Changes to Multiemployer Pension Plans
On December 16, 2014, the Kline-Miller Multiemployer Pension Reform Act of 2014 (Kline-Miller) was enacted into law. In Kline-Miller, 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.
Kline-Miller 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 Kline-Miller. To find out if Kline-Miller could impact you, contact your pension plan.
The resources on this page provide additional information about Kline-Miller 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.
Iron Workers Local 17 Application to Reduce Benefits
On December 16, 2016, the Board of Trustees of the Iron Workers Local 17 Pension Fund was notified that their application to reduce pension benefits under the Kline-Miller Multiemployer Pension Reform Act of 2014 (Kline-Miller) was approved by Treasury. As a result, the proposed benefit reductions will now be subject to a vote of participants and beneficiaries of the Pension Fund, whose vote will decide whether the proposed reductions will either go into effect or will be rejected.
Ballot materials are being mailed to participants and beneficiaries who are eligible to vote on December 30, 2016. If you want to see what the mailing envelope looks like, click here. If you want to see a sample of the ballot overview and the ballot explanation materials, click hereand here.
The voting period opens December 30, 2016 at 5 p.m. EST and closes January 20, 2017 at 5 p.m. EST. Answers to frequently asked questions about the voting rules are available by clicking here. Treasury will be hosting a conference call on Friday, January 6, at noon EST to explain the voting procedures and take questions on those procedures. The dial in number for that call is 888-989-4387; the passcode for this call is 6432.
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.