
noted that when ‘Congress includes
particular language in one section of a
statute but omits it in another’—let
alone in the very next provision—this
Court ‘presume[s]’ that Congress
intended a difference in meaning.’’
(quoting Russello v. United States, 464
U.S. 16, 23 (1983)). To read subclause
(II) to require that subclause II benefits
be suspended ‘‘to the maximum extent
permissible’’ even though that language
does not appear in subclause (II) would
effectively rewrite the statute either by
moving the phrase the ‘‘to the maximum
extent permissible’’ from subclause (I) to
the introductory language of section
432(e)(9)(D)(vii) or by adding it to
subclause (II).3 The interpretation in the
proposed regulations is also consistent
with the language in subclause (II)
(‘‘except as provided in subclause (III)’’),
which contemplates a coordinated
application of two provisions that are to
be applied ‘‘second’’ and ‘‘third;’’ this
3 See Hall v. United States, 566 U.S. __, 132 S.
Ct. 1882, 1893 (2012) (‘‘[I]t is not for us to rewrite
the statute.’’)

VerDate Sep<11>2014

13:35 May 04, 2016

Jkt 238001

language in subclause (II) is not
consistent with an interpretation that
requires application of a suspension to
subclause II benefits that is independent
of (and entirely preceding) the
application of the suspension to
subclause III benefits.
Kirtsaeng, which the one commenter
cited to contest this interpretation in the
proposed regulations, involved two
phrases that ‘‘mean roughly the same
thing.’’ Id. at 1358–59, 1364 (‘‘The
language of [the relevant statute] read
literally favors [petitioner’s]
interpretation, namely, that ‘lawfully
made under this title’ means made ‘in
accordance with’ or ‘in compliance
with’ the Copyright Act.’’). There are no
‘‘roughly’’ similar phrases across
subclauses (I) and (II). Kirtsaeng is
therefore inapposite.4
The Treasury Department and the IRS
recognize that the language of section
432(e)(9)(D)(vii) bears some similarity to
other statutory provisions that establish
priority categories requiring claims to be
fully satisfied under each earlier
category before any claims are permitted
to be satisfied under any subsequent
category—for example, section 4044(a)
of ERISA and sections 507(a) and 726(a)
and (c) of the Bankruptcy Code, which
in each instance prescribes ordering
rules relating to the distribution of
limited assets. However, in contrast to
the language in section 432(e)(9)(D)(vii),
these other statutory provisions do not
include language in one category
instructing that the category must be
fully exhausted before reaching the next
category, while omitting that language
in other categories. Furthermore, if the
ordinal numbering of section
432(e)(9)(D)(vii) were to be interpreted
to require that each category be fully
exhausted before reaching the next
category, then the phrase ‘‘to the
maximum extent permissible’’ in
subclause (I) would not serve any
purpose and would be superfluous.5
The broad scope of benefits included
in subclause (III) further supports the
conclusion that a suspension need not
be applied to the maximum extent
permissible to subclause II benefits
before any suspension is applied to
subclause III benefits. As explained in
Section D of this preamble, subclause III
benefits include all benefits that are
4 Kirtsaeng is further inapposite because the
statutory provisions of the Copyright Act that were
compared to each other in that case (i.e., 17 U.S.C.
109 and 602) were not in immediate proximity to
each other unlike the subclauses at issue here.
5 See Marx v. General Revenue Corp., 568 U.S.
__, 133 S. Ct. 1166, 1178 (2013) (‘‘[T]he canon
against surplusage is strongest when an
interpretation would render superfluous another
part of the same statutory scheme.’’).

