Archive for the ‘Multiemployer Pensions’ Category

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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American Rescue Plan Act of 2021 (4) 9704

Going through the text of the stimulus bill, section 9704 is the meat of the bailout but those 10 pages might be a little hard going so I have added my emphasis.

What struck me on initial reading is that there does not seem to be any cap on those one-time lump sum assistance payments and applicants may be able to value future benefits too. That is, a union with the foresight to sponsor a pension that is almost broke could entice employers to enter their union with the offer of providing their employees with a good pension at a cost that taxpayers will subsidize. Sounds too stupid to be real except if the law were entirely drafted by lawyers for the unions.

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American Rescue Plan Act of 2021 (3) 9703 + Miscellany

Going through the text of the stimulus bill, section 9703 continues allowing those who run multiemployer plans and their actuaries to make up their own rules as long as such calculations do not overly embarrass the regulators and they do not sneak in any benefit increases.

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American Rescue Plan Act of 2021 (2) 9702

Going through the text of the stimulus bill we come to section 9702 which says that for multiemployer plans self-designated as being in Critical and Endangered status, who had to come up with a plan to dig out, will have their funding improvement or rehabilitation period extended by 5 years.

I wonder if any of these funding improvement plans filed before ARPA included a line like:

Waiting for union-controlled democrats to take over the federal government so 100% of all unfunded liabilities get covered by taxpayers.

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American Rescue Plan Act of 2021 (1) 9701

Govinfo.gov has this text of the stimulus bill so let’s assume this is final and get into individual blogs on the pension sections:

  • Sec. 9701. Temporary delay of designation of multiemployer plans as in endangered, critical, or critical and declining status.
  • Sec. 9702. Temporary extension of the funding improvement and rehabilitation periods for multiemployer pension plans in critical and endangered status for 2020 or 2021.
  • Sec. 9703. Adjustments to funding standard account rules.
  • Sec. 9704. Special financial assistance program for financially troubled multiemployer plans.
  • Sec. 9705. Extended amortization for single employer plans.
  • Sec. 9706. Extension of pension funding stabilization percentages for single employer plans.
  • Sec. 9707. Modification of special rules for minimum funding standards for community newspaper plans.
  • Sec. 9708. Expansion of limitation on excessive employee remuneration.

We start with a provision that keeps multiemployer plans who did not have the foresight to designate their plans in bad shape from rushing for the increments.

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Multiemployer Bailout Signed

From a Road Carriers 707 Pension Fund email blast:

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Multiemployer Bailout Passes House

From a Road Carriers 707 Pension Fund email blast:

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