Procedures for allowing multiemployer plan participants to vote on benefit reductions in distressed plans were issued by the IRS on Wednesday.
Under the latest IRS guidance on voting, plan sponsors cannot distribute the ballots, which must instead be handled by the Treasury Department or a third party they select. Sponsors must give participants individualized benefit reduction estimates within seven days of Treasury’s approval of a suspension application.
Pension Rights Center spokeswoman Nancy Hwa said her group is pleased that voters’ comments will be summarized by the Labor Department instead of plan sponsors, but it is concerned that ballots can be cast only electronically or by telephone.
Participants were given the right to vote on such proposals as part of the Multiemployer Pension Reform Act of 2014, which gives Treasury officials the authority to review applications from plans seeking to reduce benefits after exhausting all other measures. Treasury officials will consult with the Pension Benefit Guaranty Corp. and Department of Labor before granting a request, and participants must vote on proposed cuts, known as suspensions.
In June, Treasury released proposed and temporary regulations for implementing the Multiemployer Pension Reform Act of 2014.
The voting regulations, which are temporary for plan calculations made between June 17, 2015, and June 15, 2018, were published in the Federal Register on Wednesday, which calls for a 60-day comment period.