Treasury extends Central States application comment period again

The Treasury Department reopened for a second time the comment period for the benefit reduction application by the Teamsters Central States, Southeast & Southwest Areas Pension Fund, Rosemont, Illinois.

Originally scheduled to end Dec. 7, the deadline is now Feb. 29. Central States submitted a rescue plan application Sept. 25 to the Treasury Department, which has up to 225 days to review it.

The Kline-Miller Multiemployer Pension Reform Act of 2014 requires the Treasury Department to approve an application if a pension fund's potential claims would cost the Pension Benefit Guaranty Corp. $1 billion or more. The pension fund had assets of $17.8 billion as of Dec. 31, and is projected to become insolvent in 2026.

Thomas Nyhan, executive director and general counsel of pension fund, said in an e-mailed statement that plan officials — who have done extensive outreach to participants since filing the proposed rescue plan — support the extended comment period. “We have welcomed questions and feedback, whether positive or not,” Mr. Nyhan said.

To date, 2,432 comments have been submitted, with most of them opposing the application. Randy DeFrehn, executive director of the National Coordinating Committee for Multiemployer Plans, which supports the application as a way to avoid deeper cuts in the long run, said: “For the sake of all of the participants and beneficiaries involved, we hope that Treasury will finalize its review in a timely manner so the remaining assets aren't further depleted and can be deployed in the most equitable manner possible according to the rescue plan. That way, participants and beneficiaries can receive the maximum benefits possible under existing law, while those who believe Congress will be willing to provide this plan with direct taxpayer assistance can pursue further legislative changes to that end,” Mr. DeFrehn said in an e-mail.

Kenneth Feinberg, special master for the Treasury Department's implementation of the Multiemployer Pension Reform Act, which created the application process, is hosting a series of public sessions for individuals who would be impacted. The next sessions are Feb. 8 in Detroit and Feb. 9 in Minneapolis.

On Monday, Sen. Charles Grassley, R-Iowa, asked the Government Accountability Office to investigate the Department of Labor's oversight of the plan, including selection of fund managers and changes in investment strategies. “It appears that the department hasn't done enough to prevent a major failure of the fund,” Mr. Grassley wrote on behalf of participants in his state and others.

Hazel Bradford writes for Pensions & Investments, a sister publication of Business Insurance.