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News Items, by Subject

Multiemployer plans

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[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])
Private Equity Seeks Second Chance on ERISA Liability Ruling
"Trilantic sued in federal court asking for a ruling that it wasn't an employer in the same controlled group as Angelica Corporation. It claimed the fund was merely a passive investor that acted consistently with that role as a shareholder ... The Trilantic case is pending in a different jurisdiction than the Sun Capital case ... The ultimate issue then comes down to a matter of degree how much control, involvement, or economic benefit does it take to become a trade or business as opposed to a passive investor." (Kaufman & Canoles, P.C.)
PBGC Director Says Failed Multiemployer Plan Members May Receive Only Fraction of PBGC Minimum
"When asked if the PBGC would be able provide the minimum guaranteed benefit to failed plan members without congressional action, [PBGC Director Thomas Reeder] said 'no,' adding that the PBGC would have to cut it to about one-eighth the minimum benefit, or less.... Reeder said that without help from Congress, propping up the PBGC could cost taxpayers $16 billion over 10 years, and that would only keep the organization going for another 20 years." (Chief Investment Officer [CIO])
[Opinion] The Politics of Pensions in America
"To give the committee a chance to work out of the political glare, it will not report until after the midterm elections. Furthermore, any proposal supported by a majority both of Republicans and Democrats will get an automatic up or down vote in the Senate. Nonetheless, getting any compromise will be very difficult because in every case, the proposals made by one constituency are political poison to another.... [T]he collapse of these pension funds could end up doing as much or more damage than Hurricane Harvey." (Former PBGC Director Joshua Gotbaum, via The Brookings Institution)
Democrat Senators Question Trump's Nomination for PBGC Director in Midst of Multiemployer Plan Crisis
"The president has nominated Gordon Hartogensis -- who, the senators say, seems to have little to no prior experience relevant to the pension system and the work of the PBGC -- to replace Reeder. Meanwhile Reeder, who is in the middle of his five-year term, has been advocating for changes to help the PBGC's programs, especially the program for multiemployer defined benefit (DB) plans." (planadviser)
[Opinion] Why We Need Multiemployer Pension Reform (PDF)
"Since the passage of [MPRA], 19 multiemployer plans have applied to the Treasury Department... to cut their workers and retirees' benefits by as much as 50-70%. Five have been rejected; five have been approved, five are under consideration and the rest have been withdrawn.... [T]here are about 130 additional plans are eligible to apply to cut their retirees ' and workers' benefits ... This could affect up to 1.5 million workers and retirees.... [T]he Butch Lewis Act [S.2147] ... and its House companion bill the 'Rehabilitation of Multiemployer Pension Act' [H.R.4444] ... provide a common-sense way of shoring up funding in severely troubled multiemployer plans." (Pension Rights Center)
Joint Select Committee on Multiemployer Pensions Meets Again in Educational Session on the PBGC (PDF)
"[PBGC Director Thomas Reeder] noted that if Congress does nothing and the PBGC's multiemployer insurance system becomes insolvent, it would be able to provide only about one-eighth or 12.5% of the already low benefit that it guarantees to pay.... Co-Chair Brown announced that the Select Committee would hold two more hearing in June and two more in July and hopes that serious negotiating on a legislative solution would begin this coming July." (United Actuarial Services, Inc.)
