Benefits in the News > By Subject >

Multiemployer plans


Now Viewing Excerpts and
Recent Headlines

[Official Guidance] Text of Treasury Department Approval of Application to Reduce Benefits Under International Association of Machinists Motor City Pension Plan (PDF)
"Because a majority of voters identified as eligible by the Plan did not vote to reject the benefit reduction, the benefit reduction may go into effect. Treasury, in consultation with DOL and PBGC, has issued a final authorization to reduce benefits under the Plan as described in the Application, effective January 1, 2018, subject to the conditions described [in this letter]." (U.S. Department of the Treasury)
Recent Data on the Funded Status of Multiemployer Pension Plans (PDF)
"A majority of plans are in the green zone ... Most plans have a funded percentage above 70% and many are fully funded ... In the construction industry, a greater percentage of plans with fewer than 1,000 participants are in the red zone than larger plans ... Yet the industry as a whole remains overwhelmingly healthy with very few [critical and declining] plans -- only six in 2017." (Segal Consulting)
Proposed Legislation Would Create Multiemployer Pension Loan Program (PDF)
"The proposed Bill would create an agency in the Treasury Department ... [that] would make low interest rate loans to multiemployer defined benefit plans which are in critical and declining status.... The recipient plan would make interest-only payments for 29 years and a final balloon payment of interest and principal the 30th year.... The idea is that the plans receiving loans could earn enough money from plan's asset investments to pay back the loan and stabilize the plan and multiemployer system." (United Actuarial Services, Inc.)
[Opinion] It's Time to Protect Union Pensions
"The Teamsters have been working diligently for years with key members of Congress trying to come up with a solution to this pension crisis. And with the release of new legislation last month, the union believes it has found it. The bill would boost financially troubled multi-employer pensions so they don't fail. It would create a new agency under the U.S. Treasury Department that would sell bonds in the open market to large investors such as financial firms. The dollars raised, in turn, would go to these retirement plans to stave off cuts or complete failure." (James Hoffa, via The Detroit News)
Union Fund Hit with Excessive Fee Suit
"Similar to many excessive fee lawsuits filed against single-employer plans, the complaint accuses a multiemployer plan of failing to leverage its bargaining power to obtain lower investment and recordkeeping fees." (PLANSPONSOR)
Multiemployer Pension Plans: Current Status and Future Trends (PDF)
71 pages. "At this stage, the majority of proposed solutions to the multiemployer challenge fall into two categories: alleviating the burden of orphaned members -- workers left behind when employers exit -- and providing subsidized loans -- either through direct government lending or government guarantees on private sector loans. Whatever the ultimate solution, a case can be made for a package that involves contributions from employers (tailored not to sink already fragile plans), from plan participants, and from taxpayers." (Center for Retirement Research at Boston College)
Underfunded Multiemployer Fund Proposes 'Two-Pool' Program
"[E]mployers who join the new pool will likely pay a withdrawal liability amount, possibly on a discounted basis, for past unfunded liability. They will then join the 'new pool,' which will be funded at a very high rate -- with reduced benefits -- to prevent future unfunded liability problems like those in the present plan.... [The] Fund's two-pool proposal may mark the first significant proposal by a large multiemployer pension plan since the proposal suggested by the Central States Pension Fund was rejected by the [PBGC] and The Treasury Department during 2016." (Polsinelli PC)
Senate HELP Subcommittee Examines the Mounting Multiemployer Pension Problem
"Members of the Subcommittee heard from the Honorable Tom Reeder, the Director of the [PBGC].... Reeder laid out the high stakes of finding a solution to preserve the pension plans promised to millions of workers and retirees.... PBGC's FY 2016 Projections Report shows that the [single-employer] program will be out of a deficit by 2022.... [T]he Multiemployer Program stands in stark contrast as financial conditions continue to worsen." (Committee on Education and the Workforce, U.S. House of Representatives)
[Opinion] Should Failing Multiemployer Pension Funds Get a Federal Bailout?
