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News Items, by Subject

Multiemployer plans


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PBGC Issues Final Regs on Mergers and Transfers Between Multiemployer Plans
"PBGC recognized that ERISA Section 4231(b)(2) would bar a plan merger or transfer that happens at the same time as a benefit suspension under ERISA Section 305(e)(9). To permit a merger or transfer in these circumstances, the PBGC added a new subsection which provides that it may waive the requirement concerning the preservation of accrued benefits if the benefit suspension and transfer or merger happen simultaneously." (Thomson Reuters Practical Law)
Taft-Hartley Pension Plans: The Long and Difficult Road Traveled
"Between 2008 and 2009, the number of active employed participants in the median pension plan in the construction industry plummeted 13%, with further declines over the next several years. As a result, the average funding status for most plans is yet to return to 2007 levels, ... even as most investment portfolios and financial markets have staged a strong comeback since the recession." (NEPC)
Multiemployer Pension Crisis Fix Would Cost $34 Billion -- Far Less Than First Estimated
"The finalized estimate for the Butch Lewis Act of 2017 (S.2147), which would provide government-backed loans to financially struggling plans while avoiding cuts to retiree benefits, is significantly less than a previous 10-year estimate that the measure would cost the government up to $100 billion[.]" (Bloomberg BNA)
[Official Guidance] Text of PBGC Final Regs: Mergers and Transfers between Multiemployer Plans
66 pages. "This final rule makes one major and numerous minor changes to PBGC's regulation on Mergers and Transfers Between Multiemployer Plans. The major change is the addition of procedures and information requirements for a voluntary request for a facilitated merger to implement MPRA's changes to section 4231 of ERISA. This final rule also reorganizes and updates existing provisions of PBGC's regulation." (Pension Benefit Guaranty Corporation [PBGC])
AICPA Working Draft of Chapter on Multiemployer Benefit Plans (PDF)
149 pages. "[This working draft has] been developed by the AICPA Multiemployer Plans Task Force to assist preparers of multiemployer plan financial statements in preparing [those] financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP) and to assist auditors in auditing and reporting on such financial statements in accordance with generally accepted auditing standards." (American Institute of Certified Public Accountants [AICPA])
Considerations When Adding Participant Loans to a Taft-Hartley Defined Contribution Plan (PDF)
"In a corporate DC plan, loan payments are predominantly made through payroll deductions. Taft-Hartley plans normally do not offer this repayment option due to employers of the plan not being involved in the loan process.... As a result of leaving the option to make payments in the participant's hands, potential for the loan to default in a Taft-Hartley plan can be much higher than in a corporate plan." (Milliman)
Treasury Department Approves Two Multiemployer Applications to Cut Benefits
"Western States Office and Professional Employees Pension Fund ... submitted its third application ... to reduce benefits 30% for active participants, terminated vested participants and retirees under the age of 80, to avoid insolvency that was projected to happen by 2036.... Iron Workers Local 16 Pension Fund ... reapplied ... to reduce benefits starting Oct. 1. Without the reductions -- an average of 20% in benefit cuts -- it is projected to be insolvent by 2032.... Officials at both plans were notified ... that final authorization will happen after plan participants vote on the proposed plan[.]" (Pensions & Investments)
[Official Guidance] Text of PBGC Submission for OMB Approval: Survey of Multiemployer Pension Plan Withdrawal Liability Information
"PBGC is proposing to collect information about withdrawal liability that is owed by withdrawn employers of terminated and insolvent multiemployer pension plans.... On June 21, 2018, PBGC published a notice of its intent to request OMB approval of [a] survey of multiemployer pension plan withdrawal liability information ... No comments were received on the proposed submission of information collection. PBGC is requesting that OMB approve PBGC's use of this survey for three years." (Pension Benefit Guaranty Corporation [PBGC])
