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Multiemployer Plans Zone Status, Summer 2017 (PDF)
"[T]he survey finding that about two-thirds of calendar-year plans are in the green zone should not obscure the fact that just about half of all participants in the survey are in red-zone plans. Significantly, about one-quarter of the participants in the survey are in plans that are also in 'critical and declining' status." (Segal Consulting)
The Multiemployer Pension System: Simulations of the Status Quo (PDF)
"This paper presents simulations of the multiemployer pension system under various sets of assumptions, so as to assess the range of possible outcomes should the basic features of the multiemployer system remain unchanged. Metrics presented include the number of plans projected to become insolvent, the number of participants in these plans, and the projected year of insolvency of the PBGC's multiemployer guarantee fund. The simulations were performed using the Multiemployer Pension Simulation Model (MEPSIM) ... [which] simulates almost all of the 1,300 plans in the multiemployer universe, excluding only those plans that lack sufficiently complete 5500 data." (The Pension Analytics Group)
First Circuit Opinion: Jurisdiction Exists for Multiemployer Plan Post-Judgment Action to Impose Withdrawal Liability on Successor Employer (PDF)
21 pages. "[It is uncontroverted in the First Circuit] that a plaintiff may seek to impose ERISA liability on an alter ego of the employer that formally bears the obligations imposed by the statute. The dispute here concerns the Fund's attempt to do so in a new action brought subsequent to a judgment against the signatory employer.... Here, the Fund maintains that N&D was -- at the pertinent times -- the same company as D&N and, as such, bore the same obligation under ERISA for the payment of that liability.... The Fund's claim against N&D was thus anchored in ERISA and premised on N&D's de facto status as an ERISA employer, and not ... on alleged wrongful conduct outside the scope of the federal statute." [New England Teamsters and Trucking Industry Pension Fund v.N&D Transportation Co., No. 15-2553 (1st Cir. Aug. 2, 2017)] (U.S. Court of Appeals for the First Circuit)
Pension Insurance System for Union Plans Still Faces Train Wreck
"The latest report, for fiscal year 2016, echoes previous warnings the [PBGC] has issued about its multiemployer program, which covers about 10 million workers. More than 100 plans insured by the agency have told their members that their plans will be insolvent within 20 years, the report says. The PBGC's own insolvency could leave the benefits of some 1.2 million participants in those plans without any safety net." (Bloomberg BNA)
Treasury Approves New York State Teamsters Conference Pension and Retirement Fund Application to Reduce Benefits
"On August 3, 2017, the Board of Trustees of the New York State Teamsters Conference Pension and Retirement Fund was notified that its application to reduce pension benefits under [MPRA] was approved by Treasury.... [T]he proposed benefit reduction will now be subject to a vote of participants and beneficiaries of the Fund. Ballots will be mailed to participants on or around August 14, 2017.... Unless a majority of participants and beneficiaries vote to reject the proposed benefit reduction, the proposed benefit reduction will go into effect on October 1, 2017." (U.S. Department of the Treasury)
[Guidance Overview] Treasury Modifies Procedures for Applications for Multiemployer Plan Benefit Suspensions
"The most significant change in the procedure concerns the actuarial assumptions. Prior procedures required the application to describe the actuarial assumptions used in making projections of the plan's financial status. The revised procedure contains a new Appendix B, 'Information on Actuarial Assumptions and Methods' [which] requires a detailed description of each of the actuarial assumptions used to project the plan's status, including supporting data, the plan's past experience regarding each assumption, and justification of the assumptions in light of the experience." (Cheiron)
Notes from Meeting of Actuaries 'Intersector Group' with PBGC, May 3, 2017 (PDF)
9 pages. Topics include: ... [1] How does the new administration affect the current priorities? ... [2] What is PBGC's plan with respect to mortality assumptions now that the IRS proposed regulations have been released? ... [3] Is PBGC moving forward with review of all other assumptions (e.g., ERISA Section 4044), and what can be expected on that front? ... [4] Are there any changes in the types of issues PBGC is seeing on audits of plan terminations or premium filings? ... PBGC provided a litany of errors it commonly discovers ... [5] Does PBGC expect to finalize the multiemployer plan merger regulation, and are any changes likely from the proposed regulation? (American Academy of Actuaries, Conference of Consulting Actuaries, Society of Actuaries, and ASPPA College of Pension Actuaries [ACOPA])