"A core challenge is that the financially distressed multiemployer pension plans are in shriveling industries. For example, the United Mine Workers plan has 10 retirees for every active member.... Bailing out pension funds by offering them unpayable loans simply kicks the can down the road and increases future deficits in a non-transparent manner. Worse, this approach could easily spread to public sector retirement plans, allowing them to maintain unsustainable benefit formulas." (The Fiscal Times)
[Opinion] American Academy of Actuaries Comment Letter to PBGC on Proposed Modification to 2017 Form 5500 Schedule MB (PDF)
"PBGC is proposing that basic supporting documentation ... be included as an attachment to Line 4f.... [T]he additional information would enhance the ability of PBGC to perform projections for plans in critical and declining status or which are otherwise approaching insolvency.... [With] one exception ... the additional information will not result in a significant burden for most plan actuaries, as they will have already performed the calculations requested in the supporting documentation." (Multiemployer Plans Committee, American Academy of Actuaries)
Five Ideas for Fixing Unionized Workers' Pension Crisis
"[T]he Multiemployer Pension Reform Act was intended to fix the troubled pension system, but it hasn't quite done the job. Lawmakers, as well as major employers such as United Parcel Service, have thrown out proposals for fixing the pension system. Almost all of the proposals call for some sort of loan program for the plans." (Bloomberg BNA)
Multiemployer Pension Plan Funding Nears Peak Since 2008 Crash
"The interim update by Milliman compared changes in estimated funding levels at U.S. multiemployer defined benefit (DB) plans from December 31, 2016, to June 30, 2017. The aggregate funded percentage for all plans is estimated to have improved to 81% as of June 30 from 77% at the end of 2016, with a multiemployer plan system shortfall reduced by $21 billion." (HR Daily Advisor)
Multiemployer Plan Pension Rescue Bill Proposed
"The bill creates a new agency within the Department of the Treasury called the Pension Rehabilitation Administration (PRA) to make loans to plans and to receive loan payments. The PRA would receive funding from government bonds.... A plan would receive the loan and be required to either purchase an annuity contract for benefits in pay status, or establish a bond portfolio that would match the anticipated payment stream for benefits in pay status. The plan would make interest payments on the loan until maturity." (Cheiron)
Multiemployer Solvency Crisis: Adjustments to the PBGC's Benefit Guarantee to Reduce Pressure on the Guarantee Fund (PDF)
"Using the Multiemployer Pension Simulation Model (MEPSIM), we project that about 130 multiemployer pension plans covering 2.1 million participants will become insolvent over the next 20 years, and that the [PBGC's] multiemployer guarantee fund -- the backstop against such insolvencies -- will itself be exhausted by 2027.... The adjustments to the guarantee that we examine within this paper have a significant downward impact on the present value of projected PBGC assistance payments, but the impact is not sufficient to prevent the exhaustion of the guarantee fund. Given the large number of plans heading towards insolvency, it is unlikely that a single policy action is available to stabilize the guarantee fund. Rather, several simultaneous actions will be required, among which a reduction of the guarantee can be considered." (The Pension Analytics Group)
PBGC Fiscal Year 2017 Annual Report: Multiemployer Program Deficit Widens; Single-Employer Program Continues to Improve
"[T]he deficit in [PBGC's] insurance program for multiemployer plans rose to $65.1 billion at the end of FY 2017, up from $58.8 billion a year earlier. The increase was driven primarily by the ongoing financial decline of several large multiemployer plans that are expected to run out of money in the next decade. PBGC's Single-Employer Insurance Program continued to improve as the deficit dropped to $10.9 billion at the end of FY 2017, compared to $20.6 billion at the end of FY 2016. The primary drivers of the continued improvement include premium and investment income and increases in the interest factors used to measure the value of future liabilities." (Pension Benefit Guaranty Corporation [PBGC])
Treasury Announces Voting Schedule for International Association of Machinists Motor City Pension Plan MPRA Benefit Reductions
"[T]he proposed benefit reductions will now be subject to a vote of participants and beneficiaries of the Plan. Ballots were mailed to participants and beneficiaries on November 16, 2017. The voting period opens November 16, 2017 ... and closes December 7, 2017[.]" (U.S. Department of the Treasury)
[Opinion] Senators Introduce Bills to Save Financially Troubled Multiemployer Plans and Protect Retirees
"These bills set up a new office in the Treasury Department called the Pension Rehabilitation Administration (PRA), which would receive proceeds from the issuance of Treasury bonds. This money would then be lent to financially-troubled plans as long as they meet certain criteria. The Pension Rights Center is particularly pleased that the loans would be used to fully pay the benefits of retirees and that the bill would require plans, which have already been approved to cut benefits under MPRA, to apply for these new loans and if approved, use that money to restore previously suspended benefits." (Pension Rights Center)
[Opinion] A Few Concerns About the Multiemployer Plan Bailout Bill
"If this is an arbitrage deal (like Pension Obligation Bonds (POBs) were supposed to be) then isn't the whole idea to invest the money in riskier investments for profit? Will these plans be able to consider the Treasury bond money as an asset of the trust without a corresponding liability so as to artificially reduce contributions like what is going on with POBs? What happens with plans that have already cut benefits?" (Burypensions)
[Opinion] The Mother of All U.S. Pension Bailouts?
