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Benefits in the News > By Subject >

Multiemployer plans


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Unions Swim Against the Tide as Pension Tsunami Looms (PDF)
"Especially if the current [NLRB] moves forward with its initiatives to abbreviate severely the length of time from notice of an election petition to the date of employee voting, unorganized employers should be armed as early as possible with reliable information about 'union' defined benefit pension plans for their own decision-making and to share with employees. Similarly, employers entering a new round of collective bargaining should prepare by learning the basics of contributions relative to benefit value and business risk." (Epstein Becker Green, via Insurance Advocate)
Multiemployer Trustee Selection and Orientation: 2014 Survey Results
[Infographic] "Of the 230 fund representatives that completed the survey, nearly 60% believe that it is more challenging to be a trustee today, as compared to decades ago due to personal liability, fiduciary liability, finding a work-life balance and constantly changing regulations. The majority also find that it is more difficult today to recruit both labor and management trustees, and that it takes between three and five years to develop a competent trustee." [The full survey results are online.\ (International Foundation of Employee Benefit Plans [IFEBP])
Noteworthy Developments of Interest to Sponsors of Multiemployer Retirement Plans, Third Quarter 2014 (PDF)
"[T]he percentage of calendar-year multiemployer pension plans in the 'green zone' is 65 percent, up from 61 percent in 2013.... The percentage of plans in the yellow zone is 8 percent, down from 11 percent in 2013. The percentage in the red zone is 27 percent, down from 28 percent last year. The average PPA '06 funded percentage as of January 1, 2014, is 88 percent, up from 85 percent in 2013." (Segal Consulting)
Top IRS Trouble Spots for Multiemployer Retirement Plan Qualification, and What Trustees Can Do About Them
"[1] Erroneous Benefit Calculations ... [2] Conflicting Plan Documentation ... [3] Missing or Inadequate Participation Agreements ... [4] Benefits Not Adjusted for Late Payment ... [5] Inadequate Suspension Procedures ... [6] Late Required Distributions." (Segal Consulting)
How to Build an Effective Pension Board
"Pension board selection usually centers on getting representation across several groups. Even so, boards often fail to include an array of people who could help foster better management.... a pension board is more effective when its personnel has a diversity of opinion, because such a group fosters debate -- and a range of potential asset management strategies." (Institutional Investor)
Teamsters Rank-and-File Dig In Against Possible Pension Benefit Cuts
"Teamsters retirees from the trucking industry currently enjoy some of the most generous pensions in America -- up to $3,500 a month for 30 years of service from any unionized trucking company that contributed to multiemployer pension plans that once covered the industry like a warm fuzzy financial security blanket. But those pension plans, once thought to be the 'Cadillac' of all retirement plans, are in deep financial trouble.... The issue is acute because the Pension Protection Act of 2006, which prohibits any benefit cuts in troubled pension plans, is due to sunset at the end of this year." (Logistics Management)
PBGC Issues Dire Warning on Multiemployer Plans
"More than a million people risk losing their federally insured pensions in just a few years ... [Multiemployer] pensions were long considered exceptionally safe, but the [PBGC] reported that some plans are now in their death throes and could not recover.... Bailing out those plans seems highly unlikely. But if they are simply left to die, the collapse of the federal insurance program is all but inevitable... The agency does such a projection every year, but this year's version was unusually late and unusually dire." (The New York Times; subscription may be required)
[Guidance Overview] PBGC Simplifies Certain Multiemployer Notice and Valuation Requirements