[Official Guidance] Treasury Department Notice of Multiemployer Pension Plan Application to Reduce Benefits: Laborers Local 265 Pension Plan
"The Board of Trustees of the Laborers Local 265 Pension Plan, a multiemployer pension plan, has submitted an application to reduce benefits under the plan in accordance with the Multiemployer Pension Reform Act of 2014 (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[.]" (U.S. Department of the Treasury)
[Guidance Overview] PBGC Issues Policy Statement on Calculating Withdrawal Liability
"[M]ore and more requests have been made to the PBGC to review proposals to adopt alternative terms and conditions to satisfy withdrawal liability in advance of a potential mass withdrawal.... PBGC is now required to perform case-by-case reviews and must review different contingencies with different probabilities of occurrence.... This published policy statement is, therefore, a way of informing all future parties to a proposed revision to a withdrawal liability payment scheme to understand what concerns the PBGC will likely have, so that time and resources for all parties can be minimized." (October Three Consulting)
PBGC Staff Express Concern Over Premium Reduction Strategy (PDF)
"Successful implementation of the two-step strategy could result in significant savings in PBGC premiums ... Plan sponsors essentially receive a full year of PBGC coverage, but only pay a partial year of premiums.... [T]he only purpose of the transaction appears to be avoiding PBGC premiums. While there is nothing inherently wrong with wanting to reduce PBGC premiums, it's not surprising to hear the PBGC push back on strategies which serve no other purpose." (Lockton)
[Official Guidance] Text of Treasury Department Letter Approving Ironworkers Local 16 Pension Fund Application for Reduction of Benefits (PDF)
"Treasury has determined that the Plan is eligible to reduce benefits under MPRA and that your application satisfies the requirements of ... section 432(e)(9) ... as added by MPRA. This notification is not a final authorization to implement the benefit reduction described in your application.... [N]o reduction of benefits can take effect before a vote of the participants and beneficiaries of the Plan with respect to the proposed reduction." (U.S. Department of the Treasury)
U.S. Multiemployer Pension Plan Withdrawal Liability Basics and Collectibility (PDF)
12 pages. "Federal law allows various methods for determining withdrawal liability ... To mitigate the withdrawing employer's burden to pay a large withdrawal liability all at once, the law allows payment over time. In general, the annual payment is intended to approximate the withdrawing employer's history of annual contributions to the plan. In reality, ... actual withdrawal liability payments are typically greater than the employer's history of contributions." (Society of Actuaries)
'Windfall' Recovery No Defense Under ERISA to Funds' Claim for Unpaid Contributions
"The employer ... had maintained health insurance and a 401(k) plan for its nonunion employees [outside the funds to which it had not made contributions]. These alternative benefits should offset the total award to the funds, the employer said. Otherwise, the employer reasoned, the funds would receive an unjust windfall recovery of contributions on behalf of employees for whom they had provided no benefits. The appellate court rejected this argument and affirmed the lower court's judgment in favor of the funds." [Kelly v. Gas Field Specialists, Inc., No. 17-2654 (3d Cir. June 19, 2018)] (Wolters Kluwer Law & Business)
Expanding Multiemployer Health Plan Coverage to Non-Bargaining Unit Employees
"Employers that contribute to multiemployer health plans on behalf of unionized employees often find it difficult to offer competitive health coverage to their nonunion employees. This is particularly true where an employer's nonunion workforce is small compared to its union workforce.... [A] large multiemployer health plan can typically offer competitive coverage because of the size of the covered group. And as long as some basic requirements are met, a multiemployer plan can extend the plan's coverage to (or create an entirely different tier of coverage for) employees who are not performing bargaining unit work." (Morgan Lewis)
