On November 20th, two Republican Senators issued a Multiemployer Pension Recapitalization and Reform Plan via a white paper summarizing proposals for the US multiemployer defined-benefit pension system accompanied by a more thorough technical explanation.

While we prepare a more thorough summary of the latter, which we will post here, highlights of the proposals follow:

> Increases in PBGC premiums, including a new variable-rate premium;

> Asking younger retirees, except those who are disabled, to co-pay some PBGC premiums;

> Increases in PBGC benefit guarantees;

> Greater ability for partitioning “orphaned” participants to the PBGC;

> Some governmental fiscal assistance accompanied by more rigorous controls on fund operations;

> Restrictions on setting actuarial assumptions for asset returns;

> Strengthening of funding rules under the various benefit-security zones;

> Reforms to withdrawal liability, including discount rates to match long-term funding rates;

> Composite (variable benefit) plans that will not be PBGC-insured or subject to withdrawal liability;

> Instead of a repeal of suspensions of benefits allowed under the Multiemployer Reform Act of 2014, efforts to clarify and streamline the process; and

> Increased transparency for all stakeholders.

Remember that these are proposals from one house of Congress and are quite different from those proposed by the Democratic Party-controlled House of Representatives (the Rehabilitation for Multiemployer Pensions Act of 2019, aka the Butch-Lewis Act). We shall see what efforts are made to reconcile all the differences.

Please feel free to contact your FACT consultant to discuss these matters.