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<< Older News  |  September 20, 2021

News

All News > Multiemployer Plans

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Third Circuit Upholds Withdrawal Liability Award Under MPPAA's 'Evade or Avoid' Provision
Jackson Lewis P.C. Link to more items from this source
Sept. 9, 2021

"The arbitrator, the [federal district court], and ultimately the [Third Circuit] ... found the last-minute change resulting in a direct transfer of 24.5% of equity at Renco's insistence highly indicative of an evade or avoid motive.... [This case] reminds us that a transaction can (and often does) have more than one principal purpose, and that only one such purpose need have an evasive motive to trigger the application of Section 4212(c)." [Steelworkers Pension Trust v. The Renco Group, Inc., Nos. 19-3499, 19-3504 and 19-3507 (3d Cir. Aug. 26, 2021)]

Tags: Funding of DB Plans  •  Multiemployer Plans

ARPA Multiemployer Pension Plan Special Financial Assistance Program: What It Is, and What to Consider
Epstein Becker Green, via National Law Review Link to more items from this source
[Guidance Overview]
Sept. 8, 2021

"This update describes key features of the IFR and IRS guidance ... [T]his article also discusses what contributing employers may wish to monitor in those affected plans and what they may need to consider in terms of their own business planning."

Tags: ARPA  •  Multiemployer Plans

Third Circuit Affirms $96 Million Withdrawal Liability Award
Tucker Arensberg, P.C. Link to more items from this source
Sept. 3, 2021

"In a major win for the Steelworkers Pension Trust, the U.S. Court of Appeals for the Third Circuit upheld an award totaling $96 million in withdrawal liability and additional statutory penalties against the Renco Group, Inc.... The key lesson from this case is the importance of multiemployer pension plans thoroughly investigating controlled group liability." [Steelworkers Pension Trust v. The Renco Group, Inc., Nos. 19-3499, 19-3504 and 19-3507 (3d Cir. Aug. 26, 2021)]

Tags: Multiemployer Plans

ARPA Is 'Actuarial Equivalent of a Guillotine'
Burypensions Link to more items from this source
[Opinion]
Sept. 1, 2021

"So why aren't plan participants ... having their monthly pension amounts restored to pre-MPRA levels and getting large checks to make up for past reductions? It would reduce asset values in those plans -- but isn't that a good thing when applying for bailout money?"

Tags: ARPA  •  Multiemployer Plans

Many Union Retirees Fearing Financial Disaster Wait for Pension Rescue
MarketWatch Link to more items from this source
Aug. 30, 2021

"[ARPA offered] taxpayer-funded financial assistance to certain troubled [multiemployer] pension plans ... allowing them to restore benefits to retirees who suffered cuts. But the implementation of the rescue plan has been met with a barrage of criticism from plan trustees, participants and members of Congress who say it's too tight-fisted with the financial assistance and could leave some plans in a worse financial position than they are in now."

Tags: ARPA  •  Funding of DB Plans  •  Multiemployer Plans

Pension Insurer Limits Seen to Sabotage Plans' Economic Recovery
Bloomberg Law Link to more items from this source
[Opinion]
Aug. 24, 2021

"[M]any unions and industry representatives, in more than 100 comment letters on the interim final rule, are decrying strict investment limits and disparate interest projections the PBGC set on the money plans will receive as part of the American Rescue Plan that Congress passed earlier this year. Unless those change, they say, money that was supposed to last 30 years could dry up much sooner."

Tags: ARPA  •  Multiemployer Plans

Editor's Pick A User's Guide to Implementing ARPA's DB Funding Relief
Mercer Link to more items from this source
[Guidance Overview]
Aug. 23, 2021

"Besides providing details on the relief elections, [IRS Notice 2021-48] gives sponsors abundant flexibility to manage credit balances and prior-year contributions. The notice also offers guidance on a few issues related to using ARPA interest rates for other purposes."

Tags: ARPA  •  Funding of DB Plans  •  Multiemployer Plans

Is There Really an Exemption from Union Pension Plan Withdrawal Liability for the Trucking Industry?
Frost Brown Todd LLC Link to more items from this source
Aug. 23, 2021

"There are no PBGC regulations interpreting this exemption and only a few PBGC advisory opinions referencing certain aspects of the exemption. Of the more than 2,500 federal court cases dealing with union pension plan withdrawal liability, less than 30 cases refer to the trucking industry exemption and most of those 30 decisions do not deal with the qualifying requirements for the exemption but rather pertain to routine withdrawal liability issues such as arbitration deadlines, controlled group liability, 'evade and avoid' issues and bankruptcy."

