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.
JUST THE FACTS is prepared by First Actuarial Consulting, Inc. for general informational purposes only. It does not offer legal advice and does not claim to give all information regarding any given topic. As always, how these issues affect your plan specifically should be discussed with fund counsel before any action is taken in this regard.