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Multiemployer plans

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[Guidance Overview] 2015 Reporting & Disclosure Calendar for Multiemployer Benefit Plans (PDF)
27 pages. Detailed list of compliance requirements and dates; covers DOL, HHS and IRS requirements for welfare plans as well as retirement plans. Interactive version is also available. (Segal Consulting)
[Guidance Overview] Noteworthy Developments of Interest to Sponsors of Multiemployer Retirement Plans (PDF)
Articles covering: [1] As plan sponsors embrace the idea of diversification, there has been a dramatic uptick in interest in hedge funds in a liquid (mutual fund) format; [2] The Society of Actuaries has released updated mortality tables reflecting a rise in life expectancy that may result in higher benefit obligations; [3] The key provisions of the Multiemployer Pension Reform Act of 2014 generally become effective for plan years beginning on or after January, 2015; and [4] A multiemployer DB plan currently in the PPA '06 green zone may not be 'green' for long if its obligations exceed its assets plus future contributions. (Segal Consulting)
Federal Spending Bill Brings Multiemployer Pension Changes in Through the Back Door
"[F]or employers participating in reasonably well funded plans (green zone), there should not be much that is needed. For the remainder (red zone or yellow zone) of plans, however, employers may need to weigh their options. They might consider doing some or all of the following: [1] Review all of their collective bargaining agreements that cause them to be participating sponsors of multiemployer plans.... [2] If withdrawal from the plan is an option, request a withdrawal liability calculation to see how painful that strategy might be. [3] Consider the pros and cons of remaining in the plan as part of the company's overall risk management strategy. [4] Consider engaging an independent actuary (not affiliated with the plan's actuary) to assist with any strategy decisions." (Benefits and Compensation with John Lowell)
[Guidance Overview] 'Cromnibus' Spending Bill Makes Significant Changes to Law Governing Multiemployer Pension Plans
"The new law makes clear that neither surcharges nor contribution increases required by funding improvement or rehabilitation plans are to be considered (i) to determine a withdrawing employer's allocable share of unfunded vested benefits or (ii) in calculating a withdrawing employer's payment amount. This provision does not apply to increases in contributions other than those required by a funding improvement or rehabilitation plan (for example, contribution increases to provide increased benefits). These changes go into effect for contribution rate increases required during plan years beginning after December 31, 2014." (Littler)
[Guidance Overview] Multiemployer Pension Plan Reform: So Now What?
"The idea behind the 'Multiemployer Pension Reform Act of 2014' is that by making certain changes to multiemployer pension plans, and specifically to underfunded pension plans, PBGC finances will improve. Of course the first part of this repair is that the annual PBGC insurance premiums for multiemployer plans will double to $26 per participant in 2015, and increase over time." (Fox Rothschild LLP)
[Guidance Overview] Employers Should Prepare Now for Big Changes Coming to Multiemployer Pension Plans
"[E]mployers who have collective bargaining agreements that require contributions to multiemployer pension funds should begin analyzing the potential impact now ... Review the current funded status of each multiemployer pension fund. Request an updated withdrawal liability estimate from each multiemployer pension fund and all supporting documentation ... Consider making inquiries through the fund's employer trustees as to whether the fund will implement any of the changes under the Act.... Review any public statements that union representatives have made regarding the changes under the Act, whether in support of or against such changes.... Re-evaluate the company's risks of continuing to participate in the fund and adjust collective bargaining strategy accordingly." (Polsinelli PC)
[Opinion] Big Business Promoted Private Pensions to Crush Unions
"[T]he long, tangled history of U.S. private pensions is equally a story of how business sought to manage labor, conserve profits and block the expansion of a modern welfare state. Research by historians such as Jennifer Klein and Steven Sass helps explain why the U.S. is almost unique in its reliance on private, company-sponsored pensions instead of comprehensive, government-sponsored benefits." (Bloomberg View)
[Opinion] Multiemployer Pension Plan Reforms: Lessons from the Lame-Duck Session (PDF)
"While Solutions Not Bailouts drew loud opposition, no alternatives to address this problem, other than involving a bailout funded by taxpayers -- a political fantasy -- were presented as alternatives. There is a reason for this: if there were an easier way to save failing pensions, those concerned about the fate of these plans would have embraced it. Pretending something can be fixed less painfully later is not a plan, it's denial. After three years, several congressional hearings and many public events on Solutions Not Bailouts, no serious alternative plans emerged -- a clear indication there were no easy or painless ways to tackle this problem." (Earl Pomeroy, via American Benefits Council)
[Guidance Overview] Overview of the Multiemployer Pension Reform Act of 2014 (PDF)