A Tale of Two Teamsters Pension Plans
"Central States is among the approximately 130 plans that have projected they will run out of money in the next 20 years. That means the plan's members could lose their pension benefits. The Western Conference, on the other hand, is close to fully funded and in a good position to pay out pension benefits. So how did these two plans that were set up to provide pensions to workers in the trucking industry end up in opposite positions?" (Bloomberg BNA)
Data on Multiemployer Defined Benefit Pension Plans (PDF)
22 pages. "This report provides data on multiemployer DB plans ... First, the report categorizes the data based on plans' zone status in 2015. Next, it provides a year-by-year breakdown of the number of plans that are expected to become insolvent and the number of participants in those plans.... Finally, the report provides data on those employers whose plans indicate contributed more than 5% of the plans' total contributions ... in the 2015 plan year[.]" [R45187, July 26, 2018] (Congressional Research Service [CRS])
Health and Welfare Trusts Seek Increased Guidance Regarding Continuation Value (PDF)
"A variety of methods can be utilized to assess the financial status of a health and welfare trust. One of the most common methods is to estimate continuation value, or the amount of time that the trust can continue to cover the cost of benefits to its participants and pay for associated administrative, operating, and professional expenses, assuming no future income.... But what level of continuation value should a health and welfare trust target? While the question is common, the answer is complex and requires assessment and understanding of a variety of factors" (Milliman)
[Guidance Overview] Meeting of the American Academy of Actuaries Multiemployer Plans Committee and Representatives from the Department of the Treasury, PBGC, and DOL (PDF)
14 pages; meeting held Feb. 23, 2018. Topics discussed: [1] Denials and withdrawals to date; [2] Reasonableness of actuarial assumptions; [3] Application review process; [4] Pre-application conferences; [5] Revenue Procedure 2017-43; [6] Non-standard mortality assumptions; [7] Resubmission considerations; [8] Investment return assumptions; [9] PBGC discussion topics. In addition, this document includes notes from follow-up discussions with Treasury that occurred after the meeting on two topics: [1] Investment return assumptions; and [2] Survivorship bias in assumed new entrants. (American Academy of Actuaries)
UPS Retirees Bring First Challenge to Legality of Pension Cuts under MPRA
"The lawsuit is the first to challenge the Multiemployer Pension Reform Act [MPRA] ... [which] allows a multiemployer plan to request Treasury's approval to cut benefits if the plan shows that doing so would avoid insolvency. The retirees seek to hold the U.S. government liable for engaging in an 'uncompensated taking of their property' by authorizing -- through the Treasury -- those pension cuts. The retirees, who participate in the New York State Teamsters Conference Pension and Retirement Fund, seek to represent 21,250 similarly situated workers." [King v. U.S., No. 18-1115 (Fed. Cl., complaint filed July 31, 2018)] (Bloomberg BNA)
PBGC Proposes Valuation and Notice Requirements for Insolvent Multiemployer Plans
"Insolvent plans receiving financial assistance (whether terminated or not) and plans terminated by plan amendment that are expected to become insolvent could generally perform actuarial valuations less frequently than currently required. Additionally, the proposal would eliminate some notice requirements for insolvent plans." (Conduent)
Retired UPS Workers File Lawsuit Challenging Treasury Department Approval of Pension Cuts under MPRA (PDF)
"Three retired UPS workers filed a lawsuit today against the federal government on behalf of themselves and a proposed class of approximately 22,000 other retirees. The suit alleges that the government acted to protect its own financial interests when it enabled a pension plan to cut each Plaintiffs' pension by 29%, reducing the likelihood that the government-run [PBGC] would go insolvent. The suit revolves around the Department of Treasury's controversial decision from September 2017 to permit a New York pension fund to reduce each Plaintiff 's monthly pension payment -- an amount that had fully vested and for which the PBGC was the insurer if the fund defaulted." [King v. U.S. (Fed. Cl., complaint filed July 31, 2018)] (Messing & Spector LLP)