Notes from Meeting of Actuaries 'Intersector Group' with IRS, May 3, 2017 (PDF)
10 pages. Topics include: [1] Finalizing mortality table regulations ... [2] Change in funding methods ... [3] Relief for closed DB plans' nondiscrimination testing ... [4] Open issues related to variable annuity and hybrid plan designs ... [5] Adjusted Funding Target Attainment Percentage (AFTAP) certifications ... [6] Hybrid plans with interest credit choice based on age ... [7] Cash balance plans with market-based interest crediting rates. (American Academy of Actuaries, Conference of Consulting Actuaries, Society of Actuaries, and ASPPA College of Pension Actuaries [ACOPA])
Treasury Department Gives Thumbs Up to Second Pension Rescue
"The Furniture Workers fund's proposal is the first under the MPRA to have its plan partition request get conditional approval from the federal Pension Benefit Guaranty Corporation, which guarantees a minimum benefit to plan participants. If the partition is approved as part of a vote by plan members, the plan would be divided into two plans -- the original plan and a successor plan -- with the PBGC providing financial assistance to the successor plan." (Bloomberg BNA)
Multiemployer Plans on the Rocks: Furniture Workers Pension Allowed to Cut Retiree Benefits
"[Most multiemployer plans (here, MEPs)] are greatly underfunded, not just the MPRA-applied plans.... [T]he percentage of the liability that's for active employees is very low for the MPRA plans compared to all the other MEPs. For all the other MEPs, almost 40% of the total liability was for active employees." (STUMP)
[Official Guidance] Text of Treasury Department Letter Approving United Furniture Workers 'Pension Fund A' Application to Reduce Benefits (PDF)
On July 20, 2017, the Board of Trustees of the United Furniture Workers Pension Fund A (Fund) was notified that its second application to reduce pension benefits under MPRA was approved by Treasury. As a result, the proposed benefit reductions will now be subject to a vote of participants and beneficiaries of the Fund. Ballots will be mailed to participants and beneficiaries on or around August 1, 2017. (U.S. Department of the Treasury)
Treasury Modifies Multiemployer Benefit Suspension Procedures
"The revised procedures [in Rev. Proc. 2017-43 ] are effective for applications submitted on or after September 1, 2017, and are intended to facilitate the department's review in light of its experience processing benefit suspension applications." (Conduent)
[Official Guidance] Text of IRS Rev. Proc. 2017-43: Application Procedures for Approval of Benefit Suspensions for Certain Multiemployer Defined Benefit Pension Plans Under Section 432(e)(9) (PDF)
43 pages. "This revenue procedure contains revised procedures for applications for a suspension of benefits under a multiemployer defined benefit pension plan that is in critical and declining status under Section 432(e)(9).... The procedures set forth in this revenue procedure must be followed for applications submitted on or after September 1, 2017.... This revenue procedure includes the following changes from Rev. Proc. 2016-27 ...
  • the projected withdrawal liability payments that are included as part of the projection of the plan's available resources, and as part of the support for the certification that the plan is projected to avoid insolvency ... must be separately identified as projected payments attributable to prior withdrawals and projected payments attributable to expected future withdrawals....
  • the requirement to provide sample calculations with respect to the guarantee-based limitation under Section 432(e)(9)(D)(i) and the disability-based limitation under Section 432(e)(9)(D)(iii) for an individual in each category or group that is treated differently under the suspension [is replaced] with a requirement that those sample calculations be provided only for an individual currently receiving benefits, a contingent beneficiary of an individual currently receiving benefits, and a future retiree....
  • specify the age categories for which sample calculations with respect to the age-based limitation under Section 432(e)(9)(D)(ii) (taking into account the guarantee-based limitation and, if applicable, the disability-based limitation) must be provided....
  • [clarification of] the different categories of individuals with respect to which sample notices must be provided as part of the application....
  • consolidate the descriptions of the actuarial assumptions used with respect to certain illustrations and projections included in the application ... [and] provide additional detail regarding those assumptions....