"[A] compliance determination provides valuable protection from some problematic issues that could arise in a merger. If, however, the trustees ... determine that such protection is not needed, the merger could be executed on a faster timetable. On the other hand, there might be no need to forego the protection of a compliance determination because it appears that, under the new rules, plans that request a compliance determination also may continue to request a waiver of the 120-day period if need be." (Segal Consulting)
Sun Capital Decision Threatens Lenders with Controlled Group Liability (PDF)
"Earlier this year, Sun Capital was cited by a multiemployer plan seeking to hold a lender jointly and severally liable for the employer's withdrawal liability s a member of the employer's controlled group. Lenders need to be alert to circumstances that may give rise to such potential controlled group claims, which have been brought both by multiemployer pension plans and by the [PBGC].... Lenders should always be wary of loans to companies that sponsor defined benefit pension plans or that contribute to multiemployer plans." (McGuireWoods LLP, in The Banking Law Journal)
A Surcharge Is Not a Contribution -- At Least Not for Withdrawal Liability
"The [district court] judge reasoned that while the term 'contribution rate' is undefined in ERISA, there is a definition of 'obligation to contribute' that is directly tied to a collective bargaining agreement. The court found that since the surcharge was not part of collective bargaining, and although required under ERISA (through the PPA), it would not be an actual 'contribution.' Based on this decision, it looks like an employer would have the ability to ask the plan to revise its calculation under a Section 4219 request for review." [Bd. of Trustees of the IBT Local 863 Pension Fund v. C&S Wholesale Grocers, Inc., No. 12-7823 (D.N.J. Mar. 19, 2014)] (Fox Rothschild LLP)
Annual Withdrawal Liability Payments Calculated at Highest Contribution Rate for All Groups, Excludes Surcharge
"The district court first held that ERISA's use of 'highest contribution rate' unambiguously means the highest rate at which the employer was required to contribute to the plan rather than a blended rate to reflect a range of contribution rates.... The court rejected, however, the fund's determination to also include the 10 percent surcharge in calculating Woodbridge's annual withdrawal liability payment. The court reasoned that the obligation to contribute for the 10 percent surcharge arose under ERISA, not under the CBAs or applicable labor-management law. Thus, the surcharge did not constitute an 'obligation to contribute' as defined by ERISA." [Bd. of Trustees of the IBT Local 863 Pension Fund v. C&S Wholesale Grocers, Inc., No. 12-7823 (D.N.J. Mar. 19, 2014)] (Hodgson Russ LLP)
Facts About Multiemployer Pension Plan Funding
"This fact sheet explains funding issues in multiemployer pension plans and links to [Pension Rights Center] on-line calculators, which you can use to gauge the impact that possible benefit cuts or the guarantee limits set by the Pension Benefit Guaranty Corporation could have on your multiemployer plan pension." (Pension Rights Center)
[Guidance Overview] PBGC Reduces Regulatory Burdens on Multiemployer Plans
"Plans involved in a merger are required to jointly file a notice with PBGC before the transaction. The final rule shortens the notice period to 45 days from 120 days in cases where a compliance determination isn't requested.... Under current regulations, multiemployer plans are required to provide a series of notices and updates to notices to PBGC, participants, and beneficiaries if they will be insolvent. The final rule ends the requirement for annual updates to the insolvency notice." (Pension Benefit Guaranty Corporation)
[Official Guidance] Text of PBGC Final Regs: Multiemployer Plans; Valuation and Notice Requirements
"This final rule amends the [PBGC's] multiemployer regulations to make the provision of information to PBGC and plan participants more efficient and effective and to reduce burden on plans and sponsors. The amendments reduce the number of actuarial valuations required for certain small terminated but not insolvent plans, shorten the advance notice filing requirements for mergers in situations that do not involve a compliance determination, and remove certain in solvency notice and update requirements." (Pension Benefit Guaranty Corporation)
Can the Teamsters Save Union Pensions?