8 pages. "Significant changes the Act makes include the following: [1] Repeals the sunset provisions of the Pension Protection Act of 2006; ... [2] Limits the effect that future required contribution increases will have on employer withdrawal liability; [3] Adds to the list of documents that a plan is required to provide to participants, beneficiaries, unions or employers upon request; [4] Increases PBGC premiums to be paid by multiemployer pension plans; ... [5] Modifies rules regarding mergers of plans and partitioning of plans by the PBGC; [6] Adds a new zone status for seriously underfunded plans called 'Critical and Declining' and allows a plan in that status to cut some previously protected benefits; [7] Extends PBGC guarantees to some pre-retirement death benefits." (Dexter Hofing LLC)
[Guidance Overview] Multiemployer Pension Reform Bill Passed by Congress, Obama Expected to Sign
"MEPRA reflects many of the recommendations included in Solutions not Bailouts, the Report issued by the Retirement Security Review Commission of the National Coordinating Committee for Multiemployer Plans [NCCMP]. The one receiving the most attention is the provision that gives trustees of deeply troubled plans the ability to help their plans avoid insolvency by reducing some benefits (including benefits in pay status), subject to various safeguards and requirements. This Bulletin briefly describes the key provisions of MEPRA, which generally become effective for plan years beginning on or after January 1, 2015." (Segal Consulting)
[Guidance Overview] Congress Passes Multiemployer Pension Reform (PDF)
"The Act permanently extends the Pension Protection Act of 2006 (PPA) multiemployer plan critical and endangered status funding rules that had been scheduled to sunset at the end of 2014. It also includes a series of technical corrections and enhancements to the PPA funding rules, including significant new reforms that allow the trustees of multiemployer plans facing insolvency to apply to the [PBGC] for a suspension of benefits. In addition, the Act gives the PBGC greater flexibility in facilitating plan mergers and approving plan partitions. [In this article, the authors] provide an overview of each of these provisions, and address key questions regarding the relief made available by the Act." (Groom Law Group)
[Guidance Overview] What the Cromnibus Law Means for Multiemployer Pension Plans
"The PBGC is given the clear authority to promote and facilitate the merger of two or more multiemployer pension plans if the action is in the interests of participants and beneficiaries of at least one of the plans and not detrimental to any of the participants and beneficiaries involved.... [T]he PBGC is given the authority to order and finance a plan partition if a plan is in critical and declining status and has taken all reasonable measures to avoid insolvency and the PBGC expects that a partition will keep the plan solvent." (International Foundation of Employee Benefit Plans [IFEBP])
[Opinion] Four Ways Congress Just Screwed Up Pensions
"[P]lan trustees have substantial discretion about how to allocate the cuts ... Retirees who are harmed cannot challenge the trustees' actions in court, even if those actions are arbitrary and capricious, or contrary to the interests of plan participants ... That's because this new congressional measure exempts the trustees from being fiduciaries when deciding whose benefits get cut, so retirees can't sue under the normal fiduciary claims. Oh, and there is no provision for automatic restoration of lost benefits if a plan's funding status improves." (The Huffington Post)
[Opinion] Multiemployer Pension Cuts: Reasons Why
"The multiemployer plan pension-cut bill about to be enacted makes sense if you consider: Employers in these plans, who are the source of its funding, have almost no say after they sign up.... Funding rules, though stricter than government plans, still allow for discretion in selecting assumptions ... [T]he cost of withdrawal may dwarf what [the employer] had been paying for what they believed was the cost of benefits for their employees.... Fund employees, lawyers, actuaries, accountants, and investment advisers take money directly out of these plans that would be curbed with a [PBGC] takeover." (Burypensions)
Bill to Let Multiemployer Pensions Cut Benefits Passes
"Severely distressed multiemployer pensions will be able to reduce benefits paid to retirees under an amendment to the omnibus spending bill approved by the U.S. Senate on Dec. 13, two days after House passage. The bill now goes to the White House for an expected presidential signature." (Society for Human Resource Management [SHRM])
Proposed Multiemployer Pension Reform: Don't Count Your Chickens Before They Pass
"[M]ost relevant to employers, the new rules clarify that surcharges imposed pursuant to the Pension Protection Act do not count towards calculation of withdrawal liability payments as the 'highest contribution rate' against which annual payment limits are calculated. This has been arbitrated and litigated for some time and it would serve in many instances to reduce withdrawal liability payments.... [But] laws do not become laws simply because the House passed them. There is has already been heavy anti-reform commentary coming from organized labor and Democrats in the Senate." (Fox Rothschild LLP)
[Opinion] Washington's Pension Non-Bailout
"The big reform breakthrough is that pension plans deemed 'critical' or 'declining' ... could petition the Treasury to cut benefits to up to 110% of the PBGC guarantee.... The reform would also make permanent the 2006 Pension Protection Act's rules that allow insolvent plans to reduce 'adjustable' benefits (e.g., early and disability payouts). Insurance premiums would immediately double to $26 per participant, and the PBGC would have to propose a plan for paying benefits through 2035. This may be a bow to the reality that the multi-employer pension model can't be sustained in the long-term and should be phased out. We're told that next year the House Ways and Means Committee will consider how to facilitate the transition to hybrid plans involving 401(k)s." (The Wall Street Journal; subscription may be required)
[Opinion] Did Congress Just Nuke Pensions?