  • require the inclusion of a narrative statement of the reasons the plan is in critical and declining status....
  • a requirement to provide ... the accountant's report under section 103(a)(3) of ERISA....
  • minor clarifications to the Model Notice of Application for Approval of a Proposed Reduction of Benefits....
  • minor clarifications to the power of attorney and declaration of representative form....
  • clarifications to the application checklist[.]"
(Internal Revenue Service [IRS])
Union Pension Plan Participation Can Create Massive Unexpected Liabilities
"Employers have the right to request an annual written estimate of withdrawal liability from any multiemployer pension plan in which they participate. The plan may charge a reasonable fee for the request and may take up to 180 days to comply with the request. An employer who participates in a multiemployer pension plan should request such an estimate on an annual basis so it is aware of the amount of any potential withdrawal liability." (Frost Brown Todd LLC)
Circuit Courts Split on Structural Conflicts of Taft-Hartley Boards When Reviewing ERISA Benefits Determinations
"On the one hand, [LMRA] requires that one-half of the board of a Taft-Hartley plan consist of trustees who are appointed by the employers who fund the plan, and, as such, are arguably motivated to deny the claim for the sake of saving costs. But on the other hand, the other half of the board consists of union-designated trustees who are arguably motivated to grant the claim to help their members.... [T]he Ninth, Sixth, and Fourth Circuits [have ruled] that the boards of trustees of Taft-Hartley plans are not structurally conflicted and the Second Circuit [has ruled] that they are structurally conflicted. This article reviews the underpinnings for the conflict of interest analysis generally and the reasoning of the differing rulings applying this analysis to Taft-Hartley plans." (Proskauer Rose LLP)
Law Firm Can't Escape Malpractice Claim Over ERISA Advice
"There are issues of fact on whether the law firm failed in its duty of care in providing legal advice as well as issues related to causation and damages, Judge George Caram Steeh of the U.S. District Court for the Eastern District of Michigan held June 30.... SSL Assets alleged that Jaffe provided faulty legal advice that ultimately made the investment firm liable for $3.9 million in withdrawal liability under [ERISA] and made it invest several millions in supporting a newly acquired company." [ Cohen v. Jaffe Raitt Heuer & Weiss, P.C. , No. 16-11484 (E.D. Mich. June 30, 2017)] (Bloomberg BNA)
American Academy of Actuaries Issue Brief: Overview of Multiemployer Issues (PDF)
9 pages. "Of the more than 10 million people who participate in multiemployer pension plans, approximately 1 million are in 100 plans that are projected to be unable to pay the full benefits that have been promised.... Tackling the multiemployer pension plan issue will require solutions that focus on securing 'legacy' pensions and also assuring a secure retirement system in the future. There are only two ways to remedy the situation -- infuse more money into the plans or reduce benefits." (American Academy of Actuaries)
First Comprehensive Look at Multiemployer Health Plans
"The total number of plans in the study was 1,823 for the 2005 plan year, declined steadily to 1,595 in 2013, and then increased slightly to 1,602 for the 2014 plan year.... The 1,602 health plans in the study had more than five million covered participants.... The plans in the study reported more than 209,000 contributing employers.... One in seven plans (14.7%) have costs above $14,000 per participant per year (PPPY), while one in seven (15.4%) have PPPY costs below $6,000." (International Foundation of Employee Benefit Plans [IFEBP])
[Guidance Overview] Primer on Withdrawal Liability
"Withdrawal liability has become a particularly significant issue due to a confluence of factors, including the impact of the recession, historically low interest rates, and changing workforce demographics. This primer is intended to introduce the reader to the basic rules governing the assessment and collection of withdrawal liability and their application in certain situations." (Jackson Lewis P.C., via Association of Corporate Counsel)
Who Really Loses When a Multiemployer Pension Plan Fails?
"Employers are not in the driver's seat when it comes to multiemployer pension plans. The trustees are charged with making very unpopular and difficult decisions ... Employees, retirees, and the general public will likely blame the employer for these broken promises.... It is possible to make these multiemployer pension plan participants whole. But, the employer faces a gauntlet of regulations, procedures, and potential confusion on the part of the plan participants." (Graydon Head & Ritchey LLP)
[Discussion] How Many EINs for a Multiemployer Plan? And Who Files?