"[The Western Conference of Teamsters Pension Trust (WCTPT)] is the best funded of 194 pension funds jointly sponsored by employers and local or regional units of the International Brotherhood of Teamsters.... After the crisis the WCTPT used the fund's size to negotiate lower asset management fees.... Even at the height of the 1990s bull market, employers never took a contribution holiday, which was common at that time. The Western Conference’s early decision, led by Beck, to diversify membership rather than build locals solely with truck drivers also helped." (Institutional Investor)
Spring 2014 Report of Results from the Survey of Calendar-Year Multiemployer Plans' 2014 Zone Status
"In 2014, 65 percent of [multiemployer pension] plans are in the green zone, up from 61 percent in 2013. Plans in the yellow zone decreased from 11 percent in 2013 to eight percent in 2014. Plans in the red zone fell by 1 percentage point between 2013 and 2014. The PPA '06 funded percentage rose from 85 percent in 2013 to 88 percent in 2014. This year, 26 percent of plans have a PPA '06 funded percentage of 100 percent or more." (Segal Consulting)
ERISA Anti-Cutback Rule at Heart of Debate on Proposal for Multiemployer Plans (PDF)
"Only plans that are in danger of becoming insolvent ... and which, after making necessary adjustments, will remain solvent, would be eligible for relief under the [National Coordinating Committee for Multiemployer Plans' (NCCMP)] proposal... Amending the anti-cutback rule could also help prop up the PBGC ... The problem with giving trustees the ability to cut retirees' pension benefits is that, 'when you give them the discretion to do so, in many cases they're going to have to use it' [said Karen Friedman, executive vice president and policy director at the Pension Rights Center in Washington, D.C.]." (Bloomberg BNA Pension & Benefits Reporter, via Pension Rights Center)
An Unusual Victory for the Mid-Atlantic Pension Counseling Project
"[J]ust days before Carol expected to receive her first monthly payment, she was told that she wasn't eligible for the benefit after all because her husband's multiemployer plan had been 'terminated by mass withdrawal' before her husband's death.... Because of Carol's plight and that of other similarly-situated widows, legislation has been introduced in the U.S. Congress to close this gap. But the legislative process takes a long time.... Then something unexpected happened.... [A stranger] stepped forward, offering to pay Carol's survivor's benefit out of his own pocket." (Pension Rights Center)
[Guidance Overview] Guide to Withdrawal Liability for Multiemployer Pension Plans Under ERISA (2014 Update)
20 pages. Excerpt: "This paper is intended as a general guide to the withdrawal liability provisions of ERISA, which were added in 1980 by the Multi-Employer Pension Plan Amendments Act (MPPAA) for practitioners and executives. It discusses the MPPAA's background and the operation of its major provisions, with some emphasis on litigation procedures." (Vedder Price)
First Circuit Upholds Trial Court's Reduction of Fee Award to Pension Fund
"While the appellate court commented that this reduction of the lodestar was 'unusually large,' it nevertheless found the trial court's two-pronged rationale for the reduction to be within that court's discretion. First, the fund's victory on the merits was a partial one: it was awarded about $27,000 in damages, having sought nearly $200,000. Second, the trial court noted the initial lodestar amount ($84,657) dwarfed the size of the damage award. The trial court was within its discretion to consider proportionality as one factor in determining the fee award[.]" [Central Pension Fund of the Int'l Union of Operating Engineers and Participating Employers v. Ray Haluch Gravel Co., No. 11-1944P2-01A (1st Cir. Mar. 11, 2014)] (Wolters Kluwer Law & Business)
Plan Returns Cool, Yet Deliver Third Positive Quarter in a Row; Small Plans Bested by Large Plans (PDF)
"Contrary to last quarter, small plans underperformed large plans for the first quarter of 2014 which pulled the median return ... to a lackluster 1.66 percent ... Taft-Hartley Health and Welfare Funds was the lowest performing plan type for the third quarter in a row with a median return of 1.26 percent.... Corporate Funds delivered the largest size spread, with median returns for small versus large Corporate Funds of 1.71 and 2.39 percent, respectively[.]" (Wilshire Associates)
[Guidance Overview] Some Multiemployer Plans Permitted to Apply Windsor Decision Prospectively Only