"[T]here is no question that these multi-employer plans were poorly managed and were in desperate need of reforms. The problem is that instead of implementing more sensible reforms to try to bolster these plans or try saving them -- like maybe have the state public pension funds manage them -- Congress took out the guillotine and chopped them, effectively spreading the message that the pension promise is worthless." (Pension Pulse)
[Opinion] Congress' No-Bailout Pension Plan Is No Solution for Retirees
"The $1.1 trillion omnibus spending bill moving through Congress this week adopts 'Solutions Not Bailouts,' a plan to shore up struggling multiemployer pension funds -- traditional defined benefit plans jointly funded by groups of employers in industries like construction, trucking, mining and food retailing. A bailout, it is not. The centerpiece is a provision that would open the door to cutting current beneficiaries' benefits, a retirement policy taboo and a potential disaster for retirees on fixed incomes." (Mark Miller, for Reuters)
Summary of the Pension Cutback Provisions in the Kline-Miller Amendment
"In some cases, the cuts could exceed 60% of a participant's benefits.... The cuts are made by plan trustees, who are typically more aligned with active workers and contributing employers, than with retirees.... Even if all participants vote against cuts, the Treasury Department can override the vote and uphold the trustees' decision to make cuts, if it concludes that a plan poses a 'systemic' risk to the [PBGC].... The insurance premiums that multiemployer plans pay to the PBGC are increased from $13 to $26 per participant per year." (Pension Rights Center)
[Opinion] Senate Finance Committee Chairman Criticizes House Proposal on Multiemployer Pensions
"[T]he last-minute scheme was rushed through by a few House members in private during the final days of the legislative year without consideration by the Senate Finance Committee and other committees of jurisdiction. That flawed process has produced a lopsided solution leaving existing retirees to shoulder a disproportionate share of sacrifice. It also will result in the rolling back of a major tenet enshrined in pension law -- never take away money a pensioner has already earned." (U.S. Senate Committee on Finance)
Comprehensive Multiemployer Pension Reform Now in Play
"Much of the draft legislation is based on recommendations previously issued by the National Coordinating Committee for Multiemployer Plans [NCCMP]. The bill is designed to make it easier for multiemployer pension plans to take steps to improve their health without necessarily placing significant additional financial burdens on participating employers or taxpayers.... [Key] highlights of interest for employers: [1] Ability of deeply troubled plans to reduce benefits before insolvency.... [2] Changes to mergers and partitions.... [3] Employer relief on withdrawal liability payments." (Seyfarth Shaw LLP)
[Opinion] Statement of Sen. Tom Harkin on Multiemployer Pension Cuts Proposed by the House of Representatives
"Unfortunately, the approach put forth by the House ... is not balanced and fails to fix the multiemployer system. It is focused almost purely on cutting retiree benefits. More than one million people could see their pensions cut. Meanwhile, it leaves PBGC woefully underfunded, pushing out insolvency by just two years. The approach fails to include any of the proposals to allow innovative, hybrid plan designs for the future." (Senator Tom Harkin (IA))
Is Congress About to Cut Your Pension?
