Archive for the ‘Multiemployer Pensions’ Category

SFA Revision and Update

The PBGC Special Financial Assistance program for troubled multiemployer plans had another plan revise their application. There is no copy of the revised application yet but the summary page shows the Teamsters Local 641 Pension Plan now asking for an additional $15 million.

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NFL Benefits

Chapter 5 of When the Cheering Stops is on pensions and benefits that National Football League (NFL) players get. Below are excerpts and a look at the funded status of the Bert Bell/Pete Rozelle NFL Player Retirement Plan.

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Democrats want to rescue union pensions from party’s failed bailout plan

Excerpts from an article that appeared in The Hill over the weekend written by Aharon Friedman, director and senior tax counsel at the Federal Policy Group.

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SFA Winding Road

The Road Carriers Local 707 Pension Fund , which became the first plan to seek bailout money under the PBGC Special Financial Assistance program for troubled multiemployer plans as well as the first plan to withdraw their application, probably due to the use of 5.32% as the SFA Interest rate instead of 5.38%, have refiled and are now asking for either $4 million more or $12 million less depending on whether you go with the SFA summary page or Sheet 4-3 from their application.

They are not alone as seven of the twenty plans that have applied show differences between what they have on their 4-3 sheets and what the PBGC summarizes as what they are requesting.

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707 Back On SFA Road

The Road Carriers Local 707 Pension Fund , which became the first plan to seek bailout money under the PBGC Special Financial Assistance program for troubled multiemployer plans as well as the first plan to withdraw their application, probably due to the use of 5.32% as the SFA Interest rate instead of 5.38%, have refiled and are now asking for $4 million more.

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SFA Bailout Timeline

For those wondering when payments under the PBGC Special Financial Assistance program will be coming, the International Foundation of Employee Benefit Plans blog has some guidance.

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SFA Bailout: 0% = $6.1 Million

The Carpenters Industrial Council of Eastern PA Pension Fund is asking the government for $14,137,881 under the multiemplolyer bailout program. Template 4 of the application is where the requested amount is calculated. The PBGC provides that template and here is what I get from making up my own sheet* using the plan’s data with a 5.38% assumed interest rate for future earnings instead of 0%.

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Double Your Bailout Money With 0% Interest

In 2019 there were 1,219 union plans with Schedule MB attachments. Of those 1,209 used an interest rate of between 2.92% and 8.5% to calculate their liabilities for valuation purposes. One used 70% but presumably that was a typo on the form.

Nine others had that item blank:

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My SFA Blunder, But….

In reviewing the amounts that insolvent multiemployer plans were asking from the government under the PBGC Special Financial Assistance program I noticed that the Carpenters Industrial Council of Eastern PA Pension Plan was looking for much more money when compared to their RPA liabilities then every other plan. I assumed this was a mistake in the 6/1/19 Schedule MB filing where the interest rate used for valuation purposes was left blank so 0% was used in the application calculation.

I now see my mistake. 0% was the interest rate they intended to use for the 6/1/19 valuation but how they got there makes what they did much worse, primarily for other actuaries.

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SFA First Withdrawal

The PBGC Special Financial Assistance program for troubled multiemployer plans now has 19 applicants as the first plan to apply became the first to withdraw:

Road Carriers Local 707 Pension Plan08/13/2021WithdrawnPDF

Here is how Local 707 explained it in an email blast and what I think happened.

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