"In the case of multiemployer defined benefit plans in the yellow or red zones, amendments increasing liabilities (e.g., through benefit increases) generally are not permitted, except that amendments required as a condition for qualification or to comply with other applicable laws are permitted for plans in their funding improvement adoption period or rehabilitation plan adoption period ... The guidance clarifies that amendments required to bring a plan into compliance as of June 26, 2013 with the Windsor decision and subsequent guidance that are effective on that date are permitted amendments during the applicable adoption period, as well as permitted amendments for plans that are in their funding improvement period or rehabilitation period ... In contrast, amendments that are optional, or that apply the Windsor decision before June 26, 2013, are not permitted amendments." (Segal Consulting)
Notes from Actuaries' 'Intersector Group' Meeting with PBGC, March 12, 2014 (PDF)
7 pages. Excerpt: "Twice a year the Intersector Group meets with representatives of the [PBGC] to dialogue with them on regulatory and other issues affecting pension practice.... PBGC is setting up a mechanism to review regulations once every five years for actuarial and economic assumptions that affect benefit amounts or liability assessments ... The first issue under review is how PBGC sets interest rates based on the annuity survey.... Providing additional guidance on vested benefits is pretty far down PBGC's priority list.... At the 2014 Enrolled Actuaries Meeting, PBGC will describe the proposals that have been made [for multiemployer plans] and the agency's analysis of those proposals. PBGC's current object is to provide data to promote a robust and informed debate." (American Academy of Actuaries)
Remarks on Multiemployer Pension Reform by Congressman John Kline
"The multiemployer pension system is a ticking time bomb that will inflict a lot of pain on homes and workplaces. According to the best information available, multiemployer plans have $818 billion in benefit liabilities yet only $397 billion in assets, which means collectively plans face a $421 billion funding shortfall. The [PBGC] warns its multiemployer pension program will be insolvent in fewer than 10 years, thanks to more obligations and fewer resources.... If we do nothing, benefits will be cut. Let me repeat that: If we do nothing, benefits will be cut. It's only a question of when and by whom." (Committee on Education and the Workforce, U.S. House of Representatives)
District Court Holds a Surcharge Is Not a Contribution for Purposes of Determining a Withdrawn Employer's Payment Schedule
"While 'contribution rate' is undefined, ERISA defines 'obligation to contribute' as an obligation to contribute arising 'under one of more collective bargaining (or related) agreements,' or 'as a result of a duty under applicable labor-management relations law.' [ERISA section 4212(a).] Given this, the court found that a surcharge required by the PPA arises under ERISA, not a collective bargaining agreement or labor-management relations law. Thus, the surcharge could not be considered part of the contribution rate." [Board of Trustees of the IBT Local 863 Pension Fund v. C&S Wholesale Grocers/Woodbridge Logistics LLC, No. 12-7823 (D.N.J. Mar. 19, 2014)] (Seyfarth Shaw LLP)
Unpaid Employer Contributions as Plan Assets: Expansion Of Liability Under ERISA
"In a distinct trend, federal courts have found that, depending on the text of the underlying plan documents, unpaid employer contributions due under a CBA may be viewed as plan assets, such that the representatives of an employer who exercise fiduciary control over those plan assets can be held individually liable for the unpaid amounts (together with interest and penalties) under ERISA. These cases will no doubt help plan trustees and administrators collect monies owed to the plan. They also should serve as cautionary warnings to contributing employers to ensure that they fully understand the obligations that they are undertaking when they agree to contribute to ERISA funds pursuant to CBAs." (Proskauer Rose LLP)
[Opinion] Jobs, Income Inequality and Taft-Hartley Benefit Plans (PDF)
"Necessary policy and regulatory changes include permitting the plans to participate directly in the health-care exchanges, allowing low-wage plan participants access to ACA subsidies and giving the retirement plans greater flexibility to adjust benefits and contribution rates.... Federal policy is chiefly focused on compliance issues for the plans, with little effort to encourage their growth in spite of their proven ability to train and maintain workforces. A better approach would be for the federal government to provide the financial resources necessary to address the plans' challenges, both through tax benefits to health-care plans and regulatory relief to pension plans." (Kraw Law Group, via Bloomberg Pension & Benefits Daily)
Key Findings from the Survey of Calendar-Year Multiemployer Plans' 2014 Zone Status Under PPA '06
"The percentage of calendar-year plans in the green zone is 65 percent, up from 61 percent in 2013. The percentage of plans in the yellow zone is 8 percent, down from 11 percent one year earlier. The percentage of plans in the red zone is 27 percent, which is similar to last year's percentage (28 percent). The average Pension Protection Act of 2006 funded percentage as of January 1, 2014 is 88 percent, which is an increase from 85 percent in 2013." [Results are summarized in a one-page infographic.] (Segal)