"The 31 million people in so-called single employer plans wouldn't be affected by the bill. The bigger fear is about the 10 million workers and retirees in pooled plans.Ten to 15 percent of those workers are in plans that may need to make cuts.... A retiree with a pension of $24,000 per year and 25 years of service could see his or her annual benefit cut in half, according to the Pension Rights Center." (Bloomberg)
Fact Sheet: Bipartisan Multiemployer Pension Reform Agreement (PDF)
"The proposed reform was initially developed by the National Coordinating Committee for Multiemployer Plans [NCCMP].... The bipartisan agreement would provide the critical flexibility necessary to keep pension plans from going under and causing workers to lose everything. The proposal includes reforms to protect taxpayers and provide trustees with new tools to save troubled plans. It also includes important consumer safeguards to give participants in these plans a voice and to protect the most vulnerable retirees." (U.S. House of Representatives)
Text of Proposed Multiemployer Pension Reform Act of 2014 (PDF)
161 pages; as introduced by Reps. Kline (MN) and Miller (GA). Summary provided by the House Committee on Rules: "Addresses pension reforms in two areas. First, the bipartisan pension reforms in Division O will permit trustees of severely underfunded plans to adjust vested benefits, enabling deeply troubled plans to survive without a federal bailout; require approval by plan participants of any proposed benefit adjustments that take effect, with a fail-safe mechanism for those plans that present a systemic risk the multiemployer pension system; provide participant protections to safeguard the most vulnerable retirees, including disabled retirees and individuals age 75 and older; give the [PBGC] the authority to take earlier action to help save failing plans, thereby reducing potential future costs; and adjust the premium structure in order to place the PBGC on more firm financial ground. Second, the bipartisan amendments in Division P amend the rules relating to PBGC enforcement and the rules governing certain charity and nonprofit pension plans. Also provides for the budgetary treatment of these divisions." (U.S. House of Representatives)
Text of CBO Cost Estimate for the Proposed Multiemployer Pension Reform Act of 2014 (PDF)
"As posted on the website of the House Committee on Rules on December 9, 2014 (Proposed as Division O in an amendment to H.R. 83, the Consolidated and Further Continuing Appropriations Act, 2015)." (Congressional Budget Office [CBO])
Congressional Leaders Hammer Out Deal to Allow Pension Plans to Cut Retiree Benefits
"The measure, which would be attached to a must-pass spending bill in the coming days, would alter 40 years of federal law and could affect millions of workers ... Some see cutting benefits preemptively as the only way to keep troubled plans such as Central States afloat. Under the agreement reached by congressional negotiators, retirees over age 75 as well as those who are disabled would be shielded from any reductions. Also, any benefit cuts would be subject to a vote of plan participants." (The Washington Post; subscription may be required)
Pension Crisis Hits Central States, Chicago-Area Union Funds
"The problem for all multiemployer plans across the country is that a Central States insolvency will swamp PBGC, causing it to go bankrupt, too.... Even with $17.77 billion in assets, Central States largely is unsustainable because deregulation of the trucking industry in 1980 has wiped out all but two of the 50 biggest contributors to the plan. Today it's paying out $4 for each dollar it collects from employers[.]" (Crain's Chicago Business)
[Opinion] The Lame-Duck Congress Plots to Undermine Retiree Pensions
"Members of the House Education and the Workforce Committee are trying to slip the measure into an omnibus spending bill to be passed before Dec. 11, when Congress leaves Washington for its vacation recess. Pension advocates are up in arms, not least because the measure's actual language hasn't been made public.... [The] proposal [would] to allow plan trustees to cut retirees' pensions now, many years in advance of any looming insolvency. The benefit cut could be no lower than 110% of the PBGC guarantee, or about $14,150 for that 30-year worker this year. This would mean gutting the fundamental principle underlying the federal ERISA law governing private sector pensions." (Los Angeles Times)
[Official Guidance] Text of IRS Announcement 2014-41: Extension of Time for Certain Defined Benefit Plan Determination Letter Requests (PDF)