PO 00000

Frm 00017

Fmt 4700

Sfmt 4700

27013

directly attributable to service with a
subclause III employer, without regard
to whether those benefits are subject to
a make-whole agreement. If subclause II
benefits were required to be reduced to
the maximum extent permissible before
any subclause III benefits could be
reduced (including subclause III
benefits not subject to a make-whole
agreement), then participants with
subclause III benefits who are not
subject to the make-whole agreement
could experience significantly smaller
reductions than participants with
subclause II benefits (including benefits
attributable to service with employers
that never withdrew from the plan),
without regard to whether that
difference is consistent with the
equitable distribution requirement.
For these reasons, these final
regulations adopt the rule under the
proposed regulations that subclause II
benefits are not required to be
suspended ‘‘to the maximum extent
permissible’’ before any suspension is
permitted to be applied to subclause III
benefits.
III. Standard for Application of
Suspension to Subclause III Benefits
Relative to Subclause II Benefits
In order to give effect to the
requirement that a suspension of
benefits be applied ‘‘second’’ to
subclause II benefits and ‘‘third’’ to
subclause III benefits, the proposed
regulations provided that a suspension
would not be permitted to reduce
subclause III benefits unless subclause II
benefits were reduced to at least the
same extent as subclause III benefits
were reduced. Under the proposed
regulations, this limitation would be
satisfied if no participant’s benefits that
are directly attributable to service with
a subclause III employer were reduced
more than that participant’s benefits
would have been reduced if, holding
constant the benefit formula, work
history, and all relevant factors used to
compute benefits, those benefits were
attributable to service with any other
employer. The effect of the proposed
rule is to protect a subclause III
employer from the possibility that the
suspension would be expressly
designed to take advantage of the
employer’s commitment to make
participants and beneficiaries whole for
the reductions.
Most commenters agreed with the
analysis set forth in the preamble to the
proposed regulations and supported the
rule that a suspension would not be
permitted to reduce subclause III
benefits unless subclause II benefits are
reduced to at least the same extent.
However, one commenter maintained

E:\FR\FM\05MYR1.SGM

05MYR1

27014

Federal Register / Vol. 81, No. 87 / Thursday, May 5, 2016 / Rules and Regulations

ehiers on DSK5VPTVN1PROD with RULES

that, if the Treasury Department and the
IRS were to adopt the rule set forth in
the proposed regulations intended to
protect a subclause III employer, then
the rule should be modified to prohibit
facially neutral suspension provisions
that have a disparate impact on
subclause III benefits or that are
intentionally designed to produce such
an impact. Under such a rule, a
suspension of benefits that
disproportionally reduces subclause III
benefits in the aggregate relative to
subclause II benefits in the aggregate
would be prohibited under section
432(e)(9)(D)(vii) even if the suspension
does not by its terms treat individuals
with subclause III benefits in a less
favorable manner than similarly situated
individuals with subclause II benefits.
Nothing in the statute or preexisting
case law requires the application of a
disparate impact standard. Both
Congress and the Supreme Court have
required such a standard only in the
unique context in which ‘‘barriers
operate invidiously to discriminate on
the basis of racial or other
impermissible classification,’’ Griggs v.
Duke Power Co., 401 U.S. 424, 431
(1971); see, e.g., 42 U.S.C. 2000e–
2(k)(1)(A)(i) (prohibiting ‘‘a particular
employment practice that causes a
disparate impact on the basis of race,
color, religion, sex, or national origin’’);
see also Texas Department of Housing
and Community Affairs, et al., v.
Inclusive Communities Project, Inc., et
al., 576 U. S. ___, 135 S. Ct. 2507, 2513
(2015) (‘‘a disparate-impact claim
challenges practices that have a
‘disproportionately adverse effect on
minorities’ and are otherwise
unjustified by a legitimate rationale’’).
Those unique circumstances are not
present here.
After considering the public
comments, the Treasury Department
and the IRS have determined that the
rule set forth in the proposed
regulations appropriately protects a
subclause III employer from the
possibility that the suspension would be
expressly designed to take advantage of
the employer’s commitment to make
participants and beneficiaries whole for
the reductions in a manner that is most
consistent with all of the statutory
language.6 However, in response to
comments identifying potential
6 The preamble to the proposed regulations
requested comments on an alternative
interpretation of section 432(e)(9)(vii) that would
require that any suspension of benefits be applied
to provide for a lesser reduction in benefits that are
directly attributable to service with a subclause III
employer than to benefits that are attributable to
any other service. No commenters recommended
adopting the alternative interpretation.