Once Thought Secure, Multiemployer Pensions Teeter and Fall
"The pensions of millions of Americans are being threatened because of trouble in a part of the retirement world long considered so safe that no one gave it a second thought.... Multiemployer pensions are not only backed by federal insurance, but they also were thought to be even more secure than single-company pensions because when one company in a multiemployer pool failed, the others were required to pick up its 'orphaned' retirees." (The New York Times; subscription may be required)
[Guidance Overview] Multiemployer Pension Plans May Need Amendments to Comply with IRS Guidance on Same-Sex Marriage Provisions
"The Notice requires that amendments be adopted by a multiemployer pension plan as follows: [1] If the plan's terms with respect to the requirements of section 401(a) define a marital relationship by reference to section 3 of DOMA or are otherwise inconsistent with the outcome of Windsor or the guidance in Rev. Rul. 2013-17 or the Notice, then an amendment to the plan that reflects such outcome or guidance must be adopted. [2] An amendment is required if a plan sponsor chooses to apply the rules with respect to married participants in a manner that reflects the outcome of Windsor for a period before June 26, 2013. The amendment must specify the date as of which, and the purposes for which, the rules are applied in this manner.... For a multiemployer pension plan, an amendment required in [1] is not subject to the requirements of section 432 of the Code ... while an amendment required in [2] is subject to those requirements." (Cary Kane ERISA Lawyer Blog)
[Guidance Overview] PBGC Proposed Regs Encourage Rollovers from DC Plans to DB Plans
"The PBGC wants to increase the retirement plan options available to employees who are participating in defined contribution plans. The proposed regulations promote this goal by providing guarantees to defined contribution plan participants who roll over their plan benefits to a pension plan that is later terminated by the PBGC." (Practical Law Company)
Multiemployer Pension Protection Version 2.0: More Robust Legislation Needed to Address Plans' Funding Challenges
"Failure to extend the PPA would have 'detrimental effects' on both multiemployer plans that are operating under recovery programs, and those that might eventually need to do so, the [American Academy of Actuaries' Pension Practice Council] says.... It cites several challenges driving the need for a more robust successor multiemployer plan funding regime, including: [1] The exhaustion of funds that faces the most severely underfunded plans.... [2] Financial jeopardy for the PBGC's multiemployer insurance program itself, caused by the looming insolvency of many multiemployer plans and PBGC's current deficit." (American Academy of Actuaries)
[Opinion] Text of Comments by U.S. Chamber of Commerce to PBGC on Multiemployer Plans; Proposed Valuation and Notice Requirements (PDF)
"This proposed rule acknowledges this reality and eliminates notice requirements where the administrative burdens and costs outweigh the usefulness of the information provided. As such, we appreciate the PBGC's review of these notice requirements and recognition that certain requirements are not furthering the goals of the PBGC or protecting the interests of participants." (U.S. Chamber of Commerce)
Another Way to Become Personally Liable to a Multiemployer Plan
"[A federal district] court concluded that the founders and sole officers of a cleaning company violated their fiduciary duties under ERISA by failing to remit contributions to a multiemployer plan. The plan's collection policy specifically provided that 'all money owed to the trust, which money (whether paid, unpaid, segregated or otherwise traceable, or not) becomes a trust asset on the due date.' Because of that statement, the court determined that the contributions became trust assets from the date they were owed and that the officers of the company who chose to pay other company obligations were personally liable for the delinquent contributions. That liability attached even though the business was operated in corporate form." [Trustees of the Construction Industry and Laborers' Health & Welfare Trust v. Archie, No. 2:12-CV-225 (D. Nev. Mar. 3, 2014)] (Stinson Leonard Street)
GASB Declines to Delay Implementation Date of Pension Standards
"The Governmental Accounting Standards Board [has] voted unanimously not to delay the implementation date of GASB Statement No. 68, Accounting and Financial Reporting for Pensions. The requirements of Statement 68 are effective for periods beginning after June 15, 2014. The request to the Board for an indefinite delay in implementation date came from stakeholder groups that asserted that such a delay is necessary until related auditing procedures have been implemented for a sufficient period. The concern was expressed that governments in multiple-employer pension plans will receive a modified audit opinion on their financial statements in the interim." (Governmental Accounting Standards Board)