[Official Guidance] Four Multiemployer Plans Submit Applications to Reduce Benefits Under MPRA
The Treasury Department has announced submission of benefit reduction applications, and posted those applications, for four multiemployer plans: (U.S. Department of the Treasury)
Segal Blend Rejected as Discount Rate for Determining Withdrawal Liability
"The Segal Blend is not prohibited as a matter of law, but [the court found it] was inappropriately applied as it was lower than the actuary's best estimate of anticipated plan experience in the long-term and included interest rates for assets that were not included in the Fund's portfolio." [The New York Times Co. v. Newspapers & Mail Deliverers'-Publishers' Pension Fund, No. 17-6178 (S.D.N.Y. Mar. 26, 2018)] (Wolters Kluwer Law & Business)
How the Multiemployer Pension System Affects Stakeholders
Video of hearing held July 25, 2018. Testimony from witnesses: [1] Mr. James P. Naughton, Northwestern University; [2] Mr. Joshua D. Rauh, Ph.D., Hoover Institution, Stanford University; [3] Mr. Kenneth Stribling, Retired Teamster; [4] Mr. Timothy P. Lynch, Morgan, Lewis & Bockius LLP. (Joint Select Committee on Solvency of Multiemployer Pension Plans)
[Guidance Overview] PBGC Issues Policy Statement on Alternative Terms and Conditions to Settle Withdrawal Liability
"[As] a general policy goal in evaluating a proposal, the PBGC looks to whether the trustees have supported their conclusion that the proposed alternative terms and conditions would 'realistically maximize' the collection of withdrawal liability and projected contributions relative to the withdrawal liability rules under ERISA. The PBGC must be convinced that the alternative terms are in the interests of participants and beneficiaries, do not create an unreasonable risk of loss to the PBGC insurance program, and are otherwise not inconsistent with Title IV of ERISA." (Segal Consulting)
[Official Guidance] Mid-Jersey Trucking Industry and Local No. 701 Pension Fund Applies for Approval to Reduce Benefits under MPRA
"The Board of Trustees of the Mid-Jersey Trucking Industry and Local No. 701 Pension Fund ... has submitted an application to reduce benefits under the plan in accordance with [MPRA] The purpose of this notice is to announce that the application ... has been published on the website of the Department of the Treasury, and to request public comments on the application from interested parties[.]" (U.S. Department of the Treasury)
[Official Guidance] Southwest Ohio Regional Council of Carpenters Pension Plan Applies for Approval to Reduce Benefits under MPRA
"The Board of Trustees of the Southwest Ohio Regional Council of Carpenters Pension Plan ... has submitted an application to reduce benefits under the plan in accordance with [MPRA] The purpose of this notice is to announce that the application ... has been published on the website of the Department of the Treasury, and to request public comments on the application from interested parties[.]" (U.S. Department of the Treasury)
[Official Guidance] Toledo Roofers Local No. 134 Pension Plan Applies for Approval to Reduce Benefits under MPRA
"The Board of Trustees of the Toledo Roofers Local No. 134 Pension Plan ... has submitted an application to reduce benefits under the plan in accordance with [MPRA] The purpose of this notice is to announce that the application ... has been published on the website of the Department of the Treasury, and to request public comments on the application from interested parties[.]" (U.S. Department of the Treasury)
[Official Guidance] Local 807 Labor-Management Pension Plan Applies for Approval to Reduce Benefits under MPRA
"The Board of Trustees of the Local 807 Labor-Management Pension Plan ... has submitted an application to reduce benefits under the plan in accordance with [MPRA] The purpose of this notice is to announce that the application ... has been published on the website of the Department of the Treasury, and to request public comments on the application from interested parties[.]" (U.S. Department of the Treasury)
Withdrawal Liability Discount Rates: Two Courts, Two Different Views