"Is there a need to have separate EINs for the fund office of a multiemployer plan and for the plan itself? In the case of a corporation, for example, you would have separate EINs for the corporation and for its plan. I'm wondering whether the same thing is needed for a multiemployer plan -- for example, so that a tax levy that should apply to assets of the fund office (e.g., for failure to deposit withholding taxes on their employees' wages) would not be applied to plan assets. Also, who files for the EIN? The instructions talk about having the 'responsible party' do so. But a multiemployer fund has co-chairs (one union, one management). Can either of them do it?" (BenefitsLink Message Boards)
PBGC Reverses Expansion of Early Warning Factors
"Plan sponsors and others had criticized the new additions to the list as too vague. There were also concerns that these factors could result in more forcefully sought financial concessions from plan sponsors that could ill afford them. The PBGC initially claimed that it had always used similar criteria in its screening process." (Willis Towers Watson)
The Multiemployer Plan Financial Crisis: Effect on Single Employer Plans
"[It] seems likely that any ultimate solution (if there is one) will involve some sort of federal bailout. That bailout could possibly involve single employer plans in some way. For instance, Senator Sanders's KOPPA proposal would fund multiemployer plan benefits by: [1] transferring assets from the PBGC single employer program; and [2] capping contributions to defined contribution plans, to generate tax revenues to pay for direct federal Treasury funding." (October Three Consulting)
[Official Guidance] Text of Treasury Department Extension of Comment Period for Multiemployer Pension Plan Application to Reduce Benefits: United Furniture Workers Pension Fund A
"On April 19, 2017, the Department of the Treasury published a notice of availability and request for comments regarding an application to reduce benefits under the United Furniture Workers Pension Fund A (UFW Pension Fund) in accordance with [MPRA].... The comment period for the notice published April 19, 2017 (82 FR 18536), is extended. Comments must be received on or before June 20, 2017." (U.S. Department of the Treasury)
[Official Guidance] Text of Treasury Department Notice of Multiemployer Pension Plan Application to Reduce Benefits: New York State Teamsters Conference Pension and Retirement Fund
"The Board of Trustees of the New York State Teamsters Conference Pension and Retirement Fund, a multiemployer pension plan, has submitted an application to reduce benefits under the plan in accordance with [MPRA]. The purpose of this notice is to announce that the application ... has been published on the Treasury website , and to request public comments on the application from interested parties, including participants and beneficiaries, employee organizations, and contributing employers of the [fund]." (U.S. Department of the Treasury)
Teamsters to Propose Fix for Pensions, But Will It Work?
"The proposal calls for Congress to create a nonprofit private-sector corporation tasked primarily with making loans to poorly funded plans or to employers that participate in such plans. Money for the loans would come from bond purchases by investors. Payments on the bonds would be guaranteed by the full faith and credit of the U.S. Treasury." (Bloomberg BNA)
WestRock Challenge to Pension Change Dies in 11th Circuit
"Can an employer use [ERISA] to challenge changes made to an underfunded multiemployer pension fund's rehabilitation plan? The U.S. Court of Appeals for the Eleventh Circuit held May 16 that no viable ERISA claim could proceed.... According to the Eleventh Circuit, the disputed rehabilitation plan forced employers to make contributions to address the plan's funding deficiency when they left the plan. This payment was separate from, and in addition to, any withdrawal liability payments the employer was statutorily required to pay, the Eleventh Circuit concluded." [ WestRock RKT Co. v. Pace Industry Union-Mgmt. Pension Fund , No. 16-16443 (11th Cir. May 16, 2017) (Bloomberg BNA)
Canadian Court Rejects Multiemployer Plan's ERISA Controlled-Group Liability Claims (PDF)
