EPIC Retirement Plan Services
Loren D. Stark Company
Randall & Hurley, Inc.
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|Multiemployer Pension Plans: Withdrawal Liability Is Mounting|
Ford & Harrison LLP
July 29, 2015
"At least four plans, through their actuaries, have dramatically reduced the interest rate assumption to calculate withdrawal liability. Rather than using the plan's assumed rate of return, typically 7-8 percent, they have adopted the PBGC long term interest rate of slightly more than 3 percent to calculate the unfunded vested benefit liabilities and, hence, withdrawal liability. These interest rate changes are increasing the amount of withdrawal liability by 200-400 percent depending on the methodology used ... Employers in critical plans need to understand and manage this mounting withdrawal liability before it becomes so great that it exceeds the net worth of a company."
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