"In reviewing the economics of a multi-employer plan withdrawal, an employer will want to consider the plan's withdrawal liability valuation policy. But it should be understood that there is (generally) nothing preventing the plan from changing that policy. Even though there are a number of procedural rules applicable to the review of a plan's determination of withdrawal liability that favor the plan, the result in [one recent case] is evidence that an employer can win a withdrawal liability dispute." [The New York Times Co. v. Newspapers & Mail Deliverers'-Publishers' Pension Fund, No. 17-6178 (S.D.N.Y. Mar. 26, 2018)] (October Three Consulting)
[Guidance Overview] PBGC Proposes to Amend Valuation, Reporting, and Disclosure Regs for Terminated and Insolvent Multiemployer Plans
"The proposed regulations would reduce the number of plans that are required to prepare an annual actuarial valuation by increasing the monetary threshold from $25 million to $50 million.... The proposed regulations would add the annual actuarial valuation requirement for: [1] Insolvent plans (active and terminated) receiving financial assistance from the PBGC. [2] Plans terminated by plan amendment that are expected to become insolvent." (Thomson Reuters Practical Law)
PBGC Reports Multiemployer Program Continues to Face Insolvency by 2025
"Consistent with findings in last year's Report, the multiemployer program is likely to become insolvent by the end of fiscal year 2025 without changes in the law or additional resources. The Agency's single-employer pension program continues to improve and is likely to eliminate its deficit sooner than previously anticipated." (Wolters Kluwer Law & Business)
[Opinion] Inspiring Trip to Columbus Brings Hope for Multiemployer Solution
"[H]undreds of activists headed to the Joint Select Committee on the Solvency of Multiemployer Pension Plans' hearing ... The hearing was held in Ohio because thousands of workers and retirees in the state would be devastated by reduced pensions, and hundreds of employers could be forced into bankruptcy." (Pension Rights Center)
CBO Preliminary Analysis of S.2147, the Butch-Lewis Act of 2017, as Introduced
"The estimated budgetary effects are highly uncertain because several key aspects of the legislation are broadly described ... CBO [previously] provided a preliminary and partial analysis ... that the bill would probably increase deficits by more than $100 billion over the 2019-2028 period. Under some interpretations of the bill language, however, few plans would qualify for loans and assistance, resulting in federal costs that would be substantially less than $100 billion." (Congressional Budget Office [CBO])
[Official Guidance] Text of PBGC Proposed Regs: Terminated and Insolvent Multiemployer Plans and Duties of Plan Sponsors
"[PBGC] proposes to amend its multiemployer reporting, disclosure, and valuation regulations to reduce the number of actuarial valuations required for smaller plans terminated by mass withdrawal, add a valuation filing requirement and a withdrawal liability reporting requirement for certain terminated plans and insolvent plans, remove certain insolvency notice and update requirements, and reflect the repeal of the multiemployer plan reorganization rules." (Pension Benefit Guaranty Corporation [PBGC])
District Court Affirms Withdrawal Liability Calculations, But Appears to Leave an Opening
"What this opinion specifically does not say, however, is that the [plan's enrolled actuary's] judgment is infallible or indisputable. While the opinion did not address this, that the statute gives withdrawing employers the ability to challenge withdrawal liability calculations suggests that ERISA contemplates that there are, in fact, valid challenges. What might they be?" [Manhattan Ford Lincoln, Inc. v. UAW Local 259 Pension Fund, No. 17-5076 (D.N.J. July 3, 2018)] (Benefits and Compensation with John Lowell)
Thousands of Workers and Retirees Head to Ohio July 12 to Protest Pension Cuts and Pressure Congress to Act
"The rally is being organized to coincide with a field hearing that will be convened in Columbus on Friday, July 13th by members of the Joint Select Committee on the Solvency of Multiemployer Plans. The Joint Select Committee, created by Congress in a bi-partisan budget deal last February, is charged with developing a consensus solution to the multiemployer pension crisis affecting families across America." (Pension Rights Center)