Tags: Multiemployer Plans

Aggregate Funded Percentage for Multiemployer Plans at Its Highest Point Since 2007
Milliman Link to more items from this source
Aug. 18, 2021

"The aggregate funded percentage for multiemployer plans is estimated to be 92% as of June 30, 2021, up from 88% at the end of 2020. The market recovery continued into the first half of 2021, resulting in the highest aggregate funded percentage since 2007. The financial assistance provided by [ARPA] will have a significant impact on funded percentages of eligible plans in the coming years."

Tags: ARPA  •  Funding of DB Plans  •  Multiemployer Plans

Employer Withdrawal Liability Concerns When Multiemployer Pension Plans Receive Special Financial Assistance
Fox Rothschild LLP Link to more items from this source
[Guidance Overview]
Aug. 17, 2021

"The question confronting most contributing employers to SFA-eligible plans is: will the withdrawal liability to that plan change and how? The answer ... requires an assessment of a plan's individual circumstances.... Whether an employer's withdrawal liability will increase or decrease is unclear. For many employers ... liability to an SFA-eligible plan was likely subject to the 20-year cap and that isn't likely to change after the receipt of SFA."

Tags: ARPA  •  Multiemployer Plans

First Multiemployer Plan Requests ARPA Special Financial Assistance
Burypensions Link to more items from this source
Aug. 16, 2021

"According to an email blast the Road Carriers Local 707 Pension Fund [on August 13] became the first to seek bailout money under the PBGC Special Financial Assistance program for troubled multiemployer plans."

Tags: ARPA  •  Multiemployer Plans  •  PBGC

Special Financial Assistance Program for Financially Troubled Multiemployer Plans, Part 1 (PDF)
Pension Benefit Guaranty Corporation [PBGC] Link to more items from this source
[Guidance Overview]
Aug. 12, 2021

Jul. 2021, 28 presentation slides. Topics: [1] Special financial assistance (interim final rule); [2] Application and review process; [3] Restrictions, conditions, and reporting; [4] PBGC guidance; [5] Role of Departments of Treasury and Labor; and [6] Program communication and resources.

Tags: ARPA  •  Multiemployer Plans  •  PBGC

Special Financial Assistance Program for Financially Troubled Multiemployer Plans, Part 2 (PDF)
Pension Benefit Guaranty Corporation [PBGC] Link to more items from this source
[Guidance Overview]
Aug. 12, 2021

Jul. 22, 2021; 47 presentation slides. Topics: [1] ARP/SFA homepage and resources; [2] E-filing portal walkthrough; [3] Application walkthrough; [4] Communications post-submission; [5] Treasury guidance: reinstatements and make-up payments.

Tags: ARPA  •  Multiemployer Plans  •  PBGC

American Academy of Actuaries Comment Letter to PBGC on the Interim Final Rule for Special Financial Assistance (PDF)
American Academy of Actuaries Link to more items from this source
[Opinion]
Aug. 12, 2021

13 pages. "[These] comments cover several topics including eligibility, amount of [special financial assistance], impact on plans with benefit suspensions under [MPRA], actuarial assumptions, the application process, withdrawal liability, and conditions and restrictions."

Tags: ARPA  •  Funding of DB Plans  •  Multiemployer Plans

ERIC Comment Letter to PBGC on Interim Final Rule for Special Financial Assistance (PDF)
The ERISA Industry Committee [ERIC] Link to more items from this source
[Opinion]
Aug. 12, 2021

"The final rule should remove investment restrictions on special financial assistance.... The final rule should provide a more flexible test for requiring documentation and information regarding contributions.... The final rule should adopt a reasonableness standard for documentation[.]"

Tags: ARPA  •  Funding of DB Plans  •  Multiemployer Plans

New PBGC Rule Provides Guidance – and More Questions – on Special Financial Assistance Program for Underfunded Multiemployer Pension Plans
Michael Best Link to more items from this source
[Guidance Overview]
Aug. 11, 2021

"[T]he classification of Special Financial Assistance funds as plan assets and the utilization of mass withdrawal interest assumptions will likely offset, to some extent, the impact of each change on actual withdrawal liability assessment amounts. Even so, there is no guarantee that this will occur in all cases; and the rule introduces further uncertainty for employers regarding their potential withdrawal liability[.]"

Tags: Funding of DB Plans  •  Multiemployer Plans  •  PBGC

Withdrawal Liability: Real Property Presumed a Trade or Business
Jackson Lewis P.C. Link to more items from this source
Aug. 9, 2021

"[The court opinion explains] there is a rebuttable presumption that leasing real property to a withdrawing employer is a trade or business. It had no trouble disposing of the brothers' attempts to rebut the presumption and affirming the district court's judgment in favor of the Local 705 Pension Fund." [Local 705 Int'l Brotherhood of Teamsters Pension Fund v. Pitello, No. 20-2142 (7th Cir. Jul. 7, 2021)]

Tags: Multiemployer Plans

What Multiemployer Plan Trustees Need to Know About Form 5500
Withum Smith+Brown, PC Link to more items from this source
Aug. 4, 2021

"[Form 5500] reports a wide array of qualitative and quantitative information about the plan for a given plan year.... For each of the main schedules, [this article summarizes] the following: [1] A high-level description of the form and what it discloses. [2] What the information contained within the schedules can tell you. [3] How the information may impact your approach to decision-making for your plan."