VerDate Sep<11>2014

13:35 May 04, 2016

Jkt 238001

ambiguities in the proposed regulations,
the application of this rule in the final
regulations has been clarified.
Accordingly, these final regulations
provide that a suspension does not
violate the required relationship
between subclause III benefits and
subclause II benefits if no individual’s
benefits that are subclause III benefits
are reduced more than that individual’s
benefits would have been reduced if,
holding constant the benefit formula,
work history, and all other relevant
factors used to determine the
individual’s benefits, those benefits
were attributable to service with any
other employer.
IV. Treatment of Participants With
Service for a Subclause III Employer
Who Are Not Covered by a Make-Whole
Agreement
The proposed regulations provided
that the benefits described in section
432(e)(9)(D)(vii)(III) are any benefits that
are directly attributable to a
participant’s service with a subclause III
employer, without regard to whether the
employer has assumed liability for
providing benefits to the participant or
beneficiary that were reduced as a result
of the financial status of the plan. For
example, if, before the date a subclause
III employer entered into a make-whole
agreement, a participant commenced
receiving retirement benefits under a
plan that are directly attributable to
service with that employer, then the
participant’s benefits would be
described in section 432(e)(9)(D)(vii)(III)
even if those benefits were not covered
by the make-whole agreement. This
interpretation is based on the statutory
language in section 432(e)(9)(D)(vii)(III),
which defines the benefits to which that
subclause applies as those benefits that
are directly attributable to service with
an employer that has met the conditions
set forth in section
432(e)(9)(D)(vii)(III)(aa) and (bb). In
other words, the statutory provision
refers to benefits directly attributable to
service with an employer described in
subclause (III) and not only to benefits
covered by the make-whole agreement.
Some of the commenters on the
proposed regulations expressed views
regarding whether subclause III benefits
should include benefits that are not
covered by a make-whole agreement.
Two commenters supported the rule set
forth in the proposed regulations, under
which subclause III benefits include all
benefits directly attributable to service
with a subclause III employer. Two
other commenters expressed the view
that subclause III benefits include only
benefits that are covered by a makewhole agreement. The latter two

PO 00000

Frm 00018

Fmt 4700

Sfmt 4700

commenters asserted that Congress
included this provision in order to
prevent a suspension from unreasonably
shifting costs onto an employer that had
entered into a make-whole agreement,
and that this Congressional intent
suggests that only benefits subject to the
make-whole agreement were intended to
be protected. They also noted that
interpreting this provision to include
benefits that are not covered by a makewhole agreement could result in
benefits for many participants being
covered under subclause III even if an
employer entered into a make-whole
agreement covering only a few
participants, and argued that Congress
did not intend such a result.
After considering the public
comments, the Treasury Department
and the IRS remain convinced that the
rule set forth in the proposed
regulations reflects the plain language of
the statute. The statute defines
subclause III benefits as benefits
attributable to service with a subclause
III employer, not benefits covered by a
make-whole agreement. Furthermore,
the ability of an employer to take
advantage of this interpretation by
entering into a make-whole agreement
that covers only a few participants is
limited by the fact that subclause (III)
applies only if all the conditions of
subclause (III) (including the condition
that the employer enter into a makewhole agreement) were satisfied prior to
December 16, 2014 (the date of
enactment of MPRA). Because this date
has passed, there is no cause for concern
that an employer could plan to become
a subclause (III) employer. Accordingly,
these regulations adopt the rule set forth
in the proposed regulations under
which subclause III benefits include all
benefits attributable to a participant’s
service with a subclause III employer
without regard to whether the
participant or beneficiary is covered by
a make-whole agreement.
Effective/Applicability Dates
These regulations apply to
suspensions for which the approval or
denial is issued on or after April 26,
2016. In the case of a systemically
important plan, these regulations apply
with respect to any modified suspension
implemented on or after April 26, 2016.
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
regulatory impact assessment is not
required. It also has been determined
that section 553(b) of the Administrative

E:\FR\FM\05MYR1.SGM

05MYR1

Federal Register / Vol. 81, No. 87 / Thursday, May 5, 2016 / Rules and Regulations
Procedure Act (5 U.S.C. chapter 5) does
not apply to these regulations.
The Regulatory Flexibility Act (RFA)
(5 U.S.C. chapter 6) requires an agency
to consider whether the rules it
proposes will have a significant
economic impact on a substantial
number of small entities. In this case,
the IRS and the Treasury Department
believe that the regulations likely would
not have a ‘‘significant economic impact
on a substantial number of small
entities.’’ 5 U.S.C. 605. This certification
is based on the fact that the number of
small entities affected by this rule is
unlikely to be substantial because it is
unlikely that a substantial number of
small multiemployer plans in critical
and declining status are subject to the
limitation contained in section
432(e)(9)(D)(vii). Pursuant to section
7805(f) of the Code, the notice of
proposed rulemaking preceding these
regulations was submitted to the Chief
Counsel for Advocacy of the Small
Business Administration for comment
on its impact on small business.
Contact Information
For general questions regarding these
regulations, please contact the
Department of the Treasury MPRA
guidance information line at (202) 622–
1559 (not a toll-free number). For
information regarding a specific
application for a suspension of benefits,
please contact the Treasury Department
at (202) 622–1534 (not a toll-free
number).
List of Subjects in 26 CFR Part 1
Income taxes, Reporting and
recordkeeping requirements.
Amendments to the Regulations
Accordingly, 26 CFR part 1 is
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)–1 is
amended by revising paragraph (d)(8) to
read as follows:

