The Internal Revenue Service posted temporary voting regulationsfor multiemployer pension plans in “critical and declining” status,driving the reality of pension claw backs home for union employeesin the worst-funded plans.

Last year, to the surprise of most industry watchers, Congresspassed the Multiemployer Pension Reform Act,which extended provisions of the Pension Protection Act of 2006,and created a new funding status—critical and declining—toaccount for plans expected to be insolvent in 15years, or plans expected to be insolvent in 20 yearsthat are less than 80 percent funded.

The law, pushed through as part of last year’s omnibus spendingbill at the last minute of the Congressional session, gives plansin that status the right to reduce promised benefits to retirees, apreviously prohibited measure.

But they need the Treasury Department’s approval to do so.

If Treasury approves the benefit reductions, trustees of a planmust put the proposed reductions to a vote before affected unionmembers. The vote must take place within 30 days of Treasuryapproving the reductions.

If a majority of voters reject the proposed reductions, trusteescan’t enact them. But the law does give Treasury the power tooverride the vote under certain conditions.

The new voting guidelines detail the process for that voting,which were left out in earlier guidance issued lastJune.

The temporary voting regulations, which stakeholders now have 60days to comment on, say that Treasury can designate a third partyservice provider to administer and tally the vote.

Plan sponsors will not be allowed to distribute ballots underthe temporary rules. Voters will receive the ballots, which willhave a voter designation identifying code issued by Treasury, fromTreasury or the assigned service provider.

Sponsors will be required to furnish a comprehensive list ofaffected employees and their mailing addresses, as well as anyavailable information on participants sponsors have not been ableto contact in the past.

The ballots will include individualized estimates of the benefitreductions for each specific voter, information sponsors arerequired to provide Treasury.

Sponsors will pay all costs associated with distribution ofballots, including postage, according to the temporary rules, whichare scheduled to go into affect June 2017, and expire June2018.

Sponsors will also be required to send electronic notificationto participants that the ballot will be arriving in the mail, ameasure included to assure that participants accustomed toreceiving information electronically will know the ballots arecoming in the mail.

Participants will have at least 21 days to cast their vote fromthe time they receive their ballots.

Votes will be cast one of two ways: electronically, or on line,or via a telephone vote. Votes received in any other form, such asin paper, will not be counted, according to the temporaryrules.

Treasury will certify the votes seven days after the close ofvoting.