2013 PPA 'Zone' Status of Calendar-Year Multiemployer Plans
"In 2013, a solid majority of plans -- 59 percent -- were in the green zone. This percentage represents a very slight decline from 2012 (60 percent). The percentage of plans in the yellow zone was the same for 2013 as for 2012: 14 percent. Between 2012 and 2013, the percentage of plans in the red zone increased by 1 percentage point, from 26 percent to 27 percent. The average PPA '06 funded percentage for all surveyed plans was 84 percent in 2013, the same percentage as in 2012." (Segal)
[Guidance Overview] Final Regs Implementing ACA 90-Day Waiting Period Limit Include Multiemployer Example
"The example refers to a multiemployer plan that aggregates hours in a calendar quarter. If enough hours are earned in that quarter, the plan provides coverage on the first day of the next calendar quarter. The final rule notes that such a plan has an eligibility provision that is designed to accommodate a unique operating structure and, therefore, is not considered to be designed to avoid compliance with the 90-day waiting period limitation." (Segal)
Funding Status Does Not Preclude Withdrawal from Multiemployer Plan
"Under [PPA '06], if a pension fund is in critical status, the trustees have to adopt a rehabilitation plan. The rehabilitation plan usually increases contributions and adjusts benefits so that the plan will eventually reduce its underfunding. To some extent, the rehabilitation plan assumes that the number of contributing employers will remain constant. So a withdrawing employer can cause some frustration but being in critical status with a rehabilitation plan does not lock an employer into the plan." (Fox Rothschild LLP)
ERISA Successorship Test Meant 'Interest' Was Transferred Between Predecessor and Successor Companies
"The appellate court concluded that the facts adopted by the district court, including that the successors retained most of the predecessor's employees, that all entities operated out of the same location, and that there was substantial overlap in customer lists, among other facts, created a clear picture of notice and continuity, satisfying the ERISA test. Thus, the successor companies could be substituted as judgment debtors in a lawsuit to recover delinquent pension fund contributions." [Sullivan v. Running Waters Irrigation, Inc., No. 13-1308 (7th Cir. Jan. 9, 2014)] (Wolters Kluwer Law & Business)
[Opinion] Multiemployer Pension Plans at Risk Unless Congress Acts
"In addition to the recommendations from the [National Coordinating Committee for Multiemployer Plans], the Chamber believes that additional reforms are needed to address employer concerns. For example, we recommend that limitations be placed on the amount of withdrawal liability that an employer can assume....[M]any of our members [have received] estimates of withdrawal liability that exceed the net worth of the company. Clearly, this is an outcome that was never contemplated when withdrawal liability was implemented and should be rectified." (U.S. Chamber of Commerce)
Reporting and Disclosure Guide for Multiemployer Plans, February 2014 (PDF)
57 pages, in the form of useful charts. Sections include: [1] All ERISA plans; [2] Defined benefit and defined contribution plans; [3] Defined benefit plans only; [4] Defined contribution plans only; and [5] Group health plans. (Buck Consultants)
[Guidance Overview] Pay-or-Play Relief for Multiemployer Plans (and the Employers That Love Them)
"Absent this guidance, there was concern that employers would question their participation in multiemployer plans because they had no control over whether their full-time employees were actually offered coverage by the multiemployer plan. However, the interim guidance now provides that an employer is treated as offering coverage for all employees for whom it is required to contribute to the multiemployer plan, even those full-time employees who never satisfy that plan's eligibility rules and therefore are never offered coverage." (Proskauer's ERISA Practice Center)
[Guidance Overview] For Some Plans, Sun Is Setting on PPA 2006 Multiemployer Funding Rules
"The sunset contains a continuation clause to keep the expiring provisions in place for plans that are in the yellow or red zone and are operating under an FIP or RP in the 2014 plan year.... If the sunset occurs, the impact on plans that were in the green zone in their 2014 plan year is relatively clear: these plans will continue to operate under the funding rules for financially healthy plans put into place by PPA '06. They will not revert to the pre-PPA '06 funding rules, nor will the PPA '06 single-employer plan rules apply to them.... The impact of the sunset on plans that are subject to the continuation clause is less clear." (Segal)
