Union Plans In Crisis – (1) 5500 MB Data

Multiemployer (union) plans are subject to federal funding rules though you wouldn’t be able to prove it from the woeful funding situation many of these plans find themselves in.  The problem is that being covered by ERISA also means that some of the benefits promised under these plans are insured by the PBGC (and eventually taxpayers). So what’s the tab?

In this series (UPIC) we will translate pertinent data from 5500 filings collected by the EBSA on their website into reality starting with an overview based on Schedule MB data for 2014, the last full year of filings.

Number of plans: 1,281

Total participants: 10,139,368 including:

  • Retirees: 3,581,649
  • Separated but entitled to benefits: 2,876,543
  • Still working: 3,681,176

Asset Value (Market): 463,884,359,353

Value of liabilities using RPA rate (3.64% mostly): $986,235,417,075:

  • Retirees: $463,967,025,318
  • Separated but entitled to benefits: $159,598,009,193
  • Still working: $362,670,382,564


Funded ratio: 47.04%

Unfunded Liabilities: $522,351,057,722

Annual Contributions (MB): $25,772,677,149

Expected Payouts: $41,090,070,413

For anyone looking to get a jump on where I am taking this here are the spreadsheets (note – no plan names on the MB, just EINs for identification) sorted:


10 responses to this post.

  1. Posted by MattJ on November 24, 2016 at 5:59 pm

    PBGC is not backed by the taxpayer, it is only funded by the member companies.


    • Not when Central States and especially United Mine Workers (where benefits are lower and so almost entirely covered by PBGC) run out of money. Then the $2 billion in the fund now and annual premiums ($270 million based on $27 per capita) won’t be near enough and the people pulling the strings understand this so they are trying to buy time by cutting benefits now. That’s not working (witness those MPRA denials) so expect it to be on on the taxpayers somehow.


      • Posted by MattJ on November 25, 2016 at 4:30 pm

        I expect that those who have unfunded pensions will demand the federal government to find a way to fund their pensions. I expect the much larger number of people without pensions, particularly those without adequate retirement savings, to not support federal money going to fund the retirement of a small subset of the total population.


        • The key thing here is they would not support a bailout it if they understood the cost (or even knew it was going on).

          Based on my experience with regulation of private sector plans I’m sure 90% of the population would be against new comparability plans if they understood the concept but it gets done because it makes money for experts, advisers, etc. who sell these plans though the majority left with tiny 401(k) accounts at retirement (if that) are blissfully unaware that they are not going to get anywhere near what prior generation got at retirement.

          I see a bailout for multiemplogyer plans through the PBGC just like Fannie Mae & Freddie Mac were bailed out though with a lot less publicity.


          • It would be very uncouth of the Fed to just take the Plans’ liabilities onto its balance sheet and itself dole out checks every month to retirees with hot-off-the-presses cash; too much publicity, fair to assume that’s only a last resort. So instead let’s first define the Plans as “SIFI” (https://en.wikipedia.org/wiki/Systemically_important_financial_institution). Then lets “inject capital” (https://stats.oecd.org/glossary/detail.asp?ID=6233) — the hot-off-the-presses kind — as necessary to support these newly-classified SIFI’s, because now they’re now important systematically. Then let’s pretend that nothing’s happened, just biz as usual, so that the “much larger # of ppl” mentioned by MattJ don’t get alarmed. Then lets do the same for PERS, etc in due course.

            What could possibly go wrong? 😉


  2. Based on still working vs. retired, that is one year in retirement for each year worked. No one can receive that except at someone else’s expense. The cost is too great.

    So they paid less than half of it.


    • Based on still working vs. retired, that is one year in retirement for each year worked. No one can receive that except at someone else’s expense. The cost is too great.
      Yet that is the government public pension plan model in basically every locality in the nation. “Retire” as young as age 50, sometimes with 30 years in, sometimes with less, and then collect until age 80, 85, 90 or even longer. And collect that “pension” at a multiple of the highest annual salary you earned while actually working because the “pension” is based on the single highest year (usually last), or the highest 3 year average, or the highest 5 year average. And if the government entity allowed you to “buy air time”, up to five years usually, you could conceivably work 25 years, buy 5 more for the max payout of 30 years, and then retire with just 25 years in while living another 30-40+. What goes up must come down.


  3. […] years ago this plan was 52.62% funded which is higher than the 47.04% average funded ratio for ALL multiemployer plans and the 46.57% average funded ratio for all multiemployer plans in New Jersey. Ten years from now […]


  4. […] last year we ran a series of blogs on Union Plans In Crisis based on Schedule MB actuarial information for 2014 concentrating on (at the time) ten plans that […]


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