The Internal Revenue Service issued a revenue procedure and regulations explaining how a multiemployer defined benefit pension plan that is in critical and declining status can apply for approval of a proposed suspension of benefits.

Revenue Procedure 2015-34 provides that the Treasury Department will accept applications beginning June 19, 2015. The revenue procedure was issued in conjunction with temporary and proposed regulations providing guidance on benefit suspensions. Section 432(e)(9) of the Tax Code was amended by the Multiemployer Pension Reform Act of 2014 to permit the sponsor of a multiemployer defined benefit plan in critical and declining status to suspend benefits in certain situations.

In particular, MPRA amended Section 432(e)(9) and Section 305(e)(9) of the Employee Retirement Income Security Act, or ERISA, to permit the sponsor of a multiemployer defined benefit plan in critical and declining status to submit to the Treasury a proposal to suspend benefits in certain situations. The application must be signed and dated by an authorized trustee who is a current member of the board of application and needs to include a description of the proposed benefit suspension. The description should include the effective date of the proposed suspension, the categories or groups of individuals who would be affected and how those categories or groups are defined.

If the proposed suspension would have a different effect on different categories or groups, the description must describe the differences, including the formula used to calculate the amount of the proposed benefit suspension for individuals in each category or group.

The following statement has to be signed by an authorized trustee on behalf of the board of trustees that the application is submitted under penalties of perjury: “Under penalties of perjury, I declare that I have examined this request, including accompanying documents, and, to the best of my knowledge and belief, the request contains all the relevant facts relating to the request, and such facts are true, correct, and complete.” There must also be a statement signed by an authorized trustee on behalf of the board of trustees acknowledging that the application for approval of the proposed suspension of benefits, and the application’s supporting material, will be publicly disclosed through publication on the Treasury Department website. The application must be submitted to www.treasury.gov/mpra.

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