"This announcement extends to June 30, 2015, the deadline for submitting on-cycle applications for opinion and advisory letters for pre-approved defined benefit plans for the plans' second six-year remedial amendment cycle. This announcement also provides a two day extension (from Saturday, January 31, 2015, to Monday, February 2, 2015) for Cycle D on-cycle submissions (primarily individually designed plans including multiemployer plans).... The IRS expects to modify Rev. Proc. 2011-49 to expand the preapproved program to include defined benefit plans containing cash balance features and defined contribution plans containing employee stock ownership plan (ESOP) features. In addition, the IRS is developing tools, which will be available before June 30, 2015, to assist plan sponsors in drafting these plans." (Internal Revenue Service [IRS])
House Votes to Extend Multiemployer Pension Provisions
"Provisions in the House bill would extend multiemployer pension plans' ability to take an additional five years to amortize funding shortfalls in addition to a regular 15-year period, and extend through 2015 special rules for underfunded plans." (Pensions & Investments)
Congress Could Soon Allow Multiemployer Pension Plans to Cut Benefits for Current Retirees
"In recent weeks, negotiations over the proposal have heated up on Capitol Hill. Still, some key elements are unresolved, including a way to satisfy objections from United Parcel Service, which withdrew from one of the most distressed plans in 2007 but would be on the hook to make up for any pension cuts affecting its retirees. If those details can be ironed out, congressional aides said an agreement is possible before the current session of Congress ends this month." (The Washington Post; subscription may be required)
[Opinion] Pension Rights Center Letter to Members of Congress Urging Opposition to Proposed Multiemployer Plan Changes (PDF)
"While the Pension Rights Center believes that action should be taken to help these plans continue, there is ample time for Congress to develop solutions that are sensible and fair. In the waning days of the 113rd Congress, we urge you not to rush to support the ill-conceived proposal put forth by the National Coordinating Committee for Multiemployer Plans, which would allow trustees to cut retirees' benefits.... It is unfair to allow multiemployer plans to balance their books on the backs of those who have everything to lose and nothing to gain from this proposal. (Pension Rights Center)
[Guidance Overview] Notes from Intersector Meeting With PBGC, October 15, 2014 (PDF)
7 pages. Topics discussed include: [1] Update from PBGC; [2] Post termination audit; [3] Premium increase; [4] Multiemployer system; [5] Single and multiemployer benefit guarantee; [6] Actuarial assumptions review; [7] Proposed RP-2014/MP-2014 mortality table; [8] Risk-transfer data; [9] HATFA guidance. Also includes PBGC handout: Draft Risk-Transfer Questions for 2015 Premium Filings. (American Academy of Actuaries, Society of Actuaries, Conference of Consulting Actuaries, and ASPPA College of Pension Actuaries)
Multiemployer Plans Show Resiliency
"The median investment return for multiemployer DB plans for calendar year 2008 was -23.5%, due to the market collapse. The median annualized return over the ten-year period from January 1, 2003 through December 31, 2012 was 5.9%. At the end of 2012, the median DB funded percentage was 77.8% on a market value of assets basis. This is a significant improvement over the median funded percentage at the end of 2008, which was 67.4%, but still short of the 88.6% median funded percentage at the beginning of 2008." (International Foundation of Employee Benefit Plans [IFEBP])
Japanese Acquirer Resolves Pension-Related Liabilities of U.S. Subsidiary After Court Finds Jurisdiction
"The Asahi district court determined that Asahi had directed its activities at the United States by acquiring Metaldyne with prior knowledge of the pension liability issues, and that this was sufficient to establish personal jurisdiction over Asahi. The district court highlighted the fact that Asahi had hired a U.S. company to conduct due diligence on Metaldyne for the specific purpose of identifying Metaldyne's pension plan obligations,... Even if personal jurisdiction is found and controlled group liability is applied to a non-U.S. defendant, the PBGC may have difficulty collecting a judgment against the non-U.S. corporation if it has no assets in the United States other than a U.S.-based subsidiary that has filed for bankruptcy." [PBGC v. Asahi Tec Corp., No. 10-1936 (D.D.C. Oct. 4, 2013)] (Skadden, Arps, Slate, Meagher & Flom LLP)
Withdrawal Liability Claims: What Employers Should Do to Protect Their Interests
"This Update provides a brief overview of the key procedural issues in an employer's response to an assessment of withdrawal liability from a multiemployer pension plan under [ERISA].... [1] Responding to an assessment of withdrawal liability... [2] Preparing to challenge the assessment... [3] Request for review of the assessment... [4] Initiating arbitration." (Practical Law Company)
Text of Federal District Court Opinion: Sole Owner of Business Could Be Personally Liable for Multiemployer Plan Withdrawal Liability (PDF)
