Archive for the ‘Multiemployer Pensions’ Category

CBO on Multiemployer Bailout

An article in The Epoch times linked to a Congressional Budget Office (CBO) letter that they interpreted as being against a bailout of multiemployer plans but if you look at the CBO analysis:

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On March 14, 2019 representatives form the American Academy of Actuaries (AAA) Multiemployer Plans Committee met for the third time with representatives from the Department of the Treasury (DOT), Pension Benefit Guaranty Corporation (PBGC), and Department of Labor (DOL) to discuss the MPRA application process and also “covered the topics of withdrawal liability, mergers and transfers, and possible multiemployer pension reform legislation.”

Excerpts from the notes of that meeting follow:

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President Bernie’s Pension Plans

Item 11 of Bernie Sanders’ 18-point workplace democracy plan would:

Protect the pensions of workers. As President, Bernie will protect and expand pension benefits of employees in both the public and the private sector.  Because of a 2014 change in law instituted in the dead of night and against the strong opposition of Senator Sanders, it is now legal to cut the earned pension benefits of more than 1.5 million workers and retirees in multi-employer pension plans.  As president, Bernie will sign an executive order to impose a moratorium on future pension cuts and would reverse the cuts to retirement benefits that have already been made.  In addition, President Sanders will fight to implement the Keep Our Pension Promises Act [KOPPA] he first introduced in 2015 to prevent the pensions of up to 10 million Americans from being cut.  Instead of asking retirees to take a massive cut in their pension benefits, Bernie will make multi-employer plans solvent by closing egregious loopholes that allow the wealthiest Americans in this country to avoid paying their fair share of taxes.  If Congress could provide a multi-trillion bailout to Wall Street and foreign banks in 2008, we can and we must protect the pensions that were promised to millions of Americans.

Perhaps in anticipation of a bailout, applications for benefit cuts under MPRA have slowed considerably so that might not be an issue by inauguration day. However, in 2017 when KOPPA was trumpeted by Sanders (with Senator Al Franken me-tooing), I had my doubts.

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PBGC Multiemployer Program Continues on a Path Toward Insolvency

On August 6, 2019, the Pension Benefit Guaranty Corporation (PBGC) released its projections report for fiscal year (FY) 2018 and here are what Milliman considers the key takeaways as regards the financial condition of the Multiemployer Program.

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Rehabilitation For All

In their summary of the multiemployer bailout bill a consulting firm makes an interesting observation:

Some plans may find it advantageous to significantly shift their mortality, investment return, or industry level assumption in order to be in critical and declining status to be eligible for the loan program.

Here is what may happen.

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Not Kicking On Multiemployer Plan Bailout

There is much that this National Review article got wrong about the imminent federal bailout of multiemployer plans (there are actually about 10 million participants) but most glaring:

The House of Representatives passed H.R. 397, the Rehabilitation for Multiemployer Pensions Act, before leaving town for summer recess. Proponents claim that this legislation would protect the pensions of over a million private employees whose pension funds have gone insolvent. In truth, all H.R. 397 does is kick the can down the road while saddling taxpayers with the cost in the meantime.

H.R. 397 has nothing to do with kicking any can down any road. It IS the solution and as long as these blank checks are good there is no more crisis – for participants in multiemployer plans and those who run them. But for everybody else:

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I See a Bailout for Multiemployer Plans

H.R. 397, the bailout bill for multiemployer plans, is likely to become law and here is why.

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