[Opinion] Multiemployer Pension Alliance Letter to Joint Select Committee on the Solvency of Multiemployer Pensions (PDF)
"A well-designed loan program can save the most troubled plans and the PBGC's insurance program.... Interest rate assumption rules did not cause the solvency crisis facing troubled plans and are not an appropriate 'lever' to avoid future crises.... Sound multiemployer plans cannot pay for the administration's PBGC premium proposal without sustaining substantial harm.... PBGC premium increases do not -- and are not intended to -- address the solvency crisis facing troubled plans." (Multiemployer Pension Alliance)
District Court Affirms Use of 'Segal Blend' to Calculate Withdrawal Liability
"[The court] upheld the arbitrator's findings that the use of funding assumptions is not required in calculating withdrawal liability and that Manhattan Ford Lincoln, Inc. failed to demonstrate that the actuary's selection of the Segal Blend rate for purposes of that calculation was unreasonable. This decision is consistent with every other decision handed down in similar cases except for one since 1980 when withdrawal liability became part of [ERISA]." [Manhattan Ford Lincoln, Inc. v. UAW Local 259 Pension Fund, No. 17-5076 (D.N.J. July 3, 2018)] (Segal Consulting)
The Appropriateness of the Current Assumptions Used for Funding Multiemployer Pension Plans (PDF)
"[T]he possibility of using more conservative interest rates for valuing multiemployer plan liabilities has been raised.... [T]he increase in the necessary contributions to meet current funding standards would not be sustainable for either of the plans studied, both of which are currently considered healthy. In fact, a change to a considerably lower discount rate would create a much greater pension crisis than the one that already exists." (Segal Consulting)
[Official Guidance] Text of PBGC Request for Comments on Multiemployer Plan Regulations
"(PBGC) intends to request that the Office of Management and Budget (OMB) extend approval, under the Paperwork Reduction Act, of collections of information in PBGC's regulations on multiemployer plans ... This notice ... solicits public comment on the collections of information.... [1] Termination of Multiemployer Plans (29 CFR part 4041A).... [2] Notice of Insolvency (29 CFR part 4245).... [3] Duties of Plan Sponsor Following Mass Withdrawal (29 CFR part 4281)." (Pension Benefit Guaranty Corporation [PBGC])
The Multiemployer Pension System: An Analysis of Cohort Equity (PDF)
10 pages. "Cohorts that retired before 2003 will experience, or have already experienced, an average [internal rate of return (IRR)] in excess of 9%. As a result of contribution increases without commensurate benefit increases, a dramatic decline in IRR began in 2003. For a typical plan, the marginal IRR ... declined from over 6% in 2002 to about 2% in 2015.... A plan that avoids insolvency and manages to gradually pay-down its funding deficit could, in the long run, reduce its contributions or raise its benefits, leading to a rebound in the marginal IRR." (The Pension Analytics Group)
The Impact of Alternative Discount Rates on Multiemployer Pension Plan Funding (PDF)
13 pages. "This study uses the latest available Form 5500 data for all multiemployer plans to explore the impact of using alternative discount rates on the multiemployer pension plan system ... The overall funded percentage of the multiemployer system is 73% when measured with current discount rates. This funded percentage falls to 51% if liabilities are determined using corporate bond rates, and to 43% when using 30-year Treasury rates." (Horizon Actuarial Services LLC)
Looking at an Expanding Landscape: Multiemployer Plan Withdrawal Liability
"During the due diligence process, asset purchasers should inquire about the existence of union employees participating in multiemployer plans. If such a plan exists, asset purchasers should review union agreements, plan documents, and any withdrawal liability estimates prepared by the multiemployer plan. Armed with this knowledge, an asset purchaser may negotiate purchase price adjustments, indemnities, or escrow accounts to minimize its financial and legal exposure." [Heavenly Hana LLC v. Hotel Union & Hotel Industry of Hawaii Pension Plan, No. 16-15481 (9th Cir. June 1, 2018)] (Foley & Lardner LLP)
UPS, Teamsters Reach Tentative Deal on Master Contract
