Clarify that a suspension can take into account individual-level contingencies (such as retirement, death, or disability) for individuals who have not commenced benefits before the effective date of the suspension.

Provide a revised definition of effective date of suspension that applies to an individual who is not receiving benefits on the date the suspension is implemented and for whom the suspension reduces benefits that are not accrued benefits. For an individual affected in this way, the effective date of suspension is the first date the individual's entitlement to benefits is reduced as a result of the suspension, regardless of whether the individual is eligible to commence benefits at that date.

Must be a plan participant in pay status.

Is selected by the plan sponsor to advocate for the interests of the retired and deferred vested participants and beneficiaries of the plan throughout the suspension approval process.

The actuarial certification requirement in Code Section 432(e)(9)(C)(i) (26 U.S.C. § 432(e)(9)(C)(i)).

The plan sponsor determinations requirements in Code Section 432(e)(9)(C)(ii) (26 U.S.C. § 432(e)(9)(C)(ii)), which include initial and annual determinations that the plan is projected to become insolvent even though it has taken all reasonable measures to avoid insolvency.

A guarantee-based limitation. The monthly benefit payable to a participant, beneficiary, or alternate payee may not be less than 110% of the monthly benefit that would be guaranteed by the Pension Benefit Guaranty Corporation (PBGC) under ERISA Section 4022A (29 U.S.C. § 1322a) if the plan were to become insolvent as of the effective date of the suspension. The final regulations include examples of how the PBGC guarantee is calculated.

A disability-based limitation. Benefits based on disability, which include the entire amount paid by the plan to a participant pursuant to the participant becoming disabled, may not be suspended.

An age-based limitation, which prohibits suspensions for a participant or beneficiary who is 80 years old or older and limits the suspension that may apply to a participant or beneficiary who has reached age 75. The final regulations clarify that the relevant date for determining the age of a participant, beneficiary, or alternate payee is the end of the month that includes the effective date of the suspension, rather than the effective date of the suspension.

Any suspension of benefits in the aggregate (considered in combination with a partition of the plan, if applicable) must be reasonably estimated to enable the plan to avoid insolvency.

The suspension must not materially exceed the level necessary to enable the plan to avoid insolvency. Under the 2015 regulations, a proposed suspension of benefits would satisfy this requirement only if a smaller alternative suspension of benefits, under which the dollar amount of the suspension for each participant and beneficiary is reduced by 5%, would not enable the plan to avoid insolvency. The final regulations modify the alternative suspension amount by allowing the smaller alternative suspension to be the greater of:

The actuarial basis for the projections used in meeting the suspension requirements must meet the requirements included in the final regulations, which are significantly the same as the 2015 regulations.

Any suspension of benefits must be equitably distributed across the participant and beneficiary population. This requirement is substantially the same under the final regulations and the 2015 regulations, except for new rules that clarify:

A resumption of suspended benefits.

An increase in:

The limitations on benefit improvements for participants and beneficiaries not in pay status by the first day of the plan year of the improvement. These limitations:

The limitations on benefit improvements for participants and beneficiaries that are in pay status. The plan sponsor may increase the liabilities of the plan for benefit improvements for this group, if the plan sponsor equitably distributes the improvement among those in pay status.

Plan participants, beneficiaries, and alternate payees, except those who cannot be contacted by reasonable efforts.

Employers that have an obligation to contribute under the plan.

Any employee organization that represents the participants.

A completed application will be deemed approved unless the Treasury Department notifies the applicant of the deficiency within 225 days after it receives the application.

Plan sponsors must determine that they took all reasonable measures to avoid insolvency. The Treasury Department, in consultation with the with PBGC and DOL, will review the plan sponsor's consideration of the factors in Code Section 432(e)(9)(C)(ii) (26 U.S.C. § 432(e)(9)(C)(ii)) and each other factor it took into account when making that determination (the Treasury Department will accept this determination unless it is determined to be clearly erroneous).

The plan sponsor must certify in the application that it will comply with the annual determination and benefit improvement requirements in the final regulations.

The application to suspend benefits must be submitted electronically in a searchable format.

If a plan sponsor is not submitting an application for suspension in combination with an application to the PBGC for a plan partition, the suspension application will not be accepted unless the proposed effective date of the suspension is at least nine months after the date on which the application is submitted. This requirement:

When a suspension of plan benefits is made in conjunction with a plan partition under ERISA Section 4233 (29 U.S.C. § 1413), the suspension of benefits may not take effect before the effective date of the partition. The final regulations clarify the 2015 regulations and explain that a conditional approval of a partition application by the PBGC that is conditioned only on the Treasury Department's issuing a final authorization to suspend is treated as a partition order.

The application to suspend will be published on the website of the Treasury Department.

The Treasury Department will provide notice of denial or approval of the application to suspend. If the application is approved and the plan is expected to be systemically important, the notice will notify the plan sponsor of that expectation and that the plan sponsor will be required to provide certain information upon request.

The plan is eligible for the suspension.

The plan actuary and plan sponsor have satisfied the requirements of Code Sections 432(e)(9)(C), (E), and (F) (26 U.S.C. §§ 432(e)(9)(C), (E), and (F)).

The design of the suspension satisfies the criteria of Code Section 432(e)(9)(D) (26 U.S.C. § 432(e)(9)(D)).

The voting ballot. The final regulations explain the required contents of the ballot. Model language for the ballot may be provided in a future revenue procedure, notice, or other IRS guidance.

Missing voters. The final regulations provide that, for determining whether a majority of all eligible voters have voted to reject the suspension under Code Section 432(e)(9)(H)(ii) (26 U.S.C. § 432(e)(9)(H)(ii)), any eligible voters to whom ballots have not been provided (because the individuals could not be located) are treated as voting to reject the suspension in the same percentage as those to whom ballots have been provided.

Procedures following the vote, under which:

Systemically important plans. The final regulations provide rules for systemically important plans that are generally the same as those in the 2015 regulations. Under the final regulations, if a majority of all eligible voters votes to reject the suspension, the Treasury Department will consult with the PBGC and DOL to determine if the plan is systemically important. The Treasury Department must make this determination within 14 days after the vote results are certified. In a change from the 2015 regulations, the final regulations give the Participant and Plan Sponsor Advocate up to 44 days (rather than 30 days) after the Treasury Department's determination that the plan is systemically important to make recommendations regarding the suspension.

In appropriate circumstances, the Treasury Department may, in consultation with the PBGC and DOL, allow voters to cast votes by mail rather than the automated voting system. The 2015 regulations did not allow votes to be cast by mail.

A systemically important plan is a plan for which the present value of its financial assistance payments will exceed $1.0 billion, indexed for inflation, if the suspension is not implemented.

Eligible voters include terminated vested participants and retirees (but not alternate payees).

The list of eligible voters to whom the ballot must be sent is described as the voting roster.

To suspensions for which the approval or denial is issued on or after April 26, 2016.

In the case of a systemically important plan, to modified suspensions implemented on or after April 26, 2016.

A description of the proposed benefit suspension, including:

A penalty of perjury statement signed by an authorized trustee.

A signed statement acknowledging that the application will be publicly disclosed.

Identification and background information on the plan.

Certain other required information and documentation.

A signature by an authorized trustee who is a current member of the board or an authorized representative.

The plan is eligible for suspension, providing supporting information including the:

The proposed suspension satisfies the statutory requirements, providing supporting information including documentation:

All information required for an original application (for information that has not changed, a cross-reference to the prior application is sufficient).

A statement that the application is being submitted for resubmission review and the date on which the Treasury Department gave approval to submit an application for resubmission review.