[Guidance Overview] PBGC Proposed Reg Would Reduce Administrative Burden on Multiemployer Plans (PDF)
"PBGC proposed to allow valuations every three years, instead of annually, for plans that are terminated by mass withdrawal but are not insolvent, where the actuarial value of the plan's nonforfeitable benefits is $25 million or less ... If a plan that is eligible to perform valuations only once every three years finds in its next valuation that the value of its nonforfeitable benefits exceed s $25 million, that plan will go back to performing valuations annually unless or until the value of its nonforfeitable benefits declines again to $25 million or less." (Buck Consultants)
PBGC Eliminates Early Flat-Rate Premium Payment Requirement for Large Plans, Including Multiemployer Plans
"[T]he final rule makes October 15 the sole filing date for flat-rate premiums for large calendar-year plans. Plans are no longer required to make estimated premium payments or filings. The change affects single employer plans, as well as multiemployer plans." (Segal)
PBGC Reviving Partition Authority Despite Limited Resources
"The agency has the authority to take responsibility for those companies that have gone out of business, called partition ability, but until now has only used this authority twice -- not because the agency does not want to help, but because its multiemployer program does not have adequate funds to do so.... However, according to [PBGC Director Joshua] Gotbaum, the agency has decided, even though it is clear it needs more resources, it will use its authority to help these plans." (PLANSPONSOR.com)
PBGC Uses 'Partition' Authority to Protect Pensions of Hostess Bakery Former Employees
"Using its partition authority for only the third time ever, the Pension Benefit Guaranty Corporation will pay retirement benefits for nearly 350 former Hostess Brands employees who were members of the Bakery and Sales Drivers Local 33 Industry Pension Fund, a distressed multiemployer plan in Baltimore. The Bakery and Sales Drivers couldn't afford retirement benefits for former Hostess employees and asked PBGC to pay for them. Separating Hostess participants from the rest of the plan will enable the plan to avoid insolvency and preserve pension benefits for most of the plan's 700 participants." (Pension Benefit Guaranty Corporation [PBGC])
2014 Planning for ERISA Multiemployer Defined Benefit Plan Operations (PDF)
"The calendar provided in this [article] will help you set up your own schedule of activities to address as the year progresses so that you do not miss important deadlines.... Is plan administration in order? ... Are your documents in good shape ... Are you ready for actuarial and financial disclosure ... Have you communicated with your actuary? ... Are you using alternative investments?" (Buck Consultants)
HHS Doing 'Regulatory Gymnastics' to Create Exemption for Certain Self-Insured Plans, Group Says
"The 'regulatory gymnastics' that the [HHS] is doing to exempt union multi-employer plans from the [ACA] reinsurance fee raises serious questions and increases the cost for other employers, according to HR Policy Association comments submitted to HHS." (Wolters Kluwer Law & Business)
[Official Guidance] Text of Proposed PBGC Regs Relaxing Reporting of Mergers by Multiemployer Plans, Reducing Valuation Frequency for Certain Smaller Multiemployer Plans
"PBGC is proposing to amend its multiemployer regulations to make the provision of information to PBGC and plan participants more efficient and effective and to reduce burden on plans and sponsors. The amendments would reduce the number of actuarial valuations required for certain small terminated but not insolvent plans, shorten the advance notice filing requirements for mergers in situations that do not involve a compliance determination, and remove certain insolvency notice and update requirements. The amendments are a result of PBGC's regulatory review[.]" (Pension Benefit Guaranty Corporation)
2014 Key Administrative Dates and Deadlines for Calendar Year Multiemployer Defined Benefit Plans (PDF)
Includes a calendar with details for each item. (Milliman)
Multiemployer Pension Funding Legislation Possible in 2014 (PDF)
"The combination of the PPA sunset at the end of this year and the financial outlook for the PBGC's multiemployer insurance program may push Congress to consider multiemployer pension plan legislation in 2014. Although comprehensive legislation has not yet been introduced in the 113th Congress on the funding of multiemployer plans, it is possible that legislation may be introduced in 2014 and that the NCCMP proposal may be the basis for such legislation. Aspects of the NCCMP proposal, however, are controversial[.]" (Buck Consultants)
[Opinion] Lawmakers Should Let the Sun Set on the Pension Protection Act (PDF)
"The solution to the financial problems of multiemployer plans ... is not found in laws that hamstring governance, discourage innovation and stifle self-sufficiency. Instead, the federal government should remove barriers that prevent troubled multiemployer plans from fixing themselves by restructuring their benefits and attracting new employee and employer participation." (George M. Kraw and Katherine McDonough via The National Law Journal)
Multiemployer Plan Reporting: Financial Statement Disclosures
"[These] disclosures ... are required for nonpublic entities for fiscal years ending after December 15, 2012, and disclosures should be made for all prior periods presented. Construction contractors that are signatories to a collective bargaining agreement that includes contributions to a multiemployer pension plan must work with their accountants and the plan's actuary to obtain the necessary information to comply with the Financial Accounting Standards Board disclosure requirements." (Belfint Lyons & Shuman, CPAs)
House Committee Examines Multiemployer Pensions
"In response to several proposals to consider increasing premiums, decreasing benefits, or engaging in a mix of both, witnesses urged the committee to be cautious. This was because doing either might have adverse effects on the desired benefit levels. Increasing premiums may discourage potential employers from joining plans, while reducing benefits might encourage workers to leave them." (Financial Executives International)
Taft-Hartley Plans May Get Exemption from Reinsurance Fee
"Buried in [recently-issued HHS rules] is the disclosure that the administration will propose exempting 'certain self-insured, self-administered plans' from the law's temporary reinsurance fee in 2015 and 2016 [at page 65051 in the October 30, 2013 Federal Register]. That's a description that applies to many Taft-Hartley union plans acting as their own insurance company and claims processor ... Eliminating the reinsurance fee was one of several resolutions adopted at the AFL-CIO's September convention, along with giving union plans access to ACA tax credits for lower-income members." (Kaiser Health News)
Improvements Needed for Multiemployer Pension System
"While attendees of a U.S. House subcommittee hearing agreed that the U.S. multiemployer pension system needs to be improved, they had differing opinions on how to achieve this.... [Subcommittee chair David P. Roe] cautioned that inaction could have a chilling effect on the current problems.... While he acknowledged that a number of multiemployer plans are recovering, Roe reminded hearing attendees, 'We cannot lose sight of the sizeable number of large plans that remain in financial trouble.'" (PLANADVISER.com)
[Opinion] Statement of Pension Rights Center to Joint Congressional Hearing on Multiemployer Pension Plan Issues (PDF)
"[T]he rationale underlying the NCCMP proposal for deeply-troubled plans is that cutting some retiree benefits now will prevent the necessity of larger reductions later should the plan fail. This is not, however, necessarily true for all retirees.... [Further,] multiemployer plan guarantees are already much lower than guarantees for single-employer plans, which generally will not reduce normal retirement benefits if they are below the maximum guarantee level, currently $57,477 for a single-life benefit. In contrast, the maximum guarantee for a retiree with 30 years of service in a multiemployer plan is only $12,870[.]" (Pension Rights Center)
House Committee Addresses Multiemployer Pension Plan Problems
"Factors such as multiple investment downturns, an aging workforce, and fewer contributing employers have threatened the long-term sustainability of the multi-employer plan system. Moreover, multi-employer plans are becoming increasingly reliant on the [PBGC] ... for financial assistance.... Subcommittee Chairman Phil Roe (R-TN) concluded the hearing by pointing out that many provisions of the Pension Protection Act (PPA) sunset at the end of 2014, furthering the need for legislative action." (Littler)
Text of District Court Opinion Refusing to Recognize Federal Common Law Negligence Claim Against Multiemployer Pension Plan Trustees (PDF)
"According to DGA, granting the Trustees complete immunity with respect to their alleged tortious mismanagement of the Pension Plan's assets cannot be the result Congress intended when it adopted the Multiemployer Pension Plan and Amendment Act of 1980 (MPAA), and, therefore, there is an 'awkward gap in the statutory scheme.' ... The Court disagrees. The Sixth Circuit has not recognized a federal common law cause of action by employers against trustees for negligence, and this Court declines to create one." [Digeronimo Aggregates, LLC (DGA) v. Zemla et al, No. 1:13-CV-1208 (N.D. Ohio Oct. 25, 2013)] (United States District Court for the Northern District of Ohio)

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