Multiemployer Defined Benefit Plan Data

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

Excerpts and some updated charts follow:

Multiemployer DB pensions are of current concern to Congress because approximately 10% to 15% of participants are in plans that may become insolvent. When a multiemployer pension plan becomes insolvent, the Pension Benefit Guaranty Corporation (PBGC) provides financial assistance to the plan so the plan can continue to pay benefits up to the PBGC guaranteed amount. Plans that receive PBGC financial assistance must reduce benefits to a statutory maximum benefit, currently equal to $12,870 per year for an individual with 30 years of service in the plan. Neither the guarantee amount nor benefits are adjusted for changes in the cost of living. (page 4)

Using 2013 data (the most recent year for which this data point is available), PBGC estimated that 79% of participants in multiemployer plans that were receiving financial assistance receive their full benefit (i.e., their benefits were below the PBGC maximum guarantee). Among participants in plans that were terminated and likely to need financial assistance in the future, 49% of participants have a benefit below the PBGC maximum guarantee, and 51% have a benefit larger than the PBGC maximum guarantee. Among ongoing plans (neither receiving PBGC financial assistance nor terminated and expected to receive financial assistance), the average benefit is almost twice as large as the average benefit in terminated plans. This suggests that a larger percentage of participants in plans that receive PBGC financial assistance in the future are likely to see benefit reductions as a result of the PBGC maximum guarantee level. (pages 4-5)

PBGC estimates that in the future it will not have sufficient resources from which to provide financial assistance for insolvent plans to pay benefits at the PBGC guarantee level. Most participants would receive less than $2,000 per year because PBGC would be able to provide annual financial assistance equal only to its annual premium revenue, which was $310 million in FY2019. There is no obligation on the part of the federal government to provide financial assistance to PBGC, although some policymakers have stated that some form of federal assistance to PBGC might be necessary to ensure that participants’ benefits are not reduced to a fraction of their promised benefits. (page 5)

In 2017, these 1,229 active plans not receiving PBGC financial assistance that filed Schedule MB had 10.4 million participants. Among participants in these plans about 36.3% were active participants (working and accruing benefits in a plan); about 35.7% were retired participants (currently receiving benefits from a plan) or beneficiaries of deceased participants who were receiving or are entitled to receive benefits; and about 28.0% were separated, vested participants (not accruing benefits from a plan, but owed benefits and will receive them at eligibility age). (page 6)

In 2017, these 1,229 plans had $494.5 billion in assets and owed participants $1,145 billion in benefits, resulting in total underfunding of $651.0 billion (on a current value [RPA ’94] basis). On an actuarial basis, these plans had $512.5 billion in assets and owed participants $659.2 billion, resulting in total underfunding of $146.7 billion. (page 7)

11 responses to this post.

  1. Posted by E on May 26, 2020 at 10:39 am

    Off topic.
    In person graduations July 6 and later.
    Not sure why June 22 couldn’t be the date. No one will be on summer vac then but🤷‍♂️

    Reply

    • Parents are super happy…but I saw a teacher complain because it was “after their contract expires” Unbelievable.

      Reply

      • Posted by E on May 26, 2020 at 12:57 pm

        Yea. That is total bullshit about the contracts. Hopefully most teachers get it. I think they do. Haven’t heard that or any of ours bitching, shame on them If they do. I haven’t heard that though. I work under a collective bargaining contract but get that sometimes circumstances do vary.
        I would’ve like it End of June as scheduled. But for different reasons. Vacations of our own. You may simply not have 100% participation due to that reason. I don’t see how it will be any safer than having it June 25 or so 🤷‍♂️
        Supposedly his stupid counsel recommended that. End of June would’ve been fine and no one would’ve been on vaca and had to come home or cancel. Still a month away for Christ sake. At least they smart enough to give the class of 2020 they send off they deserve.

        Reply

        • Posted by E on May 26, 2020 at 1:01 pm

          I mean really. Can anyone in this board with a straight face say that if masked and distanced, that the graduations will be less safe in the 25th of June than on July 6? Oh well. Least they having one. I guess. That’s great news.

          Reply

          • People are not caring about orders anymore. where your mask if your enclosed or very close to people. Do not touch your face and wash your hands…

            As for the teacher complaining about the contract, just shows you their MO. They havent worked in months. Spare me the nonsense of virtual teaching. The teachers I know said they arent doing it anymore. its more checking in.

          • Posted by E on May 26, 2020 at 2:46 pm

            Yea. They absolutely need to restart IN PERSON in sept. Virtual learning is not doing it.
            It’s fine for a snow day that’s about it.

      • Posted by Rex the Wonder Dog! 🐶🐶🐶🦴🦴🦴 on May 26, 2020 at 7:14 pm

        but I saw a teacher complain because it was “after their contract expires” Unbelievable.
        Why do you think that is unbelievable. I see this CONSTANTLY with public employees. They try to “collectively bargain” virtually everything they can no matter how tangentially it is related to their job, or if the traditional costs of it are borne by the employee, or if the private sector employee gets such fringes. .. Public employees have an “Entitlement Mentality” that is off the charts, where they want to be compensated for virtually ANYTHING they feel is job related, including things that are part of the normal course of employment, such as preparing and maintaining their work clothes (“donning and doffing”); being paid from the time they park their car/vehicle in the parking lot and walk/travel into the building; being paid normal wages ($100/hour+) for cleaning their vehicle (motorcycle cops); the cost of attending any “continuing education” classes for any type of professional license, including the course cost… The list is a mile long, for things that NO ONE in the private sector is ever compensated for. I polish and shine my work shoes once a week, every weekend, have been doing this for 30 years, they are spotless, I don’t get paid for it. I get my shirts laundered and pressed professionally @ $2.50/pop-I don’t get reimbursed for it. I get my suits dry cleaned on occasion, a substantial cost, have never been reimbursed, ever. It is also a sense of pride that I take in my professional appearance. You will always see this extra effort in the best and most aggressive employees. And doing their job in a professional manner. I have to get my vehicle worked on at a mechanic on occasion, get new tires, etc. I don’t try to get paid for the cost of driving there, and waiting for the repair or the time I am being driven back to work. These are every day tasks that are the cost of being employed and conducting business in the real world. If you asked your employer to be reimbursed for the cost of shining shoes, getting shirts laundered and pressed, spending 8 hours on a Saturday and dropping $250 for a continuing education course required for your professional license, donning and duffing your uniform (including a dress suit) … you would get laughed out of your job….

        Reply

  2. Posted by Rex the Wonder Dog! 🐶🐶🐶🦴🦴🦴 on May 26, 2020 at 12:10 pm

    Did the Butch Lewis Bail Out Act make it in to/with the Covid-19 bailout?

    Reply

  3. Just ask GE….or look at SS, used to have 19-1 ration, now its 3-1. its simple MATH.

    Reply

  4. Posted by MJ on May 26, 2020 at 12:58 pm

    Hey E

    That’s awesome and I’m sure it will be a wonderful ceremony and celebration of all the students’ accomplishments. Well deserved for all. Keep us posted as things progress.

    The kids must be so happy and excited. What an awesome milestone and oh the memories of high school graduation 2020 🙂

    Wishing your daughter all the best!

    Reply

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