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Compliance February 12, 2002
PBGC Ups Multi-Employer Guarantee
December 26, 2000 (PLANSPONSOR.com) - Participants
in multi-employer retirement plans will get a bit more
security, thanks to an increase in the Pension Benefit
Guarantee Corporation's guarantee limit.
Reported by editors@plansponsor.com
It is the first increase in PBGC’s multie-mployer guarantee since 1980.
A multi-employer plan is a collectively bargained pension arrangement involving two or more unrelated employers, generally in a common industry where workers often move from job to job, such as construction and trucking.
The increase follows President Clinton’s approval of The Consolidated Appropriations Act, 2001 last week, which amended Title IV of ERISA to increase PBGC’s maximum guarantee limit for participants in multi-employer plans.
The increased guarantee limit will apply to any multi-employer plan that has not received PBGC financial assistance within a 1-year period ending on December 21, 2000. The old guarantee limit remains in place for participants in multi-employer plans that have received financial assistance in the last year.
The Pension Benefit Guarantee Corporation (PBGC) acts as an insurer of benefits, providing financial assistance to plans that become insolvent, that is, unable to pay benefits when due. The PBGC currently covers some 1,800 multi-employer defined benefit pension plans, including more than 9 million workers and retirees.
– Nevin Adams editors@plansponsor.com
Technical
Update 00-7
explains the changes.