"[Sen. Sherrod Brown's] bill will ensure more mediocrity as there will be no incentive whatsoever to change what is fundamentally plaguing large U.S. pensions. Your discount rate is too high? No problem, keep it. Your plan is chronically underfunded? No problem, just borrow from the U.S. Treasury in perpetuity. You have no risk-sharing in your plan? Who cares, Uncle Sam will backstop it all so you don't need risk-sharing or better governance." (Pension Pulse)
Sen. Sherrod Brown to Unveil Multiemployer Loan Program Legislation
"The bill ... would create a new office within the Treasury Department called the Pension Rehabilitation Administration. The funds would come from the sale of Treasury-issued bonds to financial institutions. The pension funds could borrow for 30 years at low interest rates.... The bill would also fund a program at the [PBGC] to finance any remaining needs of pension plans borrowing from the new program." (Pensions & Investments)
[Official Guidance] Text of Treasury Department Letter Approving Benefit Reductions by International Association of Machinists Motor City Pension Plan (PDF)
"In consultation with the Secretary of Labor and the Pension Benefit Guaranty Corporation, Treasury has determined that the Plan is eligible to reduce benefits under MPRA and that your application satisfies the requirements of subparagraphs (C), (D), (E), and (F) of section 432(e)(9) of the Internal Revenue Code, as added by MPRA." [Letter dated Nov. 6, 2017] (U.S. Department of the Treasury)
The Continuing Downward Spiral and Death Knell of the Multi-Employer Defined Benefit Plan
"In 2012, the Fund amended the Rehabilitation Plan to include a provision stating that an employer withdrawing from the Fund was required to pay a portion of the Fund's accumulated funding deficiency in addition to the statutorily mandated withdrawal liability.... Westrock sought relief from that amendment ... declaration that the amendment violated ERISA. The district court never addressed the merits of the action but rather dismissed the complaint ... stating that Westrock lacked standing. The Eleventh Circuit, acknowledging that this was a case of first impression which turned on statutory interpretation, affirmed the district court. In doing so, it opined that civil actions under ERISA were limited only to those parties and actions which Congress specifically enumerated." [ Westrock RKT Co. v. Pace Industry Union-Management Pension Fund , No. 16-16443 (11th Cir. May 16, 2017)] (Jackson Lewis P.C.)
[Guidance Overview] SOA Mortality Improvement Scale MP-2017 Released
"Since the updated scale reflects more recent experience, it is likely a better estimate of future improvement than scale MP-2016, and with it comes the added benefit of lower liabilities. Sponsors who finalized accounting results earlier in the year may receive requests from auditors to quantify the effect of the new scale." (Cowden Associates, Inc.)
