Multiemployer Defined Benefit Plan Primer

The Congressional Research Service (CRS) released A Primer on Multiemployer Defined Benefit (DB) Pension Plans.

Excerpts and some updated charts follow:

In addition, the Bipartisan Budget Act of 2018 (P.L. 115-123), enacted on February 9, 2018, created the Joint Select Committee on Solvency of Multiemployer Pension Plans to address the impending insolvencies of several large multiemployer DB pension plans and PBGC, but the committee did not provide legislative language by its November 30, 2018, deadline. (page 2)

The premium income in PBGC’s multiemployer program was $310 million in FY2019. Premium levels likely are inadequate to provide continued financial assistance to insolvent multiemployer plans and could exhaust PBGC’s ability to guarantee participants’ benefits. PBGC has indicated that once resources are exhausted in its multiemployer program, insolvent plans would be required to reduce benefits to levels that could be sustained through premium collections only.If this were to occur, participants in insolvent plans could see their benefits reduced to less than $2,000 per year. (page 13)

14 responses to this post.

  1. Posted by Rex the Wonder Dog! 🐶🐶🐶🦴🦴🦴 on April 7, 2020 at 3:40 am

    If this were to occur, participants in insolvent plans could see their benefits reduced to less than $2,000 per year. (page 13)
    I would LOVE to see public pensions FORCED to pay for some of these underfunded multi-employer plans. That wold be perfect.

    Reply

  2. Posted by Eric on April 7, 2020 at 11:17 am

    John:
    This is “off topic”, however, I often wonder why we are forced to pay taxes when the federal government, in the United States, simply “prints” trillions and trillions of U.S dollars out of “thin air” to rescue the financial markets. Why does the New York Fed have a trading desk, if it is not purchasing stocks, to “prop up” the market?
    When Ronald Reagan was president, he signed an executive order implementing the President’s Working Group On Financial Markets commonly known as the “Plunge Protection Team” or the PPT, which serves to purchase stocks in a failing market. Reagan signed this order after the crash of October 19, 1987 when many of my friends were selling stocks due to panic. I was fortunate enough not to sell.
    I am sure that Treasury Secretary Steven Mnuchin is busy preventing any more market declines to assist the banks, Wall Street, Trump’s re-election bid, and perhaps, as a collateral benefit, public sector pensions.
    Even though there is a 90 day delay, I am greatly annoyed at just having paid my quarterly taxes to “Uncle Scam.”
    Eric

    Reply

    • Eric,

      This is only a guess but some economist centuries ago might have thought the idea of being able to print money would be too much of a temptation to those who have control of the presses to print some for themselves. Whereas in a system where you tax people and spend their money those people theoretically have a vested interest in making sure their money is spent well (ie. on them). All theory though as it has not worked that way in practice in the areas of government I am familiar with.

      Reply

  3. Posted by Eric on April 7, 2020 at 12:28 pm

    John:
    I see that the real danger, which is far greater than the Great Depression, is that the Fed has absolutely no restraint on its money printing. Nixon took us off of the gold standard on August 15, 1971. It was a course of action that was only to be “temporary” as he interrupted the broadcast “Gunsmoke.” NB (Temporary is a variation of the word that Chris Christie used, as he informed the already then retired public sector workers, that their cost of living adjustments would only be suspended “temporarily.”) Many criticized Nixon for having done so, however, he was forced, since France was busy converting her excess supply of U.S. dollars into gold. The nobel prize recipient in economics, Professor Milton Friedman, of the Chicago school, recommended that Nixon do so which gave his action the needed intellectual “clout.” Friedman won the prize AFTER his recommendation to Nixon.
    Today, there is no gold standard, acting as a restraint on the Fed’s money printing, and buying anything mantra which literally keeps me awake at night.
    If the U.S. dollar loses most of its already “scant” remaining value, all US citizens pensioners and non-pensioners alike will experience extreme poverty resulting in civil unrest.
    This is why I fear for the young people of the United States. They have no idea what is facing them, and lack the physical and mental fortitude to survive.
    I guess that there is a benefit for being an old man who has been “around the block” many, many times.
    Eric

    Reply

    • Posted by MJ on April 7, 2020 at 4:28 pm

      Eric, IMHO the Fed has absolutely no choice but to continue printing money from now until it all somehow comes crashing down. No choice, where would one begin to put a dent in the financial boon doogle this country and others are in right now. It’s anyone’s guess what the future will hold for our children and grandchildren.

