Plan to Shore Up Failing Multiemployer Pension System

It was announced today that Sens. Chuck Grassley (R-Iowa) and Lamar Alexander (R-Tenn.), chairmen of the Senate Finance and Senate Health, Education, Labor and Pensions Committees respectively, released a proposal to “avert the collapse of critically underfunded multiemployer pension plans and reform rules for these plans to prevent future funding shortfalls within these important pillars of the American retirement system.”

The Multiemployer Pension Recapitalization and Reform Plan comes with explanations, both long and short. Here is my even shorter précis .

  1. New monthly co-payments to PBGC for active workers and retirees.
  2. Loosen standards for being able to partition.
  3. Higher benefit guarantee level.
  4. Much higher premiums (similar to what is driving Single Employer plans to DC).
  5. Federal bailout (“small portion of financial assistance”).
  6. Less phony actuarial assumptions.
  7. Strengthen zone rules (add purple and taupe?)
  8. Add transparency to withdrawal liability calculations (no more Segal Blend?)
  9. Reform reporting and disclosure requirements.
  10. Allow hybrid plans – to be called “composite” plans.

 

 

 

 

4 responses to this post.

  1. Posted by Tough Love on November 20, 2019 at 8:18 pm

    If no so outrageous, your #4 would be funny ………..”Much higher premiums (similar to what is driving Single Employer plans to DC).”

    What are these “in Critical status” Plans going to do ……….. pay these “much higher” PBGC Premiums with TAXPAYER funds ?

    Reply

  2. Nobody wants to talk about how we got here, and who benefitted, compared with who will become worse off as a result.

    Because regardless of the details, it’s generational. And the generations that will be made worse off under any proposal are those whose earnings are already 25 percent less than those who came before, and are inheriting huge debts across the economy from those who came before.

    We must never question why this is fair, right? It’s all technical fixes, like the deals that put us in this situation to start with.

    Generation Greed.

    Reply

  3. Posted by Rex the Wonder Dog! 🐶🐶🐶🦴🦴🦴 on November 21, 2019 at 1:25 pm

    Allow hybrid plans – to be called “composite” plans.
    Yes, that’s the ticket to solving this simple problem, why didn’t some Einstein dream this up 20 years ago…. (eye rolls)

    Reply

  4. Posted by Rex the Wonder Dog! 🐶🐶🐶🦴🦴🦴 on November 25, 2019 at 11:47 am

    We have found PART of the ANSWER! (And It includes employees PAYING IN!)

    At Long Last: Senate Moves Forward With a Multiemployer Pension Rescue
    By Elizabeth Bauer

    “According to the newly-released white paper, the first step is a new premium structure, in which, in addition to participating employers paying into the system, each retiree would also pay a “co-payment” of up to 10%, based on funded status and the age and health of the retiree, with elderly and disabled retirees exempt.”
    https://www.forbes.com/sites/ebauer/2019/11/20/at-long-last-senate-moves-forward-with-a-multiemployer-pension-rescue/#5071a9657724

    https://secure.gravatar.com/avatar/8d6a493d380e87d49599d5487691c9fc?s=400&d=mm&r=g

    Reply

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