"A close review of the Seventh Circuit cases noted above indicates that a more helpful recitation of the rule would proceed as follows: Where an individual [1] owns the property on which a withdrawing employer conducts its operations, [2] leases the property to the withdrawing employer, and [3] owns the withdrawing employer, then that individual is personally liable for the payment of withdrawal liability incurred by the withdrawing employer. In sum, if an individual engages in a trade or business under common control with the withdrawing employer by leasing his property to the withdrawing employer, he is personally liable for payment of withdrawal liability." [Board of Trustees of the Automobile Mechanics' Local No. 701 Union And Industry Welfare Fund and Board of Trustees of the Automobile Mechanics' Local No. 701 Union And Industry Pension Fund v. Beland & Wiegers Enterprises, Inc., No. 13-CV-1611 (N.D. Ill. Oct. 29, 2014) (U.S. District Court for the Northern District of Illinois)
Underfunded Multiemployer Pension Plans: A Proposal to Spread the Pain
"A small, but significant, number of multiemployer pension plans face insolvency in the next 20 years -- despite actions to reduce benefits and raise contributions. To avoid insolvency, a Commission with representatives from plans, employers, and unions has proposed allowing plans to cut accrued benefits of current workers and retirees. Critics are concerned that such a tool is unnecessary and would unfairly hurt plan participants, particularly retirees. [The authors'] analysis of one large plan suggests that the proposal would improve overall participant welfare, but leave the plan operating largely on a pay-as-you-go basis. Thus, before approving the use of such a tool, regulators should have access to detailed plan data to ensure not only solvency, but also a reasonable level of funding." (Center for Retirement Research at Boston College)
Shades of Green: Key Questions for Multiemployer Plans to Ask About Being in the Green Zone
"[B]ecause being in the green zone on a particular measurement date just means not being in the red zone (critical status) or the yellow zone (endangered status), it is not a measure of a plan's long-term financial well-being. In essence, there are many shades of green. The variance in hue only emerges as additional projections of the zone criteria are performed. Understanding shades of green is an important part of plan stewardship. An increasingly positive trend indicates a continuously stable, and perhaps improving, financial condition. A downward trend may signal a need for preemptive board action, particularly when a more modest present action mitigates the likelihood of more drastic future actions." (Segal Consulting)
[Official Guidance] Text of PBGC Submission of Information Collection Request to OMB; Request for Public Comments on Proposed Changes to Schedules MB and SB of Form 5500
"Based on a recommendation made by practitioners, PBGC is proposing to modify the Schedule MB to require plan administrators of all multiemployer plans to report on line 4 the funded percentage for monitoring the plan's status. Currently, only plan administrators of multiemployer plans in critical or endangered status are required to report this information ... The Schedule MB and instructions would also be modified to add a new question in line 8b that would require large multiemployer plans (500 or more total participants as of the valuation date) to provide in an attachment a projection of expected benefit payments to be paid for the entire plan (not including expected expenses) for each of the next ten plan years starting with the plan year to which the filing relate ... PBGC is proposing to modify the Schedule SB instructions to simplify the alternative age/service scatters that cash balance plans with 1,000 or more active participants have an option to report on an attachment to line 26." (Pension Benefit Guaranty Corporation [PBGC])
[Guidance Overview] IRS Issues Final Hybrid Plan Regs with Variable Annuity Pension Plan Implications (PDF)
"On September 19, 2014, the [IRS] published final regulations providing guidance on hybrid pension plans that includes some items of interest to multiemployer pension plan trustees. Although mainly focused on cash balance and pension equity plans, the guidance includes provisions related to variable annuity pension plans (VAPPs), which have been drawing attention among trustees who believe there is enormous value in the defined benefit system. Some of the more onerous provisions needed to satisfy hybrid plan rules are now explicitly removed for VAPPs, and trustees adopting VAPPs have been given more flexibility in plan design." (Milliman)
An Analysis of Multiemployer Pension Plans: Beyond the Numbers
