Tag: multiemployer pension plans
The legislation aims to establish a 30-year loan program and new financial assistance for financially troubled multiemployer pension plans.
Members of the Senate Finance Committee voiced frustration that lawmakers have not yet come to a solution to the multiemployer union pension funding crisis.
The Society of Actuaries also found the average plan spends more to fund its unfunded liability than to fund current benefit accruals, and it costs most per current active participant to pay off a plan’s unfunded liability.
The Pension Accountability Act is designed to give workers and retirees “a seat at the table” when a looming multiemployer pension bankruptcy may require major pension cuts, U.S. Senators from Ohio announced.
In a hearing, lawmakers heard about how the multiemployer pension plan crisis is affecting employers, employees and the economy today, why current legislation contributes to the crisis, and suggestions for moving forward.
The bill would establish a Pension Rehabilitation Administration (PRA)—an entirely new agency within the Department of the Treasury authorized to issue bonds in order to finance loans to certain multiemployer pension plans.
Senators and co-chairmen Orrin Hatch and Sherrod Brown said they missed their stated deadline for voting on a package of solutions, but the Joint Select Committee on the Solvency of Multiemployer Pension Plans will continue its work during the new session of Congress.
The pension insurance organization says the financial condition of both its single employer and multiemployer insurance programs have improved, but the latter program is still projected to be insolvent by 2025.
Findings reported in a new white paper suggest that government-subsidized loans would not be an effective mechanism for preventing multiemployer pension plan insolvencies.
But with Congressional assistance, there is hope for these plans, Segal Consulting says.
Plaintiffs seek government compensation for participants “prevented from accessing their own financial property.”
The committee was told that benefit cuts are not the answer and was urged to reform withdrawal liability rules.
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.