Changes to Multiemployer Pension Plans
On December 16, 2014, the Kline-Miller Multiemployer Pension Reform Act of 2014 (MPRA) was enacted into law. In MPRA, Congress established a new process for multiemployer pension plans to propose a temporary or permanent reduction of pension benefits if a plan is projected to run out of money before paying all promised benefits.
MPRA requires the Treasury Department, in consultation with the Pension Benefit Guaranty Corporation (PBGC) and the Department of Labor, to review a multiemployer pension plan’s application to reduce benefits and determine whether it meets the requirements set by Congress.
It is important to note that most multiemployer pension plans are sufficiently funded and will not be eligible to apply for a reduction of pension benefits under MPRA. To find out if MPRA could impact you, contact your pension plan.
The resources on this page provide additional information about MPRA and the Treasury Department’s process for reviewing applications to reduce benefits paid by multiemployer pension plans that are in critical and declining status.
On May 6, 2016, Secretary Lew sent a letter to Congress regarding the Kline-Miller Multiemployer Pension Reform Act of 2014. You can view that letter here.
International Association of Machinists Motor City Pension Plan
On November 6, 2017, the Board of Trustees of the International Association of Machinists Motor City Pension Plan (Plan) was notified that its application to reduce pension benefits under the Multiemployer Pension Reform Act of 2014 (MPRA) meets the requirements for approval. As a result, the proposed benefit reductions will now be subject to a vote of participants and beneficiaries of the Plan. Ballots were mailed to participants and beneficiaries on November 16, 2017. The voting period opens November 16, 2017 at 12:01 a.m. ET and closes December 7, 2017 at 11:59 p.m. ET.
Unless a majority of participants and beneficiaries vote to reject the proposed benefit reduction, the proposed benefit reduction will go into effect on January 1, 2018.
To see what the mailing envelope looks like, click here. To see a sample of the ballot materials and the voting instructions, click here and here.
The Treasury Department will be hosting 2 conference calls with participants and beneficiaries to explain the voting procedures and take questions on those procedures.
The conference calls will be held on the following dates and times:
Tuesday, November 28, 2017 at 1 p.m. ET
Wednesday, November 29, 2017 at 8 p.m. ET
The dial-in number is 800-369-2065. When prompted, the passcode is: 8572802.
New York State Teamsters Conference Pension and Retirement Fund
On May 15, 2017, the Board of Trustees of the New York State Teamsters Conference Pension and Retirement Fund (Fund) submitted an application to reduce pension benefits under the Multiemployer Pension Reform Act of 2014 (MPRA). That application was approved on August 3, 2017. Participants and beneficiaries of the Fund were then given an opportunity to vote on whether to approve or reject the proposed benefit reduction. MPRA provides that unless a majority of participants and beneficiaries vote to reject the benefit reduction, the reduction must go into effect. The voting period began on August 16, 2017, and ended on September 6, 2017.
Results of Vote
The New York State Teamsters Conference Pension and Retirement Fund identified 35,173 participants and beneficiaries who were eligible to vote, and ballots were delivered to 34,636 of these individuals. (The remaining 537 individuals could not be located using reasonable means.)
Of the 34,636 participants and beneficiaries who received a ballot, 28.26 percent (9,788) voted to reject the reduction. Because a majority of eligible voters who received a ballot did not vote to reject the benefit reduction, the benefit reduction will take effect on October 1, 2017.
Vote Summary:
· Ballots against the reduction: 9,788
· Ballots in favor of the reduction: 4,081
· Ballots delivered but not cast: 20,767
The Fund was notified on September 13, 2017, that the final authorization to reduce benefits had been issued. NYST Final Approval Letter If you have questions specifically about your benefits, please see the ballot materials that were previously sent to you. You may also contact the Fund at 1.877.698.3863.
On March 15, 2017, the Board of Trustees of the United Furniture Workers Pension Fund A (Fund) submitted an application to reduce pension benefits under the Multiemployer Pension Reform Act of 2014 (MPRA). That application was approved on July 20, 2017. Participants and beneficiaries of the Fund were then given an opportunity to vote on whether to approve or reject the proposed benefit reduction. MPRA provides that unless a majority of participants and beneficiaries vote to reject the benefit reduction, the reduction must go into effect. The voting period began on August 3, 2017, and ended on August 24, 2017.
Results of Vote
The United Furniture Workers Pension Fund A identified 9,595 participants and beneficiaries who were eligible to vote, and ballots were delivered to 9,273 of these individuals. (The remaining 322 individuals could not be located using reasonable means.) Of the 9,273 participants and beneficiaries who received a ballot, 21 percent (1,928) voted to reject the suspension. Because a majority of eligible voters who received a ballot did not vote to reject the benefit reduction, the benefit reduction will take effect on September 1, 2017.
Vote Summary:
Ballots against the reduction: 1,928
Ballots in favor of the reduction: 1,041
Ballots delivered but not cast: 6,304
A final authorization to reduce benefits was issued on August 31 here. If you have questions specifically about your benefits, please see the ballot materials that were previously sent to you. You may also contact the Fund at 1.615.889.8860 or 1.800.800.8860.
Final Regulations Released
On April 26, 2016, the Treasury Department released final regulations implementing the Kline-Miller Multiemployer Pension Reform Act (Kline-Miller). These regulations finalize the proposed and temporary regulations that were issued in June 2015 and September 2015 and address stakeholder comments.
The final regulations do not change the basic requirements for applications to reduce pension benefits. They provide further clarifications based on information received during the public comment period. The final regulations can be viewed online here.
Notice
If you are a participant in a multiemployer pension plan that has submitted a benefit suspension application, the plan's Board of Trustees is required to provide notice of the application to reduce benefits to you. That notice is also required to include an individualized estimate of the effect of the proposed benefit reductions on you. If you have questions about how proposed benefit reductions will specifically impact you, please contact the plan administrator. Contact information for the plan administrator is available in the summary plan description for your pension plan.
Other Details
Under Kline-Miller, Treasury is responsible for determining whether the application for a reduction of benefits meets the requirements set by Congress. Benefits cannot be reduced until after the following actions take place:
- The plan sponsor must notify participants and beneficiaries of the application for a benefit reduction and provide an individualized estimate of reduced benefits
- Participants and beneficiaries must have an opportunity to comment on the application
- Treasury must review and, if the application satisfies all of the Kline-Miller requirements, must approve the application
- Participants and beneficiaries must have an opportunity to vote on the benefit reduction
Treasury has up to 225 days to approve or deny an application, and, if an application is approved, 30 days to administer a vote on the proposed benefit reductions.