There are approximately 1,400 multiemployer pension plans and nearly 10 percent are projected to become insolvent within the next 15 years. Plan insolvency will trigger a termination and the assessment of withdrawal liability. Collectively, these plans have over $30 billion in unfunded liabilities. These plans are now being designated as in “critical and declining status” and have the authority to reduce benefits under the changes to the law made in 2014. While those benefit cuts, which require regulatory approval, may forestall insolvency for a while, they are not going to reduce any withdrawal liability over the next 10 years.
Articles Discussing Multi-Employer Pension Plans.
Federal Agencies Issue Regulations Governing Benefit Reductions and Partitions for Underfunded Multiemployer Pension Plans
On June 17, 2015, the Internal Revenue Service (IRS) and the Pension Benefit Guaranty Corporation (PBGC) released several regulatory measures implementing the multiemployer pension plan amendments that were enacted in December, 2014.
“CRomnibus” Spending Bill Makes Significant Changes to Law Governing Multiemployer Pension Plans
The Multiemployer Pension Reform Act of 2014, part of the trillion-dollar government funding legislation (the so-called “CRomnibus” bill) approved by the House of Representatives on December 11, the Senate on December 13, and signed by President Obama on December 16, makes significant changes to the law governing multiemployer pension plans. Some of the most important changes are summarized below.