Archive for the ‘Multiemployer Pensions’ Category

UPIC (6) Sports Plans

Now that we have a full list of multemployer plans let’s see how the pensions of the highest paid class of union employees are faring.

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UPIC – (5) Naming Worst Funded Plans

Data from 1,272 multiemployer (union) plans that had their 2014 actuarial certifications (Schedule MBs) available show total unfunded liabilities for these plans of over half a trillion dollars.  The 31 plans with the largest unfunded liabilities accounted for almost half that liability and only two of those (Central States and New York State Teamsters Conference) have looked to go through the MPRA program.  Here they are….

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UPIC – (4) Naming Plans

In their 2016 Annual Report the Pension Benefit Guaranty Corporation (PBGC) reports that they paid $113 million in financial assistance to 65 insolvent multiemployer plans though they do not make it easy to identify the plans on that list (or those likely to be added).  All I found was this October 28, 2014 press release:

The Pension Benefit Guaranty Corporation has sent an initial installment of more than $284,000 to cover benefits for 365 people in two insolvent multiemployer plans in New York. PBGC recently distributed the funds because these plans have run out of money and are unable to pay promised benefits. Quarterly payments will be sent to both plans to pay PBGC guaranteed benefits for current and future retirees. Unlike the agency’s program for single-employer pensions, PBGC doesn’t assume responsibility for insolvent multiemployer plans. Instead, the agency sends financial assistance so the plans can pay benefits at no more than the PBGC guarantee level.

Those plans were the Teamsters Local 531 Pension Plan (no 5500 forms located) and the Local 976 ILA Pension Fund which had a 5500 form filed for 2015 but coded as a Money Purchase with no Schedule MB actuarial certification so it may be that those 65 insolvent plans are not among the 1,281 multemployer plans that filed MBs for 2014.  With that as a premise and cross-checking the 1,394 multiemployer plans PBGC lists on their website to the 1,281 plans for which forms MB were filed we get….

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UPIC – (3) No Contribution Spike

It may be the only time the film Miracle at St. Anna will ever be described as an asset – in paragraph 28 of a lawsuit filed last week against Spike Lee and his companies looking for missed contributions of about $45,000 (plus interest and attorney fees) after an audit:

On information and belief, the single asset of Black Butterfly—the film Miracle at St. Anna (“Film”)— was transferred to Forty Acres without adequate consideration. Forty Acres was represented to the public as the producer of the Film and was credited with the Film’s production.

The union plan involved is the Motion Picture Industry Pension Plan and it provides an example of how even a ‘good’ multiemployer plan where…

  • only 21% of participants are retirees,
  • over 60% of participants are active for whom contributions are made, and
  • contributions and payouts are approximately equal

ends up in dire straits on account the dissociation allowed by, among others, the actuarial profession between benefits promised and funded for.

Based on 5500 data:
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UPIC – (2) Worst Funded Plans

So far these ten multiemployer (union) plans have applied to suspend benefits under MPRA:

94-1133245/001: Automotive Industries Pension Fund (303)
14-6016608/001: Bricklayers and Allied Craftsmen Local 5 Pension (39)
34-6666798/001: Bricklayers and Allied Craftsmen Local 7 Pension (71)
36-6044243/001: Central States, Southeast & Southwest Areas Pension Plan (119)
52-6148924/001: Ironworkers Local 16 Pension Plan (350)
51-0161467/001: Ironworkers Local 17 Pension Fund (30)
16-6063585/074: New York State Teamsters Conference Pension & Retirement Fund (36)
51-6106510/001: Road Carriers Local 707 Pension Fund (10)
22-6172237/001: Teamsters Local 469 Pension Fund (323)
13-5511877/001: United Furniture Workers Pension Fund A (42)

Then there is the big one where average benefits are so low that MPRA suspensions won’t lower much so they have not filed:
52-1050282/002: United Mine Workers of America 1974 Pension Plan (287)

Those bold numbers in brackets are the rank (lowest to highest) by funded ratio of each plan in the listing of all multiemployer plans based on data from 2014 Schedule MB filings.  The takeaway:

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Union Plans In Crisis – (1) 5500 MB Data

Multiemployer (union) plans are subject to federal funding rules though you wouldn’t be able to prove it from the woeful funding situation many of these plans find themselves in.  The problem is that being covered by ERISA also means that some of the benefits promised under these plans are insured by the PBGC (and eventually taxpayers). So what’s the tab?

In this series (UPIC) we will translate pertinent data from 5500 filings collected by the EBSA on their website into reality starting with an overview based on Schedule MB data for 2014, the last full year of filings.

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PBGC Multiemployer Plan Program Examined

Is the Pension Benefit Guaranty Corporation (PBGC) deficit really $58.8 billion for their Multiemployer Plan (MEP) program?

According to a summary page from the FY16 PBGC Annual Report as of 9/30/16 there was $2.2 billion in assets and $61 billion in liabilities.

Putting the asset history from those reports into a spreadsheet (in millions):


PBGC MEP premiums jumped in 2015 from a flat $12 per participant to $26 per participant which was the primary reason for the increase in total assets.

Putting a present value on pension liabilities is always tricky but especially so for the MEP program which covers 10 million participants in 1,400 plans with the key to valuing PBGC liabilities being guesswork as to which of those plans will need financial assistance and when and for what portion of benefits.  In 2014  two major plans (Central States & ???) were added to the list of probable insolvents ushering in the era of 4% funded ratios:

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