■

ehiers on DSK5VPTVN1PROD with RULES

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

*

*
*
*
*
(d) * * *
(8) Additional rules for plans
described in section 432(e)(9)(D)(vii)—
(i) In general. In the case of a plan that
includes the benefits described in
paragraph (d)(8)(i)(C) of this section, any

VerDate Sep<11>2014

13:35 May 04, 2016

Jkt 238001

suspension of benefits under this
section shall—
(A) First, be applied to the maximum
extent permissible to benefits
attributable to a participant’s service for
an employer that withdrew from the
plan and failed to pay (or is delinquent
with respect to paying) the full amount
of its withdrawal liability under section
4201(b)(1) of ERISA or an agreement
with the plan;
(B) Second, except as provided by
paragraph (d)(8)(i)(C) of this section, be
applied to all other benefits that may be
suspended under this section; and
(C) Third, be applied to benefits under
a plan that are directly attributable to a
participant’s service with any employer
that has, prior to December 16, 2014—
(1) Withdrawn from the plan in a
complete withdrawal under section
4203 of ERISA and paid the full amount
of the employer’s withdrawal liability
under section 4201(b)(1) of ERISA or an
agreement with the plan; and
(2) Pursuant to a collective bargaining
agreement, assumed liability for
providing benefits to participants and
beneficiaries of the plan under a
separate, single-employer plan
sponsored by the employer, in an
amount equal to any amount of benefits
for such participants and beneficiaries
reduced as a result of the financial
status of the plan.
(ii) Application of suspensions to
benefits that are directly attributable to
a participant’s service with certain
employers—(A) Greater reduction in
certain benefits not permitted. A
suspension of benefits under this
section must not be applied to provide
for a greater reduction in benefits
described in paragraph (d)(8)(i)(C) of
this section than the reduction that is
applied to benefits described in
paragraph (d)(8)(i)(B) of this section.
The requirement in the preceding
sentence is satisfied if no individual’s
benefits that are directly attributable to
service with an employer described in
paragraph (d)(8)(i)(C) of this section are
reduced more than that individual’s
benefits would have been reduced if,
holding the benefit formula, work
history, and all other relevant factors
used to compute benefits constant, those
benefits were attributable to service
with an employer that is not described
in paragraph (d)(8)(i)(C) of this section.
(B) Application of limitation to
benefits of participants with respect to
which the employer has not assumed
liability. Benefits described in paragraph
(d)(8)(i)(C) of this section include all
benefits of a participant or beneficiary
that are directly attributable to service
with an employer described in
paragraph (d)(8)(i)(C) of this section

PO 00000

Frm 00019

Fmt 4700

Sfmt 4700

27015

without regard to whether the employer
has assumed liability for providing
benefits to that participant or
beneficiary that are reduced as a result
of the financial status of the plan as
described in paragraph (d)(8)(i)(C)(2) of
this section. Thus, the rule of paragraph
(d)(8)(ii)(A) of this section limits the
amount by which a suspension of
benefits is permitted to reduce benefits
under a plan that are directly
attributable to a participant’s service
with such an employer, even if the
employer has not, pursuant to a
collective bargaining agreement that
satisfies the requirements of paragraph
(d)(8)(i)(C)(2) of this section, assumed
liability with respect to that
participant’s benefits.
*
*
*
*
*
John Dalrymple,
Deputy Commissioner for Services and
Enforcement.
Approved: April 29, 2016.
Mark J. Mazur,
Assistant Secretary of the Treasury (Tax
Policy).
[FR Doc. 2016–10560 Filed 5–3–16; 4:15 pm]
BILLING CODE 4830–01–P

DEPARTMENT OF HOMELAND
SECURITY
Coast Guard
33 CFR Part 110
[Docket Number USCG–2015–0825]
RIN 1625–AA01

Anchorage Regulations; Delaware
River, Philadelphia, PA
Coast Guard, DHS.
Final rule.

AGENCY:
ACTION:

The Coast Guard is amending
the geographic coordinates and
modifying the regulated use of
anchorage ‘‘10’’ in the Delaware River in
the vicinity of the Navy Yard in
Philadelphia, Pennsylvania. The change
alters the size and use of the anchorage,
reducing the anchorage in size and
allowing the anchorage to be used as a
general anchorage ground in the
Delaware River.
DATES: This rule is effective June 6,
2016.
ADDRESSES: To view documents
mentioned in this preamble as being
available in the docket, go to http://
www.regulations.gov, type USCG–2015–
0825 in the ‘‘SEARCH’’ box and click
‘‘SEARCH.’’ Click on Open Docket
Folder on the line associated with this
rule.
SUMMARY:

E:\FR\FM\05MYR1.SGM

05MYR1