CINCINNATI. Ohio--The University of Cincinnati has recently suspended the local chapter of the Sigma Alpha Epsilon fraternity after it held a Martin Luther King Jr. "trash party" to celebrate his birthday, Kenneth P. Service, assistant vice president of public affairs, said yesterday.

About 100 chapter members of the off-campus fraternity house threw a party the evening before a school holiday honoring the civil rights leader, the Dartmouth Campus newspaper stated last week. To publicize the party, fraternity members sent fliers for the party to other fraternity and sorority houses asking celebrators to bring such items as a cancelled welfare check. "Your father if you know who he is," and "a radio bigger than your head."

The local chapter of the fraternity has been penalized by a two-year suspension, and it has promised to perform "educational and community service designed to improve their understanding of minority cultures." Service said yesterday.