"The union said it 'negotiated substantial increases to the employer contributions to the various benefit funds, and increased pension benefits under the part-time UPS Pension Plan and the full-time UPS/IBT Pension Plan.' It's not yet clear what those contributions will look like." (Bloomberg BNA)
[Official Guidance] Text of PBGC Proposal for Survey of Multiemployer Pension Plan Withdrawal Liability Information
"The [PBGC] intends to request that OMB approve, under the Paperwork Reduction Act, a survey of terminated and insolvent multiemployer pension plans to obtain withdrawal liability information. PBGC needs the withdrawal liability information to estimate its multiemployer program liabilities for purposes of its financial statements. This notice informs the public of PBGC's intent and solicits public comment on the collection of information." (Pension Benefit Guaranty Corporation [PBGC])
[Opinion] Testimony of U.S. Chamber of Commerce to Joint Select Committee on Multiemployer Pension Plans: Employer Perspectives
"[R]escue legislation is urgently needed. Congress can no longer kick the can down the road.... Our recommendation is for long-term, low-interest loans that will protect taxpayers from financial liability.... [W]hile the PBGC may ultimately need more money, in the form of increased premiums paid by employers, these increases must be evaluated after tools to restore the solvency of these plans are put in place.... [C]omposite plans must be authorized so that healthy multi-employer plans can stay that way." (U.S. Chamber of Commerce)
The Multiemployer Pension Plan Crisis: Businesses and Jobs at Risk (PDF)
15 pages. "The funding problems that currently exist are unprecedented in the more than 70 years that these plans have been in existence. While most of the focus, and rightly so, has been on the catastrophic effect pension plan insolvencies will have on plan participants ... the employers that employ these participants (and in many cases, that employ many more people than just the plan participants) are at extreme risk of being put out of business." (U.S. Chamber of Commerce)
Ninth Circuit's Expansion of Successor Liability May Make Asset Purchases More Costly
"Purchasers can no longer rely on the representations of sellers regarding the funded status of multiemployer pension plans and whether withdrawal liability exists. Under a constructive notice standard, asset purchasers are deemed to have knowledge of facts which reasonable care or diligence would disclose." [Heavenly Hana LLC v. Hotel Union & Hotel Industry of Hawaii Pension Plan, No. 16-15481 (9th Cir. June 1, 2018)] (Ogletree Deakins)
[Official Guidance] Text of Treasury Department Letter Authorizing Benefit Reductions for Alaska Ironworkers Pension Plan (PDF)
"Because a majority of voters identified as eligible by the Plan did not vote to reject the benefit reduction, the benefit reduction is permitted to go into effect. Treasury, in consultation with DOL and PBGC, has issued a final authorization to reduce benefits under the Plan as described in the Application, effective July 1, 2018, subject to the conditions described [in this letter]." (U.S. Department of the Treasury)
[Official Guidance] Treasury Department Notice of Multiemployer Pension Plan Application to Reduce Benefits: Western States Office and Professional Employees Pension Fund
"The Board of Trustees of the Western States Office and Professional Employees Pension Fund (WSOPE Pension Fund), a multiemployer pension plan, has submitted an application to reduce benefits under the fund in accordance with [MPRA].... [which] has been published on the website of the Department of the Treasury ... [C]omments on the application [are requested] from interested parties, including participants and beneficiaries, employee organizations, and contributing employers of the WSOPE Pension Fund." (U.S. Department of the Treasury)
Ninth Circuit Holds Constructive Notice Sufficient for Successor Withdrawal Liability
"[The Court] suggested how, with some diligence, the asset purchaser could have determined the seller's potential withdrawal liability. This decision is the latest evidence of the strong trend extending the availability of the successor liability doctrine to impose successor withdrawal liability on asset purchasers." [Heavenly Hana LLC v. Hotel Union & Hotel Industry of Hawaii Pension Plan, No. 16-15481 (9th Cir. June 1, 2018)] (Jackson Lewis P.C.)
