The Multiemployer Pension Reform Act of 2014 (MPRA) includes many provisions that affect the operation of multiemployer pension plans. The most significant of these provisions applies to deeply troubled plans that are projected to exhaust their assets in the coming years. Subject to a variety of constraints, including government approval, MPRA provides multiemployer plans that are headed towards insolvency with the option of suspending a portion of participants’ accrued benefits. This authority is available only if the plan sponsor and actuary conclude that the suspensions are necessary for the plan to remain solvent and suspending benefits will preserve long-term benefits above the Pension Benefit Guaranty Corporation (PBGC) guarantee level.

This article discusses some of the statutory requirements for benefit suspension authority, along with the factors that plan sponsors may consider in deciding whether and how to exercise this authority.


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