Nabisco Offers $15,000 to Each Union Worker, Wants to Replace DB Pension with 401(k) Plan
"To end a two-year contract standoff with about 2,000 union members at its six Nabisco bakeries in the U.S., Mondelez International is offering to triple its proposed contract ratification bonus to $15,000 per employee. All workers would have to do to get that money is ... let the company withdraw from their union's pension plan and reduce their health insurance benefit.... The offer expires at midnight May 20." (People's World)
[Opinion] Government Money Should Help Solve This Pension Crisis
"[T]he government has not established a meaningful insurance program for participants in bankrupt multiemployer plans.... [T]he 'crisis' of multiemployer plans is really about one plan: Central States Teamsters. If not for the imminent failure of Central States, moderate reforms to the PBGC multiemployer program and withdrawal liability procedures could right the multiemployer retirement system." (Alicia Munnell, via MarketWatch)
Multiemployer Pension Funding a Big Challenge for PBGC, Wider Economy
"Multiemployer pension plan insolvencies will obviously be harmful to the participants and beneficiaries of the plans in question, but the loss of the significant economic momentum provided by retirees spending their pension plan assets could also harm the wider economy." (planadviser)
Some Union Retirees Could See Pension Benefits Cut 90%, PBGC Chief Warns
"During the joint House-Senate committee hearing, [PBGC Director Tom Reeder] said the PBGC's multiemployer insurance fund was running a $65 billion deficit with only $2 billion in assets. The program, which covers 10 million participants and their families in 1,400 plans, is projected to go insolvent in 2025 without a legislative fix. It will be soon paying out more in insurance benefits than it is taking in from employers in premiums, Reeder said." (Forbes)
Projected Impact of Pending Insolvency on 115 'Critical and Declining' Multiemployer Pension Plans, Their Participants and Contributing Employers
"The authors project that 107 plans will run out of assets over the next 20 years, affecting over 11,000 contributing employers and roughly 875,000 participants.... The estimated 2018 unfunded liability for these 115 plans, as measured on a minimum funding basis, is $57 billion. When measured at 2.90%, it is $108 billion.... The timing of solvency can be sensitive to investment returns.... In 2018, 81 of the plans have annual negative net cash flow that is 10% or more of their assets. In other words, unless these plans' assets earn at least 10% per year, the assets will decline.... Pending insolvencies are largely a function of existing liabilities for benefits that have already been accrued." (Society of Actuaries)
Multiemployer Plan Committee to Examine Financial State of PBGC
"Joint Select Committee on the Solvency of Multiemployer Pension Plans Co-Chairmen Orrin Hatch (R-Utah) and Sherrod Brown (D-Ohio) ... announced they will convene a hearing on Thursday, May 17, 2018, to examine the state of the [PBGC].... The [sole] witness ... will be Thomas Reeder, Executive Director of the PBGC." (Joint Select Committee on Solvency of Multiemployer Pension Plans)
Multiemployer Pension Funded Status Improves During 2017 (PDF)
"The estimated 2017 calendar year investment return for our simplified portfolio was about 16%, more than double the investment return assumption of most plans. The aggregate market value funded percentage improved from 81% to 83% over the last six months, compared to 85% a decade ago. For noncritical plans, the aggregate funded percentage was 93% compared with 90% a decade ago.... The aggregate funded percentage for critical plans was 60% as of December 31, 2017. These plans had a 76% funded status ratio a decade ago." (Milliman)
[Opinion] When Multiemployer and Public Pension Funds Run Out of Money
"[T]he problem with all these [multiemployer] pension plans is they weren't conceived properly to begin with and they definitely weren't managed properly. Unions promised their members generous pensions they knew were unsustainable and they did a lousy job managing these pensions, doling out huge fees to Wall Street sharks which delivered mediocre long-term results." (Pension Pulse)
Central States Pension Fund Says It Will Be Insolvent by 2025
"[Executive Director Thomas Nyhan] said the fund held $15 billion at the end of March, but annually pays out $2 billion more than it takes in.... Central States is selling off much of its stock investments and other holdings that could generate higher returns and delay the insolvency but also carry the risk of losses that would push the fund into insolvency sooner. It is investing the proceeds from those sales in low-risk bonds and cash-like holdings." (Kansas City Star)
