By Pension and Benefits Editorial Staff
The Department of the Treasury has released a letter, dated June 20, 2019, to the Board of Trustees of the Western Pennsylvania Teamsters & Employers Pension Fund that provides final authorization to reduce benefits under the plan pursuant to the Multiemployer Pension Reform Act of 2014 (MPRA).
On May 7, 2019, the Treasury Department notified the Western Pennsylvania Teamsters & Employers Pension Fund that its application for benefit reductions satisfied the requirements Code Sec. 432(e)(9)(C), (D), (E), and (F). A vote of eligible participants and beneficiaries to approve or reject the proposed benefit reduction was held from May 23, 2019 through June 13, 2019. Of the eligible voters identified by the Fund who received a ballot, 7,133 voted to reject the benefit reduction, 2,265 voted to approve the benefit reduction, and 11,801 did not return a ballot. The Treasury Department stated that, because a majority of eligible voters did not vote to reject the benefit reduction, the benefit reduction may go into effect.
Thus, the Treasury Department, in consultation with the Department of Labor and the Pension Benefit Guaranty Corporation, has issued a final authorization to reduce benefits as described in the application, which is effective August 1, 2019. However, this authorization is subject to certain conditions.
Under MPRA, the Fund's ability to reduce benefits is conditioned on the Fund's compliance with Code Sec. 432(e)(9)(C) and (E). Under Code Sec. 432(e)(9)(C), the plan sponsor must make an annual determination, in a written record to be maintained throughout the benefit suspension period, that the plan is still projected to become insolvent unless the benefits are suspended, despite all reasonable measures to avoid insolvency. If this annual determination requirement is not satisfied for a plan year (including maintaining the written record), then the reduction of benefits will expire as of the first day of the following plan year. Code Sec. 432(e)(9)(E) provides rules that apply to any benefit improvements that are made to the Fund during the period that the benefit reduction is in effect.
IRS seeks comments on EPCRS. The IRS is seeking comments on the revision of a currently approved collection of information concerning the Employee Plans Compliance Resolution System (EPCRS) in Rev. Proc. 2018-52 and Rev. Proc. 2016-51, including Forms 8950, 8951, 14568, and 14568-A through I. The information requested in the revenue procedures is required to enable the IRS to make determinations on the issuance of various types of closing agreements and compliance statements in order for employee plans to maintain their tax-qualified status. Rev. Proc. 2018-52, which modified and superseded Rev. Proc. 2016-51, updated procedures to require that plan sponsors file Voluntary Correction Program submissions (including the payment of applicable user fees) using the www.pay.govwebsite.
Written comments, which should be received on or before July 30, 2019 should be directed to: Laurie Brimmer, Internal Revenue Service, Room 6526, 1111 Constitution Avenue NW., Washington, DC 20224.
SOURCE: 84 FR 25336.
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