"The [DOL] has two programs that track information about retirement benefits. [EBSA] tabulates data from the Form 5500 series, an annual mandatory reporting of certain retirement plan details. The Bureau of Labor Statistics (BLS) explores the features of retirement plans through its annual National Compensation Survey (NCS), a voluntary survey of employers yielding information on the coverage, cost, and provisions of various components of compensation, such as wages, health insurance, and retirement plans. This [article] uses data from both sources to look at trends in multiemployer defined-benefit plan coverage. This article also focuses on certain plan features, including some of the unique characteristics of defined-benefit plans designed to support employees who have multiple jobs throughout their career." (U.S. Bureau of Labor Statistics [BLS])
ERISA at 40: Anti-Cutback Rule Comes into Spotlight (PDF)
"Under [a recent] proposal, [troubled multiemployer] plans would be permitted to suspend participant benefits -- including the benefits of those in pay status.... [T]he proposal provides a relief valve that may help to avoid employer and PBGC insurance program insolvency. The proposal might also make multiemployer plans somewhat more attractive for employers to sponsor. For the PBGC, the proposal would require the agency to devote significant resources to developing in-house expertise to review the fairness of benefit suspensions." (Buck Consultants at Xerox)
2014 Multiemployer Pension Funding Study (PDF)
"[T]he overall funding shortfall for all plans declined by $45 billion for the year ending December 31, 2013, and the aggregate funded percentage increased by 9% from 72% to 81%.... [T]he median multiemployer funded percentage of 86% as of December 31, 2013, has nearly recovered to its pre-crash level of 89%. However, it also shows that the proportion of plans that are under 80% funded has increased from 29% to 37%." (Milliman)
[Guidance Overview] The New ASOP 27: What Is the Impact on Multiemployer Plan Funding? (PDF)
"Economic assumptions covered by ASOP 27 include the investment return, discount rate, inflation, postemployment benefit increases, compensation increases, and any other related assumptions. The general process that must be followed by the actuary in developing economic assumptions is: (a) identify the components of the assumption, (b) evaluate the relevant data, (c) consider factors specific to the measurement and other general factors, and (d) select a reasonable assumption. Relevant data could include both recent and long-term historical data, but undue weight is not to be given to recent experience. Adjustments may be made to allow for the chance of an adverse deviation or if there are plan provisions that are hard to value." (Milliman)
A Legacy of Pensions: An Interview with Former PBGC Director Josh Gotbaum (PDF)
"[We] have accomplished a lot, but we have yet to have congressional legislation to enable multiemployer plans to save themselves, we have yet to have a consensus on what changes in ERISA would facilitate retirement security for the next forty years, and so there is much that is not yet done." (American Benefits Council)
[Guidance Overview] IRS Draft Instructions on ACA Reporting Help Clarify Requirements for Multiemployer Plans
"[T]he multiemployer plan will report the actual months that the employee was covered under the plan on Form 1095-B, [which] the multiemployer plan (as a provider of minimum essential coverage) must give to its plan participants and file with the IRS.... One of the biggest challenges may be collecting Social Security numbers for covered dependents ... Plan administrators that have not previously requested these numbers should request them twice before the end of 2014 (e.g., once during open enrollment, if any, and once before December 31, 2014) in order to be treated as making a reasonable attempt to collect them." (Segal Consulting)
Does Your Health Plan Span the Generations? (PDF)
"Balancing the needs of all members at all career phases will require plan trustees and sponsors to innovate and seek creative plan designs in order to ensure that members receive competitive benefits during their working careers and can retire with dignity. This article offers suggestions for trustees who are struggling to balance the current needs of their active members with the needs of those approaching retirement." (Benefits Magazine, published by the International Foundation of Employee Benefit Plans [IFEBP])
Bankruptcy Judge: Trump Entertainment Can't Stop Funding Union Pension Plan
"Eliminating just the pension from the collective bargaining agreement would violate the bankruptcy code, which requires a contract to be considered as a whole, [U.S. Bankruptcy Court Judge Kevin Gross] said. 'The court does not have authority to reject a portion of a CBA,' Mr. Gross said.... The company ... said in court filings that the union contract costs about $15 million a year in health, welfare and other benefits and $5 million in pension payments." (Pensions & Investments)
Can the PBGC Save Multiemployer Plans?