"The court held that ERISA cannot be applied to hold Canadian entities liable for multiemployer withdrawal liability simply because those entities are owned by a common parent.... The decision marks one of the few instances to date that a court has analyzed ERISA's reach across the U.S. border, and may make it more difficult for multiemployer plans and the PBGC to seek payment from foreign entities of liabilities associated with underfunded multiemployer and single employer plans." [ Walter Energy Canada Holdings, Inc. (Re) , 2017 BCSC 709, May 1, 2017] (Groom Law Group)
Multiemployer Pension Plans: Critical Plans Treading Water, Waiting to Drown
"So far: five applications denied, one accepted.... [E]ach denial comes with a letter. [Here is] a rundown.... [The multiemployer pension plan] program is in fairly bad condition at the PBGC, and is currently projected to have a 50/50 chance of running out of cash by 2025. The MPRA is there not merely to try to get some of the [multiemployer pension plans] to be sustaining, but so that the PBGC itself doesn't run out of money. The Treasury isn't interested in allowing for benefit cuts when the plans are just going to land on the PBGC anyway." (STUMP)
[Official Guidance] Text of Treasury Department Denial of Automotive Industries Pension Fund Application to Reduce Benefits (PDF)
"Treasury has concluded that several of the key actuarial assumptions used for the cash flow projections in the Application are not reasonable. Specifically, the mortality rate assumption, the assumption regarding the rate at which married participants will elect a joint and survivor benefit, and the assumption regarding the probability of benefit commencement of terminated vested participants are not reasonable under the standards in the regulations. Because the Application uses projections that rely on assumptions that are not reasonable, it fails to demonstrate that the proposed suspension is reasonably estimated to achieve, but not materially exceed, the level that is necessary to avoid insolvency. Accordingly, the proposed suspension does not meet the statutory requirements for approval[.]" (U.S. Department of the Treasury)
Retiree-Employee Ratios Are Dooming the Multiemployer Pension
"Even as Congress has taken steps to solve the multiemployer pension problem, the plans continue to face a death spiral. In fiscal year 2016, 10 multiemployer plans went insolvent and requested financial assistance from the PBGC. The federal agency is now giving financial assistance to a record-high 71 multiemployer plans." (Bloomberg BNA)
Multiemployer Pension Funding Study, Spring 2017
"This study reports on the estimated funded status of all U.S. multiemployer plans as of December 31, 2016, and shows the change in funding levels from June 30, 2016. The aggregate funded percentage for multiemployer plans is estimated to be 77% as of December 31, 2016, compared with 76% as of June 30, 2016. The estimated 2016 calendar year investment return for our simplified portfolio was about 7.70%, which would produce a slight gain versus most plans' investment return assumptions." (Milliman)
CalSTRS Employer Contributions Are Doubling, But Is That Enough?
"The 2014 legislation freezes rates paid by school districts at 20.5 percent of pay, after they more than double to 19.1 percent by the end of this decade. But ... the state rate can continue to increase up to 0.5 percent of pay each year.... Actuaries said CalSTRS, only 64 percent funded last June, is still on track to reach 100 percent funding by 2046. Whether CalSTRS remains on the path to full funding ... will largely depend on whether the state pays enough under the new plan." (Calpensions)
[Opinion] The Keep Our Pension Promises Act of 2017
"KOPPA would create a Legacy Fund in the PBGC. Underfunded multiemployer pension plans would apply to receive money from the Legacy Fund to pay retirees the benefits they earned. When an application is accepted, the money provided by the Legacy Fund is combined with employer contributions and investment income and should be sufficient enough to enable plans in the even worst financial shape ... to cover benefit costs on a year-to-year basis.... The Legacy Fund created by KOPPA would be funded by partially repealing two tax breaks that only benefit wealthy individuals." (Pension Rights Center)
[Official Guidance] Text of Treasury Department Notice of Multiemployer Pension Plan Application to Reduce Benefits: Southwest Ohio Regional Council of Carpenters Pension Plan