Employer Withdrawal Liability: Something to Consider Before Signing a CBA
"The CBA will likely not refer to withdrawal liability and the union is under no legal obligation to disclose this potential liability to you prior to signing the CBA.... Does the CBA require contributions to be made to one or more defined benefit pension plan(s)? If so, what is the funding status of the pension plans for which you would be obligated to contribute to under the CBA? ... Does the plan provide for a free look period? ... Will the union provide any indemnification for withdrawal liability?" (Graydon)
Sun Capital Redux: Private Equity Fund Seeks Declaratory Judgment on Controlled Group Liability for Portfolio Company's Pension Liabilities
"A complaint filed by Trilantic Capital Partners ... shows that multiemployer pension funds and the PBGC are continuing to pursue a strategy of asserting controlled group liability claims against private investment funds, and previews some of the facts that private investment funds may try to use to rebut those arguments. The complaint seeks a declaratory judgment holding that Trilantic is not in the 'controlled group' of one of its portfolio companies[.]" [Trilantic Capital Partners IV, LP v. United Food & Comm'l Workers Int'l Union-Ind. Pension Fund; New England Teamsters & Trucking Ind. Pension Fund; Nat'l Retirement Fund; and PBGC, No. 17-7485 (S.D.N.Y., complaint filed Sept. 29, 2017)] (Proskauer Rose LLP)
Loans by Federal Government to Multiemployer Plans Could Cost $7 Billion
"Advocates for multiemployer plans are putting the finishing touches on various federal proposals that would offer low-interest financing for struggling plans.... 55 pension funds designated as critical and declining with a combined $28 billion in net assets at the end of 2015 would be eligible for credit assistance. Under one proposal, the gross loan disbursement would be $23.3 billion payable over five years, with the favorable loan terms costing taxpayers $7.2 billion, without factoring in default risk, the researchers said; a one-third default rate on those loans would cost $10.9 billion." (Pensions & Investments)
Teamsters Pension Plan Warns Thousands of Beneficiaries That the Checks May Get Smaller
"The Western Pennsylvania Teamsters fund -- which has about 48 cents for every $1 in benefits it owes to retirees and workers -- notified participants in April that it is considering cutting benefits in order to insure that the fund doesn't become insolvent. The plan is expected to pay out nearly $129 million in benefits this year but will collect only about $54 million in contributions. If the current level of benefits is maintained, the fund is projected to run out of money in 2028." (Pittsburgh Post-Gazette)
Multiemployer Pension Funded Status Improved in First Six Months of 2017 (PDF)
"Multiemployer plan funding as of June 30, 2017, is nearing its best position since the market collapse of 2008. The aggregate funded percentage for multiemployer plans is estimated to have improved to 81% as of June 30, 2017, compared with 77% as of December 31, 2016, reducing the system's shortfall by $21 billion. The estimated investment return for our simplified portfolio for the first six months of 2017 was about 7.6%, far outpacing plans' investment return assumptions. The gap between the funded percentages of critical versus noncritical plans continues to widen." (Milliman)
IRS Work Plan Provides Focus for Examination of Multiemployer Plans
"The work plan states that for multiemployer plans the IRS will 'continue to examine plans that failed to properly calculate retirement benefits affecting service crediting and/or allocation/accruals, failed to make required minimum distributions, and/or failed to adjust benefits when retirement is delayed beyond the Normal Retirement Age' ... Late retirements pose several complex issues, the resolution of which depends on the plan's provisions and the age at which a participant retires." (Cheiron)
Alaska Ironworkers Pension Trust Withdraws Application fo MPRA Benefit Suspension (PDF)
"[T]he Plan hereby withdraws its Application filed on March 30, 2017 for approval of benefit suspension under [MPRA]. The Plan fully intends to file with the Treasury Department a new application for approval of suspension of benefits under the MPRA on or before December 29, 2017." (U.S. Department of the Treasury)
ERISA Provides No Means for Employer to Challenge Multiemployer Plan Changes
"The case raises a rarely litigated legal question: Can an employer use [ERISA] to challenge changes made to an underfunded multiemployer pension fund's rehabilitation plan? The judge Oct. 17 said no, explaining that ERISA only allows employers to bring a narrow subset of claims against the union benefit funds covering their workers." [ Keyes Fibre Corp. v. Pace Indus. Union-Management Pension Fund , No. 17-613 (M.D. Tenn. Oct. 17, 2017)] (Bloomberg BNA)
2016 Funding Status Update for Multiemployer Plans Seeking MPRA Benefit Suspensions
"Now that 5500 filing season is over and most of the 2016 forms are searchable on the DOL website [this article provides] the status of union plans that have applied for benefit suspensions under MPRA with links to their latest 5500 filing and a focus on the worst funded plan with a reported funded ratio of 2.99% (yes that is the funded ratio and not the RPA interest rate)." (Burypensions)
The Building and Construction Industry Exemption to Withdrawal Liability
"Withdrawing employers in the 'building and construction industry' ... can be completely exempt from liability, provided three requirements are met ... The term 'building and construction industry' is not expressly defined in ERISA.... Employers that have common ownership must be cautious because withdrawal liability will be triggered if any entity in the same controlled group performs covered work without resuming contributions to the pension plan. Moreover, if withdrawal liability is triggered, any entity in the controlled group could potentially be responsible for paying that liability." (Greensfelder)
Central States Funding Update after MPRA Benefit Reduction Denial