Tags: Health Plan Administration  •  Multiemployer Plans  •  Retirement Plan Administration

PBGC Rules on Special Financial Assistance to Multiemployer Plans: Effect on Benefits, Contributions, Withdrawal Liability, and Plan Design
The Wagner Law Group Link to more items from this source
[Guidance Overview]
Aug. 2, 2021

"PBGC specified that withdrawal liability is to be determined using PBGC mass withdrawal assumptions to value vested benefits for the later of ten years or the date SFA and earnings on SFA are depleted. Mass withdrawal assumptions are based on annuity purchase prices and therefore result in a conservative valuation.... The Rule also requires PBGC approval of any settlement of withdrawal liability claims in excess of $50 million."

Tags: ARPA  •  Funding of DB Plans  •  Multiemployer Plans

IRS Issues Guidance for Multiemployer DB Plans Receiving Special Financial Assistance from PBGC
Wolters Kluwer; free registration required Link to more items from this source
[Guidance Overview]
July 28, 2021

"The guidance covers the rules under Code Sec. 432(k) for plan sponsors that are required to reinstate certain previously suspended benefits as a condition of receiving special financial assistance from the PBGC under section 9704 of [ARPA]. The IRS also provides guidance on whether make-up payments with respect to previously suspended benefits are eligible to be rolled over to another eligible retirement plan under Code Sec. 402(c), and the extent to which any special financial assistance received by the plan is not taken into account in determining contributions required under Code Sec. 431."

Tags: ARPA  •  Funding of DB Plans  •  Multiemployer Plans

Escalating Litigation of Actuarial Equivalence in Taft-Hartley Plans: No End in Sight
Cohen Milstein Link to more items from this source
July 28, 2021

"To date, eleven class action lawsuits have been filed asserting ERISA violations for the failure to pay actuarially equivalent pension benefits. To date, all lawsuits in this area have involved corporate pension plans. The vast majority survived motions to dismiss in jurisdictions around the country[.]"

Tags: Multiemployer Plans  •  Retirement Plan Administration

Seventh Circuit Ruling Poses Hurdle To Multiemployer Funds Claims
DeBofsky Sherman Casciari Reynolds P.C. Link to more items from this source
July 26, 2021

"[The court] made it clear that ERISA does not provide an enforcement mechanism for collecting judgments.... The jurisdictional issue raised in this case creates a challenge for funds since the same defense may be used in future cases as a means of evading contribution obligations and avoiding withdrawing liability. However, there appears to be a solution." [East Central Illinois Pipe Trades Health & Welfare Fund v. Prather Plumbing & Heating, Inc., No. 20-2525 (7th Cir. Jul. 7, 2021)]

Tags: Funding of DB Plans  •  Multiemployer Plans

American Academy of Actuaries Comment Letter to IRS on Temporary Funding Relief for Multiemployer Plans Under ARPA (PDF)
Multiemployer Plans Committee of the American Academy of Actuaries Link to more items from this source
[Opinion]
July 23, 2021

"Several of our comments focus on how to interpret the temporary funding relief under ARPA in combination with previous temporary funding relief elections. We also make comments regarding the process for electing relief, including whether there will be similar election forms, what the deadline requirements will be, who can sign the election, how to file, etc."

Tags: ARPA  •  Funding of DB Plans  •  Multiemployer Plans

Editor's Pick Notes from Meeting of American Academy of Actuaries Multiemployer Committee with Agencies to Discuss MPRA Application Process (PDF)
American Academy of Actuaries Link to more items from this source
July 23, 2021

8 pages. Topics include: [1] Investment return assumptions; [2] Mortality assumptions; [3] New entrant assumptions; [4] Impact of COVID pandemic on actuarial assumptions; [5] Applicability of Actuarial Standards of Practice; and [6] Partition design.

Tags: Multiemployer Plans  •  PBGC  •  Retirement Plan Administration

ARPA Rescue Is Literal for Distressed Multiemployer Plans
Principal Financial Group Link to more items from this source
[Opinion]
July 23, 2021

"[T]here are now over 150 Taft-Hartley plans plans in such critical condition they need immediate assistance (roughly 11 percent of all such plans). And the PBGC multiemployer insurance cupboard is bare from a wave of past failures and chronic premium undercollection.... So ARPA comes as welcome help to struggling plans and the union employees and retirees who rely on them."

Tags: ARPA  •  Funding of DB Plans  •  Multiemployer Plans


<< Older News  |  September 20, 2021

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