Archive for the ‘Multiemployer Pensions’ Category

Multiemployer Bailout: $527 Billion More

The bailout was set for $86 billion but the Congressional Research Service (CRS) put out a report listing plans they thought would be eligible and it totaled $149 billion in unfunded liabilities. Yet CRS left out a lot of plans that have unfunded liabilities according to 2019 MB data who might get themselves eligible for some of that bailout money and those unfunded liabilities came to:

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Multiemployer Bailout: $149 Billion

The bailout was set for $86 billion but the Congressional Research Service (CRS) put out a report listing “plans that meet or might meet eligibility criteria based on the most recent available data from the Department of Labor (DOL), the Department of the Treasury, and the Pension Benefit Guaranty Corporation (PBGC)….More detailed information regarding eligibility for, and calculating the amount of, special financial assistance is to be available when PBGC issues regulations or guidance.Under ARPA, PBGC is required to issue regulations or guidance by July 9, 2021.”

There is no total in the report but CRS does list EINs so supplementing 2019 MB data (which includes a lot more underfunded plans than CRS shows) with CRS data for plans not in the 2019 summaries (which include participant counts only for the plans that did not submit an MB) we get this bailout number:

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Senate hearing on retirement security

Last Thursday the Senate held the first hearing on retirement security since 2013 and, to give you a sense of the atmosphere, when a union lawyer was asked about the recent bailout of multiemployer pension plans:

Other clips of note:

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Rubbing Out Central States Debt

In exchange for Senator Joe Manchin’s support for the latest covid relief bill (and possibly future statehood for DC) we got a bailout of multiemployer plans that included, according to Aharon Friedman in the Washington Examiner, the ‘baddest’ pension plan where he goes into some history that can be summed up thusly:

Which apparently continue:

It is not clear why the plan made highly risky loans in recent years to Nicolas Maduro’s Venezuela and its government petroleum company. Perhaps such “investments” are supposed to be an example of the so-called environmental, social, and governance practices pushed by the Biden administration. Eight such loans, albeit relatively small, comprise all the plan’s loans in default or uncollectible on its latest filing.

But all crime is not created equal. For example, if I were to use my company’s retirement trust fund to pay employee salaries it would be a prohibited transaction that could result in some jail time. Not so for multiemployer plans.

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Multiemployer Retirement Plan: A Quick Guide

What Is a Multiemployer Plan?

A multiemployer plan is an employee benefit pension plan collectively bargained and maintained by more than one employer usually within the same or related industries, and a labor union. These plans are usually referred to as “Taft-Hartley plans.”

A Multiemployer Plan is a distinct type of 401(k) retirement plan in which employers join together to pool their purchasing power within a single plan. Multiemployer Plans make it easy and cost-effective for any size employer to offer a high-quality institutional level retirement plan to achieve their retirement savings by age and keep the employee secured for his retirement.

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UMWA 5500 Update – 6/30/20

Four years ago retired coal miners traveled to Washington, D.C. to lobby lawmakers to put in place a federal safety net in case the United Mine Workers of America (UMWA) pension fund fails. Coal plant closures and company bankruptcies have sent the pension fund to the edge of collapse. In October, 2019 Murray Energy, the last major company propping up the dwindling fund, also went bankrupt and the prediction was insolvency in FY23.

Yesterday the plan submitted their 5500 form for the year ended 6/30/20 providing an idea of how much more taxpayers will now be on the hook for after what appears to be the $1.5 billion that came in during the plan year. Continue reading

Yes, Rescuing Pensions Will Destroy Them

On the Brookings website Joshua Gothbaum, former head of the PBGC, argues the opposite believing:

  • Employers in multiemployer plans will not withdraw if they do not have to pay withdrawal liabilities,
  • State and local plans will not be in line for similar bailouts, and
  • Congress will “probably not” let plans get into trouble again.

All debatable points but what is incontrovertible:

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Multiemployer Pension Bailout Zooming Along

There was a Zoom call this Monday with former Congressman Pete King joining in “to congratulate all the retirees on this hard earned victory and thank them for their patience…..The Fund is currently in contact with the PBGC and other agencies to be prepared when the application process begins in mid July” as explained in this excerpt:

Full zoom:

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Breaking News: Another MPRA Filing

Will this be the last filing or the first of new crop looking to position their plan for bailout money?

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Who Needs MPRA?

A scant week after the the multiemployer pension bailout was enacted one large plan reversed course towards that pot of gold.

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