"[N]egative net cash flow of over $2 billion annually for a fund that likely has about $14 billion left in it now means depletion fairly soon considering that those benefit payouts would continue to grow as revenue sources dry up. Assuming no revenue infusions (federal bailout) the percentage that benefits need to be cut corresponding to the years until asset depletion assuming those cuts would look something like this: 0% - 8 years; 30% - 13 years; 50% - 20 years[.]" (Burypensions)
Another Union Plan Withdraws Its MPRA Benefit Reduction Application
"The Southwest Ohio Regional Council of Carpenters Pension Plan out of Austintown, OH was the fifteenth (and last) multiemployer plan to file for benefit suspensions under MPRA. [On Friday, Oct. 13,] a letter popped up on the MPRA website withdrawing that application." (Burypensions)
House and Senate Bills Would Provide Loans for United Mine Workers Pension Fund
"Bipartisan legislation creating an emergency loan program allowing the United Mine Workers of America 1974 Pension Plan, Washington, to avoid insolvency was introduced Tuesday in the House and Senate. As of June 30, 2016, the pension fund had $4.1 billion in assets and $6.17 billion in liabilities, but with more than 10 times as many retirees as active participants, it is only 39.8% funded by actuarial standards." (Pensions & Investments)
The Reality of the Multiemployer Pension Reform Act
"MPRA was intended to provide multiemployer plan trustees with the difficult, but necessary tools required to restore their troubled plans to solvency, and protect retirees from the even larger benefit reductions that the retirees will see when their plans go insolvent and subject to the PBGC guarantee ... [Of] the three MPRA application approvals to date, all had previously applied to the Treasury and then withdrew ... Each plan then resubmitted their application and went through the process again.... [In] order to reapply, an organization must pay for revised actuary projections, and inform participants again that their benefits are going to be cut." (PLANSPONSOR)
Operational Risk Is the Achilles' Heel of DC Plans
"Recommended first steps to an integrated approach to managing operational risk include: [1] Review committee charters ... contracts and job descriptions ... [2] Catalogue planned audits and assessments ... [3] Request a copy of your key service providers' cybersecurity policies and business-continuity plans, and ask for annual updates.... [4] Check the investment policy ... [5] Review service providers' reports[.]" (Segal Consulting)
High Prescription Drug Cost Trends Projected to Be Lower for 2018
"Drug trends for actives and early retirees are expected to remain in the double-digits, continuing to be much higher than medical trend. Price inflation -- not utilization -- is the leading driver of trend... [T]he cost increases of pharmacy benefits now exceed the cost increases of inpatient hospital claim expenses or physician claim expenses ... [O]nce specialty Rx paid through the medical plan is added to Rx paid through PBMs, the cost of Rx is larger than inpatient, outpatient and professional services for some plans." (Segal Consulting)
[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), 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 submitted by the Board of Trustees of the WSOPE Pension Fund 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 WSOPE Pension Fund." (U.S. Department of the Treasury)
IRS Revises Procedures for Multiemployer Plan Benefit Suspensions (PDF)
" Revenue Procedure 2017-43 modifies the submission and notice requirements for suspension of benefits applications. Under the revised procedures, if the IRS identifies an error in the application after it is submitted, it will ask for additional materials to correct the error, instead of rejecting the application. The latest guidance also includes [additional] changes[.]" (Prudential)
[Opinion] New York State Teamsters' Pensions to Be Slashed Because of Unfair Law
"[T]he workers and retirees overwhelmingly voted against the cuts (71% of votes cast were against cuts; 29% votes were in favor of cuts). However, the way the vote was structured anybody who DIDN'T cast a ballot -- was counted as a yes vote. Because 60% of the ballots were not returned, this flipped the vote.... MPRA is a bad bill and the cut-back provisions, including these ridiculously unjust voting provisions, have to be repealed." (Pension Rights Center)
Kroger to Leave Central States Pension and Start New Plan
"Kroger Co.... intends to complete its withdrawal from the Central States, Southeast and Southwest Areas Pension Fund, likely on Sept. 16, and move some 2,100 active plan participants to a new traditional pension ... That date marks the expiration of Kroger's collective bargaining agreement with the Teamsters. The withdrawal from the fund is expected to be completed under terms of a new bargaining agreement reached between the company and union in March 2017." (Bloomberg BNA)
Treasury Approves New York State Teamsters Benefit Reductions
"The pension fund is the third multiemployer fund to receive approval for benefit reductions under the Kline-Miller Multiemployer Pension Reform Act of 2014, and the largest to date. As of Jan. 1, the plan was 37.8% funded, with $1.28 billion in assets and $3.39 billion in liabilities. While 9,788 participants voted against the plan and only 4,081 voted for it, another 20,767 did not vote, leaving only 28.26% of the total vote opposed. The law requires 50% to stop it." (Pensions & Investments)
[Official Guidance] Text of Treasury Department Letter Approving Benefit Reductions by New York State Teamsters Conference Pension and Retirement Fund (PDF)
"Because a majority or eligible voters did not vote to reject the benefit reduction, the benefit reduction may go into effect. Treasury, in consultation with DOL and PBGC, has issued a final authorization to reduce benefits under the Fund as described in the Application , effective October 1, 2017, subject to [certain] conditions[.]" (U.S. Department of the Treasury)
[Discussion] Withdrawal Liability Calculation: Use the Pool Method When Contribution History Incomplete?