"The Board of Trustees of the Southwest Ohio Regional Council of Carpenters Pension Plan (SWORCC Pension Plan) ... has submitted an application to reduce benefits under the plan in accordance with [MPRA].... [T]he application ... has been published on the Treasury website , and ... public comments [are requested] from interested parties, including participants and beneficiaries, employee organizations, and contributing employers of the SWORCC Pension Plan." (U.S. Department of the Treasury)
[Official Guidance] Text of PBGC Submission of Information Collection for OMB Review, Comment Request: Mergers and Transfers Between Multiemployer Plans
"Section 4231(a) and (b) of [ERISA] requires plans that are involved in a merger or transfer to give PBGC 120 days' notice of the transaction and provides that if PBGC determines that specified requirements are satisfied, the transaction will be deemed not to be in violation of ERISA section 406(a) or (b)(2) (dealing with prohibited transactions). PBGC's regulation on Mergers and Transfers Between Multiemployer Plans (29 CFR part 4231) sets forth the procedures for giving notice of a merger or transfer under section 4231 and for requesting a determination that a transaction complies with section 4231.... PBGC intends to request that OMB extend its approval for another three years." (Pension Benefit Guaranty Corporation [PBGC])
[Official Guidance] Text of Treasury Department Notice of Multiemployer Pension Plan Application to Reduce Benefits: IAM Motor City Pension Fund
"The Board of Trustees of the International Association of Machinists Motor City Pension Fund (IAM Motor City Pension Fund) ... has submitted an application to reduce benefits under the plan in accordance with [MPRA].... [T]he application ... has been published on the Treasury website , and ... public comments [are requested] from interested parties, including participants and beneficiaries, employee organizations, and contributing employers[.]" (U.S. Department of the Treasury)
[Official Guidance] Text of Treasury Department Notice of Multiemployer Pension Plan Application to Reduce Benefits: Alaska Ironworkers Pension Trust
"The Board of Trustees of the Alaska Ironworkers Pension Trust ... has submitted an application to reduce benefits under the plan in accordance with [MPRA].... [T]he application ... has been published on the Treasury website , and to... public comments [are requested] from interested parties, including participants and beneficiaries, employee organizations, and contributing employers[.]" (U.S. Department of the Treasury)
Addressing the Unique Investment Challenges of Multiemployer Defined Benefit Plans
"Across asset classes, active management and the relentless pursuit of alpha are crucial to generating needed returns. Private investments could be the single biggest driver of asset return for many plans ... [I]ndividual investment strategies and the entire portfolio should be tailored to each plan's specific participant demographics, economic conditions, and risk tolerances. Use of these sophisticated strategies can introduce heightened illiquidity, volatility, and drawdown risks. Long-term success requires effective approaches to designing, executing, and monitoring these strategies, and diligently managing their risks." (Cambridge Associates)
Flurry of Pension Rescue Filings May Indicate Renewed Confidence
"Four more financially beleaguered multiemployer pension plans are ... seeking Treasury Department permission to cut benefits.... The filings show 'increased trustee and adviser confidence' that plan trustees now 'know what standards will be applied and that approval is possible,' Dominic DeMatties, a partner with Alston & Bird, [said] ... That's in the wake of the first approval of a request to cut benefits and as plans have digested final regulations issued a year ago[.]" (Bloomberg BNA)
The First Dinosaur Has Died: Multiemployer Plan Runs Out of Money, Other Insolvencies Loom
"The New York Teamsters Road Carriers Local 707 Pension Fund (the 'Local 707 Pension Fund') is dead, reportedly having run out of money in early March 2017.... The average monthly payment will be slashed by the PBGC to $570. This is a reduction of 56% for a population which is aging and unlikely to be able to engage in full-time employment.... [T]he Local 707 Pension Fund was one of several pension funds that sought relief under [MPRA] to be permitted to have its participants consider a reduction of core benefits. However, its application was rejected by the Department of Treasury." (Jackson Lewis P.C.)
