Reeder recently told the Joint Select Committee on Solvency of Multiemployer Pension Plans that insolvency of the PBGC multiemployer program could result in participants in failed multiemployer plans receiving a very small fraction—an eighth or less, on average—of the current benefit guarantee level.
“A combination of economic, demographic, and regulatory changes have placed a small but material segment of these plans at risk,” Ted Goldman, senior pension fellow with the American Academy of Actuaries, told a new Congressional committee.
Senator Sherrod Brown (D-Ohio) announced he was named co-chair of the committee; however, there were no press releases at the time of publication announcing other Senate appointees.
The law would have the committee introduce legislation to address the pension crisis by this December.
The fund would be used to make loans to multiemployer defined benefit (DB) plans that are in critical or declining status or that are insolvent but not terminated.
Some industry experts say the process of applying for benefit suspensions is proving more stringent than applicants and industry experts had anticipated.
Investment returns are the biggest factor in multiemployer plans’ funded status improvement, according to Milliman data.