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.
Tens of thousands of employers in the U.S. contribute to multiemployer pension funds that are in critical and declining status, collectively facing an unfunded liability well above $100 billion; Society of Actuary researchers warn of potential ripple effects should many of their plans fail at once.
Plan sponsors now have the opportunity to contact the agency for a pre-filing consultation to discuss the filing process and ensure the filing of a distress termination is appropriate given the sponsor’s specific circumstances.
This enables corporations to expense their contributions at a higher tax rate, according to Cerulli.
U.S. Senators Orrin Hatch and Sherrod Brown are seeking public and industry input on ways to improve the solvency of multiemployer pension plans and the Pension Benefit Guarantee Corporation.
Regarding guidance to assist multiemployer pension plans that request PBGC review of alternative plan rules for satisfying employer withdrawal liability, the agency said for example, some proposals include incentives for employers to remain in the plan by providing discounted withdrawal liability that is conditioned on continued employer participation for a specified period of years.
The proposed rule would amend PBGC’s benefit payment regulation by replacing the guarantee limitations applicable to substantial owners with a new limitation applicable to majority owners.
In a followup interview with Jack Cohen, Association of BellTel Retirees chairman, he says his association and others warned the PBGC that risk transfers would harm the insurance system.
The agency is required to adjust these amounts annually for inflation, but the agency says its goal is to encourage compliance, not to penalize plans that inadvertently forget to file information.
The idea is to put participants with lesser unfunded vested benefits (UVBs) in one plan, and those with greater UVBs in another.
Beginning in January, terminating DC plans will have the option of transferring missing participants’ benefits to PBGC instead of establishing an individual retirement account (IRA) at a financial institution.
A final rule provides a new table for determining expected retirement ages for participants in pension plans undergoing distress or involuntary termination with valuation dates falling in 2018.
“IHI cannot delegate fully its statutory responsibilities under ERISA,” a federal judge says in her opinion.
Michael Barry, president of the Plan Advisory Services Group, discusses how the accounting measures for multiemployer plans contributed to their current crisis.
The request regards distress terminations and PBGC-initiated terminations of DB plans.
IRS compliance questions have been removed from the form.
PBGC data shows the multiemployer program had liabilities of $67.3 billion and assets of $2.2 billion as of September 30, 2017.