Upstate Teamsters (Local 294) Gets Reprieve from Pension Cuts
"Earlier in April, the agency sent back the Upstate Teamster's blueprint to regain solvency. The agency offered several suggestions, including an updating of the fund's actuarial mortality tables. Federal officials also wanted the fund operators to make a more optimistic assumption about their annual rate of return, which was pegged at 6.75 percent for the next decade." (TimesUnion.com)
[Official Guidance] Text of Treasury Department Notice of Multiemployer Pension Plan Application to Reduce Benefits: Teamsters Local 805 Pension and Retirement Fund
"The Board of Trustees of the Teamsters Local 805 Pension and Retirement Fund (Local 805 Pension Fund), a multiemployer pension plan, has submitted an application to reduce benefits under the plan in accordance with the Multiemployer Pension Reform Act of 2014. The purpose of this notice is to announce that the application ... has been published on the Treasury website , and to request public comments on the application from interested parties, including participants and beneficiaries, employee organizations, and contributing employers of the Local 805 Pension Fund." (U.S. Department of the Treasury)
Ohio Carpenters' Multiemployer Pension Plan Applies for Benefit Cuts
"Trustees of the plan, which had $216.9 million in assets and $471.3 million in liabilities as of Jan. 1 for a funding ratio of 46%, submitted a plan under [MPRA] that calls for reducing, or suspending, benefits by an average of 17% for 90% of plan participants, including retirees.... People who retired before age 62 would see deeper cuts between 17% and 66%[.]" (Pensions & Investments)
Fifteenth Union Plan Files for Approval of Pension Reductions
"The Southwest Ohio Regional Council of Carpenters Pension Plan out of Austintown, OH just became the fifteenth multiemployer (union) plan to file for benefit cuts under MPRA in an attempt to avoid insolvency." (Burypensions)
[Official Guidance] Text of IRS Notice of Application to Reduce Benefits Filed by United Furniture Workers Pension Fund A
"The Board of Trustees of the United Furniture Workers Pension Fund A ... has submitted an application to Treasury to reduce benefits under the plan in accordance with [MPRA]. The purpose of this notice is to announce that the application ... has been published on the website of the Department of the Treasury, and to request public comments on the application from interested parties, including participants and beneficiaries, employee organizations, and contributing employers[.]" (U.S. Department of the Treasury)
[Official Guidance] Text of PBGC Approval of Special Withdrawal Liability Rules: Service Employees International Union Local 1 Cleveland Pension Plan
"[A]n employer that completely or partially withdraws from a defined benefit multiemployer pension plan becomes liable for a proportional share of the plan's unfunded vested benefits.... Congress nevertheless allowed for the possibility that, in certain industries, the fact that particular employers go out of business (or cease operations in a specific geographic region) might not result in permanent damage to the pension plan's contribution base.... Each request for approval of a plan amendment establishing special withdrawal liability rules must provide PBGC with detailed financial and actuarial data about the plan.... PBGC [has] received a request [from] ... a multiemployer pension plan covering the commercial building cleaning and security industries in the greater Cleveland, Ohio area." (Pension Benefit Guaranty Corporation [PBGC])
Two More Union Plans File Applications for Benefit Reduction
"Bringing the total to fourteen. Alaska Ironworkers Pension Plan of Anchorage, AK and Local 805 Pension Fund of New York, NY just popped up on the MPRA website ." (Burypensions)
Potential Pension Cuts for 5,200 Teamsters Delayed
"The New York State Teamsters Conference Pension and Retirement Fund, which has about 34,000 participants statewide, had submitted a plan to the U.S. Treasury Department, seeking permission to impose the cuts.... Now the fund's board of trustees has withdrawn its application, putting off potential cuts until later this year." (Buffalo News)
Twelfth Union Plan Files for Benefit Reductions Under MPRA
"The [International Association] of Machinists Motor City Pension Fund out of Troy, MI ... became the twelfth multiemployer plan to file for benefit cuts under MPRA in an attempt to avoid insolvency." (Burypensions)
[Guidance Overview] Informal MPRA Tips from Treasury, PBGC and DOL, Courtesy of the American Academy of Actuaries (PDF)
"The Multiemployer Subcommittee of the American Academy of Actuaries (Subcommittee) met with members of the Department of Treasury, the [PBGC], and the [DOL] at the end of February 2017 and discussed applications by multiemployer pension plans in critical and declining status to suspend benefits or partition liabilities, as permitted under [MPRA].... [T]he Discussion Notes are a useful resource to summarize how these agencies saw the first 12 applications and what tips were offered to actuaries and plan sponsors at the meeting." (United Actuarial Services, Inc.)
