Federal regulators charged with implementing the Multiemployer Pension Reform Act of 2014 heard from concerned retirees and pension experts Thursday during a hearing convened by the IRS.
“This is a dangerous precedent for all types of pensions,” Karen Ferguson, director of the Pension Rights Center, told the panel, which included officials with the Labor Department and the Pension Benefit Guaranty Corp., which also will have a role in approving any applications to cut benefits.
Kenneth Feinberg, the special master appointed to oversee implementation of the new law, told hearing attendees that “we can’t change the law. We are obligated to implement it.” But “we want to try to manage the impact of the law,” he said.
On June 17, the Treasury Department released proposed and temporary regulations for implementing the MPRA, which among other things, allows severely distressed pension funds to reduce benefits and allows the PBGC to partition some plans to save parts of them.
The hearing was part of an effort to gather input from people likely to be affected by the law that created a new plan status, “critical and declining,” for plans likely to become insolvent without government intervention.
The Treasury Department and IRS are in charge of developing rules governing any benefit cuts, in consultation with the PBGC and the Labor Department.
Randy DeFrehn, executive director of the National Coordinating Committee for Multiemployer Plans, which spearheaded a business and labor group developing many of the law’s principles, said that trustees of distressed plans will call for benefit cuts only if they determine that retirees “would end up with more” in benefits than if the plan were taken over by the PBGC.