The same day that it rejected Central States Pension Fund’s benefit suspension application, the US Department of the Treasury explained to Congress its reasons for doing so. In a May 10 letter from Treasury Secretary Jacob J. Lew to congressional leaders with jurisdiction over the Multiemployer Pension Reform Act of 2014 (MPRA), the Treasury Department advised that Central States Pension Fund’s application failed to meet several of the MPRA’s technical requirements.
Summarizing the specific items outlined in rejection notice itself, Secretary Lew’s letter explains the application failed to demonstrate that the proposed benefit reductions would avoid plan insolvency and that the proposed suspensions were equitably distributed among certain participant groups. Additionally, the notices provided to plan participants were not understandable to the average person. Pointing out some of the specific criticism about the MPRA that the Treasury Department heard during the application period, the letter nevertheless advises Congress that the larger funding issues facing Central States Pension Fund and other multiemployer plans remain unsolved, especially as the Pension Benefit Guaranty Corporation simultaneously heads toward insolvency. Secretary Lew’s letter explains that the Treasury Department’s rejection of the application may provide participants with some short-term relief but points out that even larger cuts may be required in the future to meet the MPRA’s requirements.