Proposed Multiemployer Composite Plans: Background and Analysis (PDF)
19 pages. "The composite plan proposal is the third element of a proposal ... to reform multiemployer DB pension plans. The first two elements were adopted as the Multiemployer Pension Reform Act of 2014.... For employers, composite plans would offer several advantages over DB plans.... Retired participants in composite plans would receive monthly benefit payments. However, the benefit amounts could increase or decrease, depending on the investment experience of the plan." [Report R44722, Mar. 27, 2017] (Congressional Research Service [CRS])
[Guidance Overview] MPRA Benefit Suspension Applications: Notes from Meeting of Actuaries and Treasury, PBGC and DOL (PDF)
"The application for benefits suspensions under MPRA represent a significant time and expense for all parties involved. Thus, it is in the best interest of plan sponsors, actuaries, Treasury, and PBGC that there is a high success rate with respect to future MPRA applications. The discussion in this exchange was intended to provide plan sponsors and actuaries with insights about the MPRA application review process with a goal to help plan sponsors make decisions about applying and to increase the acceptance rate for those who do apply." [Editor's note: the meeting was held on Feb. 22, 2017.] (Multiemployer Plans Subcommittee, American Academy of Actuaries)
Western States Office & Professional Employees Pension Fund Seeks Cuts
"The fund's board has proposed a 29% decrease for all participants and beneficiaries, but no reduction below 110% of the PBGC guaranteed benefit for each affected participant. Under the plan, disability pensions are not reduced, and participants who are age 80 or older on Dec. 31, 2017, have no reduction.... The Western States Office & Professional Employees Pension Fund was first certified to be in critical status with the Treasury Department in 2009, and is projected to become insolvent in 2035 if no changes are made." (Chief Investment Officer [CIO])
[Official Guidance] Text of Treasury Department Notice of Multiemployer Pension Plan Application to Reduce Benefits: Western States Office and Professional Employees Pension Fund
"The Board of Trustees of the Western States Office and Professional Employees Pension Fund (WSOPE Pension Fund) ... has submitted an application to Treasury to reduce benefits under the plan in accordance with [MPRA].... The purpose of this notice is to announce that the application submitted by the Board of Trustees of the WSOPE Pension Fund has been published ... and to request public comments on the application from interested parties, including participants and beneficiaries, employee organizations, and contributing employers of the WSOPE Pension Fund." (U.S. Department of the Treasury)
Text of Application for Benefit Suspensions: Western States Office and Professional Employees Pension Fund
"The Western States Office and Professional Employees Pension Fund application proposing benefit suspensions can be found [on the linked page]. The application is organized by the items specified in Revenue Procedure 2016-27." (U.S. Department of the Treasury)
Treasury Official Leaves Post Overseeing Multiemployer Pension Rescues
"Kenneth R. Feinberg stepped down as the Treasury Department's special master overseeing the implementation of a controversial law permitting pension cuts. Feinberg resigned from his role the week of Feb. 27 because his work was 'largely complete and there was no reason' to 'remain, having helped establish the precedents for reviewing private multiemployer pension plans pursuant to [MPRA]'[.]" (Bloomberg BNA)
Proposed Pension Accountability Act Would Protect Retirees in Troubled Multiemployer Pension Plans
"[F]or struggling pension plans seeking cuts, [the Act] will make the participant vote binding in all situations. This will give the workers and retirees a seat at the table to influence the solvency reforms. Their majority vote will be required for any pension cuts to occur.... [The Act] will make this vote fair by counting only the ballots that are returned. Unreturned ballots will no longer be counted as a 'yes' vote." (Senator Rob Portman [R-OH])
PBGC Provides Financial Assistance to Road Carriers Local 707 Pension Fund
"The full benefit promised to current retirees and beneficiaries in the 707 Fund averages $1,313 per month, but the average guaranteed benefit is $570. Forty-two percent of the 707 Fund retirees and beneficiaries have benefit reductions of more than half, compared to the amount of their promised benefits. Only 7 percent of current retirees and beneficiaries will receive their full plan-promised benefit amount." (Pension Benefit Guaranty Corporation [PBGC])
[Opinion] America's Crumbling Pension Future?
"[T]he biggest problem with all these multiemployer pension plans is they never had proper governance, were raked on fees by Wall Street, and were poorly managed for decades.... And now that the chickens have come home to roost ... retirees seeing their pension benefits being slashed by half or more are rightfully asking for the government to help them." (Pension Pulse)

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