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.