American Academy of Actuaries' Answers to Questions Posed by Joint Select Committee on Multiemployer Plans (PDF)
39 pages. "On behalf of the Pension Practice Council of the American Academy of Actuaries, I appreciate the opportunity to provide the following responses for the record to questions provided us pursuant to [April 18, 2018 hearing on] The History and Structure of the Multiemployer Pension System[.] ... The Pension Practice Council ... stands ready to help you at each step of the way with objective and nonpartisan input." [Editor's note: Includes more than 40 questions from legislators, with detailed answers.] (American Academy of Actuaries)
Ninth Circuit Holds That Constructive Notice Is Sufficient to Impose Withdrawal Liability on Successor Employer Under MPPAA
"The Ninth Circuit held that Amstar was on constructive notice of Ohana's withdrawal liability ... [and] identified three relevant facts to support this holding: [1] Amstar previously operated a hotel that participated in a multiemployer pension plan, and, in earlier acquisitions involving multiemployer pension plans, Amstar had sought to determine whether it could incur withdrawal liability. [2] The purchase and sale agreement stated that the employees at Ohana were unionized and that Ohana had contributed to a multiemployer pension plan. [3] The Plan's annual funding notices, indicating that the Plan was underfunded, were publicly available on the internet." [Heavenly Hana LLC v. Hotel Union & Hotel Industry of Hawaii Pension Plan, No. 16-15481 (9th Cir. June 1, 2018)] (Thomson Reuters Practical Law)
GAO Report: DOL Activities Under the Central States Pension Fund's Consent Decree and Federal Law
"Since 1982, the plan has operated under a court-enforceable consent decree which, among other things, requires that the plan's assets be managed by independent parties. Within 7 years, CSPF estimates that the plan's financial condition will require severe benefit cuts. GAO was asked to review the events and factors that led to the plan's critical financial status and the oversight DOL provides under the consent decree and under other federal laws." [GAO-18-105, Jun. 4, 2018] (U.S. Government Accountability Office [GAO])
GAO Report: Investment Policy Decisions and Challenges Facing the Central States Pension Fund
"GAO found that CSPF's investment returns and expenses were generally in line with similarly sized institutional investors and with demographically similar multiemployer pension plans.... In addition, GAO found that CSPF's investment fees and other administrative expenses have also been in line with other large multiemployer plans." [GAO-18-106, Jun. 4, 2018] (U.S. Government Accountability Office [GAO])
Most 2018 Calendar-Year Multiemployer Plans Are in the Green Zone (PDF)
"90% of plans are not in critical and declining (C&D) status.... Nearly two-thirds of plans in the survey have a Pension Protection Act of 2006 (PPA '06) funded percentage above 80%, and more than one-quarter of plans in the survey are fully funded on that basis." (Segal)
[Official Guidance] Text of PBGC FY 2017 Projections Report (PDF)
54 pages. "This year's projections for PBGC's Multiemployer Program show a very high likelihood of insolvency during FY 2025 and near certainty of insolvency by the end of FY 2026. Compared to last year's projections, the risk of insolvency decreases slightly prior to fiscal year 2024 but increases significantly starting in fiscal year 2025. These changes are primarily the result of the largest troubled plan transitioning to a 100% fixed-income portfolio, which eliminates most of the uncertainty of the timing of its projected insolvency date and thus eliminates most of the uncertainty about when the plan will require PBGC financial assistance....

"New results for PBGC's Single-Employer Program are generally consistent with findings of the prior year's report but the financial status of the program is likely to improve faster and reach a higher net surplus position compared to the projections from last year. Recent increases in asset returns and decreases in expected future claims increase the likelihood that the program will reach net surplus a few years earlier than previously projected." (Pension Benefit Guaranty Corporation [PBGC])

PBGC Projections: Multiemployer Program Insolvent in FY 2025
"The [PBGC's] Multiemployer Insurance Program continues to face insolvency by the end of fiscal year 2025, according to findings in the FY 2017 Projections Report.... The likelihood that the Multiemployer Program will run out of money before the end of FY 2025 has grown to over 90 percent, and there remains a significant chance the program will run out of money during FY 2024. The likelihood the program will remain solvent after FY 2026 is now less than 1 percent.... PBGC's Single-Employer Program, which covers about 28 million participants, continues to improve and is likely to emerge from deficit sooner than previously anticipated." (Pension Benefit Guaranty Corporation [PBGC])
 
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