Treasury Approves Second MPRA Application
On July 20, the Nashville-based United Furniture Workers Pension Fund A (the Fund) became the second multiemployer pension plan to receive the US Department of the Treasury’s approval to suspend benefits under the Multiemployer Pension Reform Act of 2014 (MPRA). This is the first application approved under the Trump administration.
The Fund, which withdrew and resubmitted its application on March 15, 2017, proposed reducing all 9,900 participants and beneficiaries’ benefits to the maximum extent allowed by MPRA (i.e., to 110% of the Pension Benefit Guaranty Corporation (PBGC) monthly guarantee). Simultaneously, the PBGC conditionally approved the Fund’s request to partition all of the guaranteed benefit liabilities of its terminated vested participants and 56% of its retirees, beneficiaries, and disabled participants to a separate plan paid for by the PBGC.
Participants now must vote on the benefit suspensions. Under MPRA, the proposed benefit reductions and partition become effective unless a majority of all participants and beneficiaries eligible to vote cast negative ballots. If the participants approve the suspensions and the Treasury Department issues its final authorization, the suspensions and partition will be effective on September 1, 2017.
The only other multiemployer pension plan to receive the Treasury Department’s approval on an MPRA application was the Iron Workers Local 17 Pension Plan on December 16, 2016 (with the final authorization to suspend issued on January 27, 2017).