"[T]he PBGC's insurance fund for multiemployer plans is projected to be exhausted within the next 10 years. One idea is to head off plan insolvencies through 'partitions' that transfer some costs to the PBGC, but little support exists for hiking premiums to cover the costs. The bottom line is that the PBGC, as currently structured, will not be able to stave off plan insolvencies or fully protect workers in plans that become insolvent." (Center for Retirement Research at Boston College)
The Effect of Employer Bankruptcy on Retiree Benefits, with Applications to the Automotive and Coal Industries (PDF)
"Benefits for retired employees are of particular interest to policy makers because of the growing number of retirees and forecasts indicating that some future retirees may not have the necessary financial resources to maintain their standards of living. Part of this congressional concern is what happens when bankrupt employers are unable to provide promised pension and health benefits to their retired employees.... After a discussion of these issues, this report provides three examples of bankruptcy proceedings where the retirees' pensions and health insurance benefits received substantial federal attention: the General Motors Corporation, the Delphi Corporation, and the Patriot Coal Corporation." (Congressional Research Service [CRS])
Countdown to the Second Cycle D Filing Deadline
"Trustees of all multiemployer pension and annuity plans have until January 31, 2015 to submit to the [IRS] their Cycle D determination letter requests for the second five-year staggered determination letter cycle. These requests cover required and discretionary plan amendments for and since the Heroes Earnings Assistance and Relief Tax Act of 2008 (HEART Act). This deadline applies even to those 'off-calendar-year' plans that filed in Cycle E last time." (Segal Consulting)
Multiemployer Benefit Plans: Implementing a Written Policy for Collection of Employer Contributions
"Multiemployer employee benefit plans have unique issues when it comes to employer contributions. In addition to the high number of different employers that may participate in a plan, employers often contribute at different rates, perhaps for different classes of employees, all according to Collective Bargaining Agreements that have different effective dates. These unique issues call for a specific written collection policy." (Bond Beebe Accountants & Advisors)
Underfunded Union Pension Funds Cannot Take Money from Traveling Workers (PDF)
"The U.S. District Court for the Western District of Washington has held that underfunded union pension plans cannot fund their rehabilitation Plan by withholding funds from traveling workers.... The case has a wide impact to traveling workers who perform work in the jurisdiction of multiemployer plans that are in rehabilitation. So far this year, more than 100 multiemployer union pension plans have filed 'Critical' or 'Endangered' status notices with the DOL. If such funds have withheld reciprocity contributions from traveling union members, [those] union members may be entitled to have such contributions, and the earnings thereon, transferred to their Home Fund. As a consequence, the traveling worker will receive an increased pension benefit from his Home Fund." [Lehman v. Nelson et al., No. C13-1835RSM (W.D. Wash. Sept. 11, 2014)] (Davis Wright Tremaine LLP)
A Review of ERISA Litigation in 2014
"This advisory summarizes a selection of the 2014 decisions ... and the key lessons ... including: [1] Union travelers entitled to wrongfully withheld reciprocity pension contributions; [2] TPA engages in prohibited self-dealing by concealing fees; [3] Church plans should proceed with caution unless established and created directly by a church; [4] Employers have no cause of action against multiemployer trustees for negligent plan management; [5] U.S. Supreme Court rejects Moench presumption, adopts plausibility standard; [6] Include contractual time limit in denial of benefits; and [7] Once-per-year IRA rule to be applied on aggregate basis[.]" (Davis Wright Tremaine LLP)
Taft-Hartley Trustees: Traveling Outside State Lines Requires Staying in Line with the IRS Travel Expense Reimbursement Rules
"Under the actual expense method, there must be records to evidence the actual cost of travel expenses.... As an alternative to the actual expense method, the IRS standard rates can be used for meals and incidentals. The only documentation required under this method is proof of time, place, and business purpose of the travel.... Expense reimbursements for the departure and return days must be prorated under the standard meal allowance method by one of two methods." (Belfint Lyons & Shuman, CPAs)
CBO Cost Estimate for S. 2511, a Bill to Amend ERISA to Clarify the PBGC Definition of Substantial Cessation of Operations
"CBO estimates that S. 2511 would reduce the contributions that plan sponsors are required to make to their plans as a result of terminating operations, leading to increases in revenues and decreases in direct spending (including the effects on offsetting receipts, which are recorded as an offset to direct spending). CBO estimates that enacting S. 2511 would, on net, decrease direct spending by $15 million over the 2015-2024 period. The staff of the Joint Committee on Taxation (JCT) estimates that enacting the bill would increase revenues by $14 million over the 2015-2024 period. In total, CBO and JCT estimate that enacting S. 2511 would reduce deficits by $29 million over the 2015-2024 period." (Congressional Budget Office [CBO])
[Guidance Overview] Section 4062(E) Liability in Transition: Planning for an Uncertain Future (PDF)
10 pages. "Both the PBGC moratorium and the HELP Committee's action, which follow a number of noteworthy 4062(e) developments over the past eight years, appear to reflect an increasing momentum for reform. These two key developments highlight the importance of the need for awareness of -- and effective planning regarding -- potential 4062(e) issues in a regulatory and legislative environment that could change significantly in the near-term -- whether as a result of policy or regulatory changes within PBGC or as a result of the enactment of reform legislation, or some combination of both." (Keightley & Ashner LLP, via Bloomberg BNA Pension & Benefits Daily)

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