"I handle the administration for a construction fund. It is my understanding that the IRS has required that a construction fund to use the Presumptive method to calculate withdrawal liability. This fund has never needed to do a withdrawal liability calculation until now. This method requires 20 years worth of contribution history for the Fund but the Administrator can only give me 11 years worth of information. Can we instead use the pool method because the information simply isn't available?" (BenefitsLink Message Boards)
[Official Guidance] PBGC to Provide Early Financial Assistance to Furniture Workers Multiemployer Pension Plan
"The early financial assistance from PBGC, together with benefit reductions that are required as a condition for receiving PBGC assistance, will help the plan to avoid insolvency and to pay benefits to participants.... Under the partition, PBGC provides early financial assistance by moving a portion of the plan's guaranteed benefit obligations to a new, separate plan that will have its costs reimbursed by PBGC." (Pension Benefit Guaranty Corporation [PBGC])
Participants Approve United Furniture Workers Pension Benefit Cuts
"The pension fund identified 9,595 participants and beneficiaries eligible to vote, and delivered ballots to 9,273 ... Of those, 21% voted to reject the suspension. While only 1,041 ballots were in favor of the reduction, the plan will take effect Sept. 1 because a majority of eligible voters receiving a ballot did not vote to reject it. It is the second MPRA approval and the first one to include a partition, which calls for the [PBGC] to provide financial assistance for a new successor pension plan to be overseen by the pension fund's trustees." (Pensions & Investments)
[Guidance Overview] 2017 Q&As: PBGC Meeting with ABA Joint Committee on Employee Benefits, May 10, 2017 (PDF)
13 pages. Topics include: [1] Regulatory review/reform developments: PBGC impact; [2] PBGC early warning program; [3] Multiemployer program update (including PBGC audits of plans terminating by mass withdrawal, and two-pool withdrawal liability method request for information); [4] PBGC informal assistance regarding merger and partitions; [5] Reportable events: recent PBGC experience; [6] Standard terminations: recent PBGC experience; [7] PBGC website project: Q&A presenting informal views; [8] PBGC premiums in the context of de-risking, and de-risking trends. (Joint Committee on Employee Benefits [JCEB], American Bar Association)
114 Multiemployer Pension Plans Projected to Fail Within 20 Years; More Than a Million Participants Could Lose Benefits (PDF)
"As many as 114 multiemployer pension plans covering nearly 1.3 million workers are underfunded by $36.4 billion and expect to become insolvent within the next 20 years because they do not have money to pay participants the full benefits earned.... All the failing multiemployer plans informed regulator s that they are in 'critical and declining' status in keeping with [MPRA].... They do not include those that have already failed, or those that shut down because all the employers withdrew. Nor do they include plans that are 'safe' or 'endangered' under the law." (Cheiron)
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)

Important word about authorship:
BenefitsLink® (BenefitsLink.com) provides this page for you, containing selected hypertext links to pages on the web that our editors think will be useful or interesting to you. But BenefitsLink is not the author or publisher of those linked pages (except as expressly indicated). You should contact directly the author of any such linked pages for copyright or other information about their contents.

Webmaster:
© 2017 BenefitsLink.com, Inc.
Privacy Policy
View Site in Mobile | Classic
Share by: