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Multiemployer plans

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More Ways to be Tagged with Withdrawal Liability
"The Seventh Circuit found that it was common knowledge that many multiemployer pension funds are underfunded and therefore have withdrawal liability. Because the son had been active in the father's business, the son would know about the collective bargaining agreement and the obligation to contribute to the pension fund.... Consequently, the court of appeals refused to uphold a decision of the district court that the son necessarily had no knowledge of the withdrawal liability. According to the Seventh Circuit, knowledge of that liability is important to holding a successor responsible for the liability." [Board of Trustees of the Automobile Mechanics' Local No. 701 Union and Industry Pension Fund v. Full Circle Group, Inc., No. 15-2497 (7th Cir. June 24, 2016)] (Stinson Leonard Street)
CBO Cost Estimate for S. 3470, the Miners Protection Act of 2016
"S. 3470 would authorize payments for health and pension benefits for certain retired or disabled coal miners and their eligible dependents.... CBO and the staff of the Joint Committee on Taxation (JCT) estimate that enacting the bill would reduce direct spending, on net, by $7 million and increase federal revenues by $67 million over the 2017-2026 period. Considering both the direct spending and revenue effects, we estimate that enacting S. 3470 would reduce budget deficits, on net, by $74 million over the 2017-2026 period." (Congressional Budget Office [CBO])
Taking the Taft-Hartley Defined Contribution Plan to the Next Level (PDF)
"This paper will explain the merits of moving the defined contribution plan from a balance forward, periodic-valued, trustee-directed plan to a daily-valued, self-directed plan that participants can view and monitor every day in order to make more informed decisions about their retirement.... [T]rustees have an increased fiduciary responsibility to ensure these plans are being run efficiently and in the best interests of the participants and their beneficiaries. Bringing the plan into a daily-valued environment that allows the participant to direct their investments offers [additional] advantages[.]" (Milliman)
Pension Rescue Rejection Letters May Be Road Map for Other Plans
"Multiemployer pension plans seeking government approval to suspend benefits have a handy tool that could help them get that approval -- the government's rejection letters shooting down every proposed cut so far.... Although the decision letters address specific plan applications, they communicate what Treasury wants to see before it will sign off on cuts ... The level of detail in Treasury's letters far exceed what the agency needed to tell the rejected plans, but was quite informative for other potential plan applicants." (Bloomberg BNA)
DOL Investigating Timely Payment of Pensions to Terminated Vested Participants Nationwide (PDF)
"[T]rustees should consider taking steps now to help ensure that they will not be caught off-guard if they receive a notice for one of these investigations.... [1] Determine whether the plan has the necessary data to identify the terminated vested participants ... who are about to about to become or who already are eligible for payment.... [2] Notify terminated vested participants who are about to become eligible for payment at NRA or to be required to start payment at age 70-1/2 ... [3] Inform terminated vested participants who are at or who have passed their required age 70-1/2 payment date that their payments must begin, and take steps to initiate payment as soon as possible.... [4] Investigate the treatment of uncashed checks under the plan." (Segal Consulting)
[Opinion] Composite Bill: Another Threat to Multiemployer Pension Plans
"The draft composite bill could turn well-funded pension plans into poorly-funded plans while also allowing for cuts to retirees' and active workers' benefits in both the old and new plans. The Center is working with a broad coalition of organizations -- including AARP, the International Brotherhood of Teamsters, the Western Conference of Teamsters, the International Brotherhood of Boilermakers, and the United Steelworkers -- to oppose the composite bill." (Pension Rights Center)
[Official Guidance] Text of Extension of Comment Period on Application by New York State Teamsters Multiemployer Plan for Reduction in Benefits
"On September 28, 2016, the Department published a notice of availability and request for comments regarding an application to Treasury to reduce benefits under the New York State Teamsters Conference Pension and Retirement Fund in accordance with the Multiemployer Pension Reform Act of 2014 (MPRA). The purpose of this notice is to reopen the comment period to provide more time for interested parties to provide comments." (U.S. Department of the Treasury)
2017 Planning for ERISA Multiemployer DB 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 for your qualified plans.... [It includes] a number of key issues for you to consider (along with the calendar deadlines) as we head into 2017." (Xerox HR Services)
The Financial Condition of the PBGC Multiemployer Program
25 presentation slides. "Multiemployer plans have approximately $1 trillion in defined benefit (DB) pension liabilities covering 10 million private-sector employees in unionized industries ... [M]ost systems have significant underfunding.... Unfunded pension liabilities: burden public and private employers and their current employees; create uncertainty about benefits for beneficiaries; expose the federal government to losses from PBGC's insurance of private pensions. Underfunding has been exacerbated by: structural problems with the funding of pension plans ... employers' switching from defined benefit to defined contribution plans; a weak economy." (Congressional Budget Office [CBO])
Treasury Announces Conference Call with Participants in the Ironworkers Local 17 Pension Plan
"In addition to the written comments already received, Treasury is providing an opportunity for all plan participants to provide feedback on the application. Special Master Kenneth R. Feinberg and Treasury staff are hosting a conference call for any Ironworkers 17 participants and beneficiaries who wish to call and provide comments on the application. The teleconference will be Wednesday, November 30, 2016 at Noon Eastern Time." (U.S. Department of the Treasury)
[Opinion] Too Underfunded for MPRA?
"[T]he new administration will have to come to grips with the United Mine Workers of America 1974 Pension Plan, whose $4.1 billion in assets and $9.7 billion in liabilities makes it too severely underfunded to qualify for MPRA reductions.... About $2.3 billion out of the $3.8 billion that the plan supposedly had in assets as of June 30, 2015 was a guess." (Burypensions)
[Opinion] Modernizing Multiemployer Pensions
"By providing trustees important flexibility to manage the composite plan effectively and responsibly, the proposal will help provide workers a stable, secure annuitized benefit when they retire.... [By] including strict funding requirements that will ensure composite plans are responsibly managed, the proposal will provide retirees greater certainty and financial stability for the years ahead." (Committee on Education and the Workforce, U.S. House of Representatives)
Multiemployer Pension Funded Status Has Been Steady So Far in 2016 (PDF)
"The aggregate funded percentage for multiemployer plans is estimated to be 76% as of June 30, 2016, compared with 75% as of December 31, 2015. For most multiemployer pension plans, estimated 2016 investment experience through June 30, 2016, was over 3%, just slightly below expected returns. About one-half of the total underfunding for multiemployer plans continues to be attributable to plans that are less than 65% funded. Of the 300+ critical plans, about 40% are projected to be insolvent at some point. Can these plans be helped by benefit suspension provisions of [MPRA]?" (Milliman)
Treasury Denies Teamsters Local 469 Application to Reduce Pension Benefits
"The pension fund assumed an annual investment return of 7.25% for the entire 45 years projected in the application to achieve solvency. [Treasury's Special Master Kenneth Feinberg] said those assumptions were not reasonable because they did not use appropriate investment forecast data, were overly optimistic, and inappropriate given a negative cash flow and other factors." (Pensions & Investments)
Text of Treasury Department Denial of Application for Suspension of Benefits by Teamsters Local 469 Pension Fund (PDF)
"[A]fter reviewing the Application and consulting with PBGC and DOL, Treasury has determined that the suspensions described in the Application fail to satisfy the requirement set forth in Kline-Miller 'that the proposed benefit suspensions, in the aggregate, be reasonably estimated to achieve, but not materially exceed, the level that is necessary to avoid insolvency', because the zero-takeup assumption regarding spousal survivor benefits and the investment return assumption used for this purpose are not reasonable." (U.S. Department of the Treasury)
Multiemployer Defined Benefit Pension Plans: A Primer and Analysis of Policy Options (PDF)
30 pages. "Congress established separate PBGC programs to insure single and multiemployer DB pensions. For example, PBGC becomes the trustee of terminated single employer DB pension plans. PBGC does not become the trustee of multiemployer DB pension plans; rather, it makes loans to insolvent multiemployer DB plans so the plans may continue to pay participants' guaranteed benefits. Although PBGC has sufficient resources to make loans to smaller multiemployer DB plans, the insolvency of a large multiemployer DB pension plan would likely result in a substantial strain on PBGC's multiemployer insurance program." [Report R43305, dated Nov. 3, 2016.] (Congressional Research Service [CRS])
[Opinion] Speech by Karen Friedman at the American Academy of Actuaries' Annual Meeting and Public Policy Forum
"[T]here are two big problems that need to be solved. The first is ensuring that the PBGC is able to continue to pay benefits for the insolvent plans that it is already committed to supporting. The second is to solve the problem of so-called 'critical and declining' plans -- but not by allowing these plans to make the harsh benefit cuts authorized by MPRA. The MPRA cutback provisions must be repealed! And, of course, saving severely underfunded plans will make it a lot easier to ensure that the PBGC will have the capacity to meet its obligations to insolvent plans." (Pension Rights Center)
Text of Treasury Department Denial of Application for Suspension of Benefits by Ironworkers Local 16 Pension Fund (PDF)
"[A]fter reviewing the Application and consulting with PBGC and DOL, Treasury has determined that the suspensions described in the Application fail to satisfy the requirement set forth in Kline-Miller 'that the proposed benefit suspensions, in the aggregate, be reasonably estimated to achieve, but not materially exceed, the level that is necessary to avoid insolvency', because the mortality and the hours of service assumptions used for this purpose are not reasonable." (U.S. Department of the Treasury)
Teamsters Group Funds Forensic Investigation of $1.6 Billion New York State Teamsters Pension
" 'Retired and active Teamsters in New York are now facing crippling cuts under new pension legislation. Throughout 2016 we have been fundraising for an independent forensic investigation, and have decided to 'leave no stone unturned' with a goal to understand better how we got to this point,' said Mark Greene of [Teamsters Alliance for Pension Protection]." (Forbes)
Central States Not Entitled to Reimbursement From Insurers
"Central States sought to recover $343,000 from the insurers. The parties disputed the coordination-of-benefit clauses, and each side argued that the clauses made the other primarily liable for the beneficiaries' medical expenses." [Central States, Se. & Sw. Areas Health & Welfare Fund v. Am. Int'l Grp., Inc., No. 15-2237 (7th Cir. Oct. 24, 2016)] (Bloomberg BNA)
Application for Benefits Suspension: Automotive Industries Pension Plan
"The Automotive Industries Pension Plan application proposing benefit suspensions can be found [at the linked page]. The application is organized by the items specified in Revenue Procedure 2016-27. The Automotive Industries Pension Plan application is currently being reviewed and the review is expected to take several months." (U.S. Department of the Treasury)
Honoring the PBGC Guarantee for Multiemployer Plans Requires Difficult Choices (PDF)
11 pages. "Reform options include premium increases in a variety of structures, resources from outside the system, and alternatives that could increase the stability of ongoing multiemployer plans in an effort to reduce the need for PBGC financial assistance. None of the options are ideal, and they require difficult sacrifices, possibly from parties who had no role in the creation of the problem. But it is clear that if nothing is done, the guarantees promised to the participants in multiemployer plans will not be fully honored." (American Academy of Actuaries)
Criminal Charges Filed Against Contributing Employer for Mail Fraud Based on Filing False Remittance Information (PDF)
"[A] civil action by several ERISA-governed multiemployer fringe benefit funds ... against two companies for unpaid fringe benefit contributions apparently triggered a CRIMINAL action by the Department of Justice against the companies ' owners and the companies ... for mail fraud and other criminal violations based upon the use of the U.S. Mail to file false contribution remittances." (United Actuarial Services, Inc.)
[Opinion] Pension Rights Center Comment Letter to Treasury Department on Application for Benefits Suspension Submitted by Iron Workers Local 17 Pension Plan (PDF)
"[We] urge the Treasury Department to reject the application ... on the ground that it does not satisfy the relevant statutory criteria for approval of the application. Specifically: [1] The application does not demonstrate that the proposed cuts will ensure that the plan will remain solvent for 30 years; [2] The application fails to show that the plan's trustees have taken all reasonable steps to avoid insolvency; [3] The proposed benefit suspensions are not equitably distributed across the participant and beneficiary population; and [4] The notice provided to participants was not written in a manner so as to be understood by the average plan participant." (Pension Rights Center)
[Opinion] The MPRA: One Size Fits No One
"In the two years since the passage of the [Kline-Miller Multiemployer Pension Reform Act of 2014 (MPRA)], nothing has happened except expenditures of a great deal of money by multi-employer funds to obtain the relief from the Treasury and a hue and cry from [senators] who now regret having voted in favor of legislation that has caused such human suffering. They then penned a common letter to the Treasury Department demanding that the lengthy and costly application by the Central States and Southeast Pension Fund be denied. Central States' application was subsequently denied." (Jackson Lewis P.C.)
Tea Leaves Offer Clues to Coming Pension Rescue Petitions
"[T]he lower the ratio of active employees to total participants, the more likely a plan would be to file a petition.... Having a ratio that is too low could mean that a plan is susceptible to having its petition rejected for being too financially troubled to avoid insolvency. The Central States plan had an active to total participant ratio of about 16 percent, while the Road Carriers Local 707 Pension Fund, which also had its petition rejected, had a ratio of about 18 percent." (Bloomberg BNA)
[Guidance Overview] New Guidance on Plan and Large Employer Reporting Under the ACA
"[C]ontributing employers to multiemployer plans will continue to report their offers of coverage to employees for whom they contribute to a multiemployer plan in the same way they reported these offers for 2015.... The most significant change in Form 1095-C reporting is that for 2016 large employers will now be required to report 'conditional' offers of coverage to spouses." (Segal Consulting)
Notes from Meeting of Actuaries 'Intersector Group' with IRS, September 2016 (PDF)
5 pages. Topics include: [1] Guidance timing and priorities ... [2] Instructions for 2015 Form 5500 Schedule H/I line 4L and Form 5500-SF line 10f ... [3] Updating outdated mortality tables ... [4] Current processing time for approvals of shortfall and other funding method requests ... [5] Valuation of variable-annuity plans for funding, 417(e), etc.... [6] Multiemployer Pension Reform Act (MPRA) suspensions ... [7] Church plan litigation ... [8] Treating early retirement factors as benefits, rights, and features for nondiscrimination testing ... [9] Intersector Group suggestion to offer a special one-time determination letter opportunity within the next two years, solely for hybrid plans forced to change their interest crediting rate to comply with the final rules (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 PBGC, September 2016 (PDF)
4 pages. Topics include: [1] MPRA exclusion of certain contribution increases required by funding improvement and rehabilitation plans from withdrawal liability -- timing and scope of regulations ... [2] MPRA partitions -- evolution of PBGC philosophy on non-impairment provision ... [3] Policy on refunding premiums when sponsor learns a participant died with no spouse/beneficiary entitled to plan benefits several years in the past ... [4] 4010 filings ... [5] Viability of PBGC multiemployer program ... [6] Discussion issues raised by PBGC representatives. (American Academy of Actuaries, Conference of Consulting Actuaries, Society of Actuaries, and ASPPA College of Pension Actuaries [ACOPA])
Criminal Liability for Failure to Contribute to Multiemployer Benefit Fund?
"[This case] represents a troubling expansion of liability from civil to criminal. Further, imposition of criminal liability for something (double-breasted operations) described as 'neither uncommon nor inherently unlawful' is similarly disturbing. Finally, also worrying is [that] the determination of the sufficiency of the sophisticated elements of a lawful double-breasted operation will be up to a jury in a criminal proceeding." [U.S. v. Thompson, No. 16-10014 (D. Mass. Sept. 13, 2016)] (Jackson Lewis P.C.)
Furniture Workers' Pension Fund Applies for Benefits Suspension
"The pension is in 'critical and declining' status, and is projected to become insolvent by 2021 ... With $180 million in actuarial liabilities projected for July, the fund would be 30 percent funded at that time ... The board seeks for the pension benefits to be suspended May 1, 2017. A suspension would drop monthly benefits from $238 on average to $219, yielding an overall reduction of $12 million." (The Tennessean)
Lawmaker Warns Against Stealth Passage of Pension Revamp
"[Rep. Joseph Courtney (D-Conn.) said] that it's 'still theoretically possible for the proposal to be debated in the committee and amended during the post-election lame-duck session.' Yet, he said he sees many parallels between this bill and the way the MPRA bill was passed two years ago as part of an omnibus bill. During the hearing, Courtney said it's 'common sense' that there isn't time left to amend the bill and questioned the timing of the draft bill hearing. Later, he said he suspects this bill, which is supported by many of the same groups that supported the MPRA, is part of a similar strategy used to pass that law." (Bloomberg BNA)
[Opinion] Joint Statement of Unions and Other Organizations Opposing Consideration of 'Composite' Pension Legislation
"The composite legislation does not go nearly far enough to ensure the retirement security of our members and other participants in multiemployer pension plans. The draft provides inadequate funding for composite plans and weakens the funding base for existing (legacy) plans ... Protecting the benefits of workers in legacy plans would require deep cuts to active workers in composite plans in times of market instability.... [C]omposite plans are exempt from paying PBGC premiums ... When combined with plan failures, the PBGC will be saddled with significant new liabilities at the same time an already underfunded multiemployer insurance program is depleted of funds." (International Association of Machinists and Aerospace Workers, International Brotherhood of Boilermakers, International Brotherhood of Teamsters, United Steelworkers, National Retirees Legislative Network, and the Pension Rights Center)
House Subcommittee Holds Hearing on Multiemployer 'Composite Plan' Proposal
"[T]he draft proposal would authorize 'composite' multiemployer plans, an innovative retirement plan option for workers and employers. The proposal represents the next step in the committee's ongoing efforts to strengthen retirement security and improve the multiemployer pension system." (Health, Employment, Labor, and Pensions Subcomittee of the Committee on Education and the Workforce, U.S. House of Representatives)
Senate Committee Approves Funding for Mine Workers' Pension Plan
"The mine workers bill, whose supporters say will have a floor vote by the end of the year, was approved 18-8. It would allow the use of surplus funds from the Abandoned Mine Land Reclamation Fund, which currently goes to the U.S. Treasury. Without the funds, the pension fund could become insolvent and overwhelm the [PBGC]." (Pensions & Investments)
Multiemployer Plan Application for Benefit Suspension: New York State Teamsters Conference Pension and Retirement Fund
"The New York State Teamsters Conference Pension and Retirement Fund application proposing benefit suspensions can be found [at the link]. The application is organized by the items specified in Revenue Procedure 2016-27." (U.S. Department of the Treasury)
[Official Guidance] Text of PBGC Draft Forms and Instructions for Proposed Expanded Missing Participants Program
"PBGC [has issued] a proposed rule that would expand its existing Missing Participants Program to cover terminated 401(k) and other defined contribution plans and certain defined benefit plans that are not currently covered by the Program.... These forms are for information purposes only. PBGC-insured single-employer plans in the process of doing a standard termination should use the current forms to report missing participants." (Pension Benefit Guaranty Corporation [PBGC])
[Official Guidance] Text of PBGC FAQs on Proposed Expanded Missing Participants Program
"Why is PBGC proposing a missing participants regulation? ... Will terminating plans be required to use PBGC's Missing Participants Program? ... How will the program work for defined contribution plans that choose to use it? ... What are the benefits to plans and participants of PBGC's proposed defined contribution Missing Participants Program? ... Did PBGC coordinate with other federal agencies? ... What types of defined contribution plans could use the Missing Participants Program? ... Does PBGC propose any changes to the current program for single-employer PBGC-insured defined benefit plans? ... When will the proposed expanded Missing Participants Program be available? ... Under the proposal, will plans pay a fee to participate in the Missing Participants Program? Where can I find more information about this proposal?" (Pension Benefit Guaranty Corporation [PBGC])
[Official Guidance] Text of PBGC Proposed Regs: Expanded Missing Participants Program to Cover Multiemployer Plans, Most DC Plans, and Certain Other DB Plans
108 pages. "The [PBGC] administers a program to hold retirement benefits for missing participants and beneficiaries in terminated retirement plans and to help those participants and beneficiaries find and receive the benefits being held for them. The program is currently limited to single-employer defined benefit pension plans covered by the pension insurance system under title IV of [ERISA]. PBGC proposes to make changes to its existing program and, as authorized by the Pension Protection Act of 2006, to establish similar programs for multiemployer plans covered by title IV, certain defined benefit plans that are not covered by title IV, and most defined contribution plans. PBGC seeks public comment on its proposal." (Pension Benefit Guaranty Corporation [PBGC])
[Official Guidance] Notice of Multiemployer Pension Plan Application to Reduce Benefits Filed by United Furniture Workers Pension Fund A
"The Board of Trustees of the United Furniture Workers Pension Fund A (UFW Pension Fund), a multiemployer pension plan, has submitted an application to Treasury to reduce benefits under the plan in accordance with [MPRA]. The purpose of this notice is to announce that the application ... has been published on the website of the Department of the Treasury, and to request public comments on the application from interested parties, including participants and beneficiaries, employee organizations, and contributing employers of the UFW Pension Fund." (U.S Department of the Treasury)
[Guidance Overview] Avoiding the Pitfalls of the Multiemployer Pension Plan Amendments Act (PDF)
"This article identifies and addresses the dangerous 'traps' of MPPAA that employers will confront immediately after an assessment of withdrawal liability and suggests practical strategies to preserve an employer's ability to contest its withdrawal liability.... MPPAA contains unwieldy and often incomprehensible time limits. Failure to meet those time limits can preclude an employer from contesting its withdrawal liability assessment." (Jackson Lewis, P.C., via Wolters Kluwer Law & Business)
Modernizing Multiemployer Pensions: Questions and Answers About the Composite Plan Proposal
"Would the retirement plans created under the proposal be defined benefit or defined contribution retirement plans? ... Does the proposal weaken current funding standards for traditional multiemployer pension plans? ... Will existing multiemployer pension plans facing severe financial challenges be able to transition to the composite plan design? ... Does this proposal allow employers to escape their responsibilities to their traditional multiemployer pension plan? ... Will this proposal exacerbate the fiscal challenges facing the PBGC?" (Committee on Education and the Workforce, U.S. House of Representatives)
House Committee Releases Discussion Draft on a New Multiemployer Plan Structure: 'Composite Plans' (PDF)
"The Act would: [1] Require that benefits under a composite plan be calculated pursuant to a formula set by the plan's trustees in order to provide annuities upon retirement. [2] Require the trustees of a composite plan to take corrective actions in the current plan year if the plan is projected to be less than 120% funded in 15 years. [3] Allow a composite plan to be established either as a stand-alone plan or a component of an existing multiemployer defined benefit retirement plan[.]" (United Actuarial Services, Inc.)
Draft Bill May Offer Better Mousetrap for Multiemployer Pensions
"The draft bill, released Sept. 9, would permit plans in the troubled multiemployer system to use newly created 'modified' defined contribution plans -- known as 'composite plans' -- designed to be successors to existing multiemployer defined benefit plan structures.... Composite plans wouldn't participate in the PBGC's defined benefit plan insurance system, which provides a backstop for retirees when their plans become insolvent and can't pay benefits." (Bloomberg BNA)
Rep. John Kline Releases Discussion Draft to Modernize Multiemployer Pensions
"[T]he proposal follows years of bipartisan work led by a coalition of business and labor leaders and would provide workers a new option to save for retirement by authorizing an innovative multiemployer plan structure known as 'composite plans.' The draft reflects input from employers, worker representatives, and retiree advocates. The committee is requesting public feedback on the proposal." [Also available: Text of discussion draft; section-by-section outline of the discussion draft; summary of the discussion draft; and answers to basic questions.] (Committee on Education and the Workforce, U.S. House of Representatives)
Application for Multiemployer Plan Benefit Suspension: United Furniture Workers Pension Fund A
"The United Furniture Workers Pension Fund A ('UFW Pension Fund A') application proposing benefit suspensions can be found below. The application is organized by the items specified in Revenue Procedure 2016-27. The UFW Pension Fund A application is currently being reviewed and the review is expected to take several months." (U.S. Department of the Treasury)
[Opinion] Joint Letter Submitted to Congress on Threats Posed by Proposed 'Composite' Multiemployer Pension Plans
"[T]he Pension Rights Center joined with retiree and labor organizations by sending a letter to the U.S. House of Representatives expressing extreme opposition to draft legislation that would create a new type of pension plan called a 'composite' multiemployer plan. This draft legislation would substantially weaken the funding status of currently-existing multiemployer plans, putting at risk the pensions of retirees participating in these plans. The Center strongly opposes any attempt ... to push through legislation in yet another year-end backroom deal." (Pension Rights Center)
What Happens to Multiemployer Pension Plan Reform Now?
"If one of the most useful tools provided by the MPRA has been stymied because the Treasury Department is unprepared to accept what it views as overly optimistic actuarial assumptions, what is the future of multiemployer pension plan reform? One proposal that was not included in the final version of the MPRA involved the use of so-called hybrid composite plans.... In light of the Treasury Department's rejection of Central States' application, the assumption that many unions will oppose hybrid composite plans may no longer be accurate. Government reports have estimated that up to 15% of multiemployer plans are at risk of becoming insolvent over the next 20 years and that up to 1.5 million participants are at risk from those insolvencies." (Polsinelli PC)
Multiemployer Pension Plans: Solving the Anticipated Insolvency of PBGC Program -- A Bipartisan Endeavor (PDF)
"[R]eading the CBO and PBGC reports may cause many to lose confidence and reinforce beliefs that efforts to improve the financial condition of the PBGC's multiemployer plan insurance program will be anything but successful. Notwithstanding, employers and plan sponsors with multiemployer plans may want to get a better understanding of the gravity of the situation, as well as potential fixes that would impact them if implemented." (Xerox HR)
[Official Guidance] Text of Treasury Department Notice of Revised Application by Iron Workers Local 17 Multiemployer Pension Plan for Reduction in Benefits
"The Board of Trustees of the Iron Workers Local 17 Pension Fund ... has submitted a revised application ... to reduce benefits under the plan in accordance with the Multiemployer Pension Reform Act of 2014 (MPRA). This revised application was submitted on July 29, 2016 ... following the withdrawal of the application that it submitted on December 23, 2015. The purpose of this notice is to announce that the revised application has been published on the Treasury website and to request public comments on the application from interested parties[.]" (U.S. Department of the Treasury)
[Opinion] Why a Coal Miner Pension Bailout Could Lead to a $600 Billion Union-Pension Bailout
"The UMWA pension plan ... has promised $5.6 billion more in pension benefits than it will be able to pay.... [It] represents only one of more than 1,300 multiemployer (union) pension plans across the U.S. Almost all of these plans have made promises they cannot keep.... If Congress forces taxpayers to bail out private union plans, why not also private non-union plans that have $760 billion in unfunded liabilities, and public plans that have as much as $4 trillion to $5 trillion in unfunded liabilities?" (The Heritage Foundation)
Teamsters, Bricklayers Funds Eye Multiemployer Benefit Cuts
"New York State Teamsters Conference Pension and Retirement Fund, Syracuse, is expected to file an application on Aug. 25 to reduce benefits under the Multiemployer Pension Reform Act of 2014 ... Benefit reductions would go into effect on July 1, 2017. As of Jan 1, 2014, the most recent 5500 filing, the plan was 46.5% funded, with $1.46 billion in assets and $3.14 billion in liabilities." (Pensions & Investments)
Application for Benefit Suspension: Bricklayers and Allied Craftsmen Local No. 5 Pension Plan
"The Bricklayers and Allied Craftworkers Local 5 New York Retirement Fund Pension Plan application proposing benefit suspensions can be found [at the link]. The application is organized by the items specified in Revenue Procedure 2016-27." (U.S. Department of the Treasury)
[Opinion] U.S. Chamber of Commerce Comment Letter to the PBGC on Mergers and Transfers Between Multiemployer Plans
"Congress established a framework of conditions, limitations, factors for consideration, protections, notices and procedures that all serve to observe and protect the interests of participants while permitting the plans wide latitude within such a framework. [The Chamber's] comments focus on ensuring that substance takes precedence over form and that all parties receive the information and assistance they need without being overly burdened." (U.S. Chamber of Commerce)
[Opinion] NCCMP Comment Letter to PBGC on Proposed Merger Transfer Rules (PDF)
"[T]he Proposed Rule adopts an interpretation of the interaction of the merger rule with the suspension rule ... that is inconsistent with the acknowledged legislative intent.... This interpretation will work against the legislative intent of MPRA by making financially distressed plans less likely to be merged as [a plan] likely to take in a financially distressed plan would be compelled to restore suspended benefits to the detriment of its own financial position.... [T]ightening the safe harbor provision will make mergers more difficult and therefore are contrary to the legislative purpose of MPRA." (National Coordinating Committee for Multiemployer Plans [NCCMP])
[Opinion] American Academy of Actuaries Comments to PBGC on Proposed Regs for Mergers and Transfers Between Multiemployer Plans (PDF)
11 pages. "The fact that the statute permits PBGC to provide financial assistance that would enable a plan to postpone insolvency -- not just avoid it -- is an important concept that should be applied throughout the regulations on mergers and transfers.... PBGC's proposed rule, however, would make the solvency requirements for mergers and transfers involving multiemployer plans even stricter than they are under current regulations.... Transactions should be evaluated not against the ideal outcome of no participant benefit losses, but against the current realities facing plans." (American Academy of Actuaries)
Iron Workers Retirees Get Temporary Reprieve from Pension Cuts
"Retired iron workers in Northeast Ohio will get a short reprieve before their pensions could be cut.... Cuts of monthly pensions by up to about half must be made for some retirees in order to make sure there's something left for everyone over time, the pension's trustees say. But the union fund's trustees late last week withdrew their government application for permission to make those cuts, and submitted a revised one instead." (Cleveland Plain Dealer)
PBGC Proposal Could Halt Plan Mergers, Grocers Say
"Attempts to save struggling multiemployer pension plans could be halted by proposed rules issued by the [PBGC], according to the grocery-chain Kroger Co. and a coalition of food and dairy companies. The proposed rules are intended to help plans that are in 'endangered,' 'critical' or 'critical and declining' status to merge with or transfer their assets to healthier plans to prevent -- or, in some cases, merely postpone -- insolvency. The rules would 'prevent mergers and transfers that are in the best interests of plan participants and that lessen the risk to the PBGC for guaranteed benefits,' the Cincinnati-based company said[.]" (Bloomberg BNA)
Options to Improve the Financial Condition of the PBGC's Multiemployer Program (PDF)
35 pages. "In 2014, lawmakers enacted changes ... [which] modestly improved the outlook for the multiemployer program, but claims for financial assistance are still projected to greatly exceed the program's resources over the next 20 years. Policymakers and others have proposed additional changes to improve the financial position of PBGC and the overall health of multiemployer pension plans. CBO analyzed the effects of several types of proposed changes[.]" (Congressional Budget Office [CBO])
[Official Guidance] Text of FASB Proposed ASU: Employee Benefit Plan Master Trust Reporting
25 pages; covers Defined Benefit Pension Plans (Topic 960), Defined Contribution Pension Plans (Topic 962), Health and Welfare Benefit Plans (Topic 965). "This proposed Update relates primarily to the reporting by an employee benefit plan for its interest in a master trust. A master trust is a trust for which a regulated financial institution ... serves as a trustee or custodian and in which assets of more than one plan sponsored by a single employer or by a group of employers under common control are held.... The amendments in this proposed Update would clarify presentation requirements for a plan's interest in a master trust and require more detailed disclosures of the plan's interest in the master trust. The proposed amendments also would eliminate a redundancy relating to 401(h) account disclosures." (Financial Accounting Standards Board [FASB])

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