Loan Programs for Underfunded Multiemployer Plans (PDF)
"[Recent proposals] would authorize either direct government loans, or government-guaranteed loans issued by third parties, to troubled multiemployer plans in an effort to help them return to financial stability.... This issue brief discusses the ways in which a loan program could benefit troubled plans and their participants, and also addresses the costs and risks associated with these proposals." (American Academy of Actuaries)
[Opinion] Worst-Funded 'Nonendangered' Multiemployer Plans
"These were the four multiemployer plans with the largest unfunded liabilities based on 2015 data ... Central States ... admits to being in risk category D (Critical and Declining) while the next three report their status as N (Not Endangered or Critical). Is that really the case or are they playing games with actuarial assumptions?" (Burypensions)
[Official Guidance] Text of Treasury Department Letter Approving Benefits Reductions by Alaska Ironworkers Pension Plan (PDF)
"In consultation with the [DOL and the PBGC], Treasury has determined that the Plan is eligible to reduce benefits under MPRA and that your application satisfies the requirements of subparagraphs (C), (D), (E), and (F) of section 432(e)(9) of the Internal Revenue Code, as added by MPRA.... Accordingly, Treasury, in consultation with DOL and PBGC, will administer a vote of the participants and beneficiaries of the Plan." (U.S. Department of the Treasury)
Data on Multiemployer Defined Benefit Pension Plans (PDF)
15 pages. "This report provides data on multiemployer DB plans categorized in several ways. 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 information on the 25 largest multiemployer DB plans in 2015 (each plan has at least 75,000 participants)." [Report R45187, May 1, 2018] (Congressional Research Service [CRS])
The Just Born Case: Responding to the Multiemployer Pension Crisis
"The Just Born case is much more than a delinquent contribution collection case. It deals with the interaction of the MPRA, the National Labor Relations Act, the Taft-Hartley Act and the PPA -- implications of which the court barely discussed. The case also illustrates tactics the Pension Fund and Just Born used to mitigate the looming insolvency crisis facing many badly underfunded multiemployer pension plans (MEPPs) and the employers participating in those MEPPs." [Bakery & Confectionary Union & Industry Int'l Pension Fund v. Just Born II, Inc., No. 17-1369 (4th Cir. Apr. 26, 2018)] (McGuireWoods)
PBGC Releases Strategic Plan for 2018-2022
"The PBGC has identified five priorities to effectively manage its insurance programs.... They include: [1] Encouraging continuation and maintenance of voluntary private pension plans for the benefit of their participants; [2] Enhancing production quality and reducing the inventory of unissued benefit determination letters; [3] Completing implementation of enterprise risk management; [4] Addressing workforce challenges to prevent an impact on the PBGC's ability to carry out its mission; and [5] Continuing to improve the internal control environment." (Wolters Kluwer Law & Business)
[Official Guidance] Treasury Department Notice of Multiemployer Pension Plan Application to Reduce Benefits: Plasterers Local 94 Pension Fund
"The Board of Trustees of the Plasterers Local 94 Pension Fund, a multiemployer pension plan, has submitted an application to reduce benefits under the plan in accordance with [MPRA].... [T]he application ... has been published on the website of the Department of the Treasury ... [P]ublic comments on the application [are requested] from interested parties, including participants and beneficiaries, employee organizations, and contributing employers[.]" (U.S. Department of the Treasury)
Private Equity Seeks Second Chance on ERISA Liability Ruling
"The court could send the matter to arbitration, which is the standard method for resolving multiemployer plan withdrawal liability. It could hear the case and distinguish its facts to rule that Trilantic was a passive investor without explicitly approving or rejecting the higher investment-plus standard. It could adopt the investment-plus test but find that the facts here fall short of plus, or alternatively that Trilantic did have the required level of involvement to constitute a trade or business. Or it could reject the higher standard, finding that even hands-on management is consistent with the status of a passive investor, resulting in circuit split." (Kaufman & Canoles, P.C.)
