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, Treasury notified the Board of Trustees of the Iron Workers Local 17 Pension Fund that their application to reduce pension benefits under the Multiemployer Pension Reform Act of 2014 (MPRA) was approved. As is required by MPRA, the benefit reductions were put to a vote of participants and beneficiaries of the Pension Fund to decide whether to reject or approve the benefit reductions. The voting period closed on January 20, 2017 at 5 p.m. EST.
Under MPRA, the reduction of benefits must take effect unless a majority of all eligible Plan participants and beneficiaries vote to reject the reduction. Of the 1,938 total eligible voters, 616 voted in favor of the reduction and 320 voted to reject the reduction—an approval ratio of approximately 2 to 1. As a result, the Pension Fund has been issued final authorization to reduce benefits, effective February 1, 2017. The final authorization letter and certification of the vote can be viewed here.
If you have questions about how your benefits may be affected by the benefit reductions, please call the Pension Fund at 800-788-8406.
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.
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.
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.