      Some one posted something that gave me pause in regard to deaths related to Covid-19. The jist was that even if someone doesn’t die from the virus, the death toll because of it as measured in suicides, drug over doses, increase of violent crimes, stress related heart attacks, etc. all due to the economic collapse that so many will face as the end result of all of this. Very sad to me

      Reply

  4. Posted by A on April 7, 2020 at 12:48 pm

    As long as we are off topic, maybe someone can explain bitcoin in layman’s terms.

    Reply

    • Posted by Rex the Wonder Dog! 🐶🐶🐶🦴🦴🦴 on April 7, 2020 at 2:28 pm

      As long as we are off topic, maybe someone can explain, in layman’s terms, why unskilled/semi-skilled, GED gov jobs are being compensated at 1%er levels? 🐕 🐕 🐕

      Reply

      • Posted by Tough Love on April 7, 2020 at 2:34 pm

        It’s simple. The Public Sector unions BUY the favorable votes of self-interested Elected Officials (on Public Sector pay, pensions, and benefits) with BRIBES disguised as campaign contributions.

        In any other venue, such actions would be considered bribery and racketeering.

        Reply

      • Posted by A on April 7, 2020 at 6:29 pm

        I am, curious, but not interested. It seems like more and more I see signs of crypto currency going mainstream, and it’s baffling. When I first heard of Bitcoin, the guy seemed to be saying it was a way to evade taxes, because it’s completely outside the government. Looked to me like no government control meant no government protection, so you take your chances. Looks like there are big winners and even bigger losers. But it’s been around for years and doesn’t seem to be going away.

        Money for nothin,’ and chicks for free

        Reply

    • Posted by NJ2AZ on April 7, 2020 at 3:54 pm

      in laymen’s terms: its a crock. no different than if i invented ChrisBucks and convinced you they were the future of currency. As long as there are enough other fools to believe it, they might have some value.

      disclaimer: my name is not really Chris, but for the sake of having an example.

      Reply

  5. Posted by Eric on April 7, 2020 at 3:03 pm

    A
    I would not even consider purchasing bitcoin now. Max Kaiser, on the Kaiser Report, recommended bitcoin in 2011 when bitcoin was only $1 per bitcoin. It is a “cryptocurrency” stored in a “bitcoin wallet.” Bitcoin stood for sound money, which had to be “mined”, rather than printed, in the face of the maddening money printing by the Fed. The bitcoin “keys” and “wallet” can be stolen which has proven to have been somewhat “tricky” for those attempting to hold onto their bitcoin over time. I predict that the US government will outlaw bitcoin since it is in direct competition with the failing US dollar.
    I would not purchase bitcoin now. It is far too late and far too expensive.
    The astute have “cashed out” years ago, paid their taxes, and can now easily afford their own private jet planes.
    Eric

    Reply

    • Posted by PS Drone on April 8, 2020 at 5:47 pm

      Max Keiser currently thinks that Bitcoin will have a value of $400,000 per “coin” once all of the dust settles on the joke that fiat currencies have become. His logic is that there are only supposed to be 21,000,000 Bitcoins in existence, so if a massive amount of economic transactions are conducted using Bitcoin, their value will rise accordingly. I think it is mostly horseshit myself, but you never know how low fiat will go and how high alternatives, including Bitcoin, Gold, Silver, Platinum, Diamonds etc. wiil go particularly when they are priced in toilet paper.

      Reply

  6. Posted by A on April 7, 2020 at 3:19 pm

    Eric,
    Thanks, it was a semi-rhetorical question because you had mentioned the gold standard. Someone tried to talk me into it in about 2010. His main reason was to “stick it to the man” I guess. Never made any sense to me then or now.

    More than anything, it sounded like a pyramid scheme on steroids.

    Reply

  7. Posted by Eric on April 7, 2020 at 3:38 pm

    A
    If you had listened to the person, who tried talking you into purchasing bitcoin in 2010, you might have been as wealthy as Warren Buffett. The key is to have sold.
    I have a very close relative, who purchased massive amounts of both Apple and Amazon stock, long before anyone ever heard of either Steve Jobs or Jeff Bezos, and that person is not at all happy. We do not need much to be happy. I enjoy nature not most people.
    Best of luck to you A!
    Eric

    Reply

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