The Pension Benefit Guaranty Corporation (PBGC) notes that its multiemployer program is the smaller of its two insurance programs, and because of its relatively small size, and the much larger deficit in the single-employer program, the agency says its multiemployer program often gets overlooked when PBGC is discussed.
The PBGC report notes that the multiemployer program has a smaller scope (it insures only 1,500 plans, about one-twentieth as many as the 27,600-plan single-employer program), and it covers only about one-third as many participants (10.4 million versus 33.6 million). However, insured multiemployer plans are about six times as large, on average, as insured single employer plans.
It also notes that a multiemployer plan is a plan maintained pursuant to collective bargaining agreements between one or more unions that represent the plan’s active participants and two or more unrelated employers that are required to contribute to the plan. Common in industries such as construction, trucking, textiles, and coal mining, benefit eligibility under a multiemployer plan is usually based on employment with any employer contributing to that plan.
After surveying the multiemployer program’s legislative background and key operational aspects, the article discusses the PBGC’s overall experience with financial assistance to multiemployer plans and the probability of such claims increasing significantly in the years ahead. Since fiscal year 1981, the PBGC has paid just over $500 million in financial assistance to 62 insolvent multiemployer plans covering more than 93,000 participants. The agency estimates its liability for such payments in the future at nearly $2.3 billion, to 104 plans covering about 136,000 participants.
The Data Book is available on PBGC’s Web site at www.pbgc.gov/docs/2009databook.pdf. Single copies of the publication may be obtained by writing to: PBGC Data Book, Room 12108, 1200 K Street NW, Washington, DC 20005-4026. Requests also may be submitted by FAX to (202) 326-4344. Email: firstname.lastname@example.org.