PPA Supersedes NLRA Right to Unilaterally Implement Pension Proposal
"In a case of first impression, the Fourth Circuit held that the Pension Protection Act's (PPA) obligation on bargaining parties to continue to follow a multiemployer pension fund's rehabilitation plan schedule trumps an employer's right, upon lawful impasse, to unilaterally implement a proposal to move new hires to a 401(k) plan." [Bakery & Confectionary Union & Industry International Pension Fund v. Just Born II, Inc., No. 17-1369 (4th Cir. Apr. 26, 2018)] (Seyfarth Shaw LLP)
Bakery and Confectionery International Pension Fund Again Announces a Two Pool Proposal
"Employers that decide to participate in the hybrid pool would pay their withdrawal liability in the 'old pool' based on a discounted formula.... [E]mployers that participate in the new hybrid pool must remain contributing employers for 30 years. If a participating employer completely withdrew from the new hybrid pool prior to the end of the 30-year period, they would forfeit the discount they received for participating in the new pool." (Polsinelli PC)
Withdrawal Liability Options for Multiemployer Pension Plans Dangled by PBGC
"Under [the 'Two-Pool Method'], a contributing employer is only responsible for the underfunding of its own employees and NOT the underfunding related to all employees of all contributing employers. The issues the PBGC has with [this] are [1] how does a contributing employer move from one pool to the other, and [2] what happens once there are no employers left in the original pool ... How a plan handles these issues will likely determine whether the PBGC approves its alternate method or not." (Bloomberg BNA)
[Official Guidance] Treasury Department Notice of Multiemployer Pension Plan Application to Reduce Benefits: Plasterers Local 82 Pension Fund
"The Board of Trustees of the Plasterers Local 82 Pension Fund, a multiemployer pension plan, has submitted an application to reduce benefits under the plan in accordance with [MPRA].... [T]he application ... has been published on the website of the Department of the Treasury ... [P]ublic comments on the application [are requested] from interested parties, including participants and beneficiaries, employee organizations, and contributing employers[.]" (U.S. Department of the Treasury)
[Official Guidance] Treasury Department Notice of Multiemployer Pension Plan Application to Reduce Benefits: Sheet Metal Works Local Pension Plan
"The Board of Trustees of the Sheet Metal Workers Local Pension Plan, a multiemployer pension plan, has submitted an application to reduce benefits under the plan in accordance with [MPRA].... [T]he application ... has been published on the website of the Department of the Treasury ... [P]ublic comments on the application [are requested] from interested parties, including participants and beneficiaries, employee organizations, and contributing employers[.]" (U.S. Department of the Treasury)
Joint Select Committee Focuses on Multiemployer Basics, Asks for Public Comments
"On [April 18], at the first hearing (and second public meeting) of the Joint Select Committee on Solvency of Multiemployer Pension Plans, one fact became abundantly clear: the problem of multiemployer plans is complex and finding a solution to the issue is also going to be a challenge. But there was a general acknowledgement from members, from both sides of the aisle, that they had to work together to do something." (Pension Rights Center)
Application for Benefit Suspension Under MPRA: Plasterers and Cement Masons Local No. 94 Pension Fund
"The effective date of the proposed suspension is May 1, 2019. The proposed suspension is for an indefinite period of time. The proposed suspension is the maximum permitted suspension and does not provide for different treatment of Participants and Beneficiaries other than as a result of the application of the individual limitations of Section 432(e)(9)(D)(i), (ii) and (iii)." (U.S. Department of the Treasury)
[Opinion] American Academy of Actuaries Testimony to Joint Select Committee on the Solvency of Multiemployer Pension Plans (PDF)
"Of the more than 10 million people who participate in about 1,400 multiemployer pension plans, in excess of 1 million are in approximately 100 plans that will be unable to pay the full benefits they have been promised under current projections.... If the PBGC fails, participants in these plans could see their benefits cut by 90 percent or more." (American Academy of Actuaries)
Testimony of the JCT Before the Joint Select Committee on the Solvency of Multiemployer Pension Plans
32 pages. Topics: [1] Qualified retirement plans generally; [2] Defined benefit plans: Structures, general requirements, selected requirements (including anti-cutback rule); [3] Multiemployer plans: Background, PBGC program, Exceptions to anti-cutback rules, Funding rules (including withdrawal liability), History of multiemployer plan funding issues; and [3] Brief legislative history of significant changes relating to multiemployer plans. (Joint Committee on Taxation [JCT], U.S. Congress)
Summary of Current Law Relating to Multiemployer Defined Benefit Plans
58 pages. "The Joint Select Committee on the Solvency of Multiemployer Pension Plans has scheduled a public hearing on April 18, 2018, on an overview of the multiemployer pension system. This document ... provides a discussion of present law relating to retirement plans generally and to multiemployer defined benefit plans in particular, as well as selected data relating to multiemployer defined benefit plans." (Joint Committee on Taxation [JCT], U.S. Congress)
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