Pension Benefit Guaranty Corp. today worked out the largest-ever agreement for a multiemployer plan to shore up one of the most underfunded plans for the men's suit industry.
The 200 members of the Amalgamated Insurance Fund agreed in principal to pay 10.3% each of their gross payroll or about $29 million annually to shore up the plan's $253 million unfunded liability. The action needs formal approval by the participating members. The plan, which covers 70,000 workers and retirees, now has $172 million in assets and $425 million in liabilities.
Employers who stay in the pension plan will have set limits on their liabilities if problems happen in the future. The PBGC agreed to make up the difference if the current contribution rate does not support the plan. Employers who leave the plan will have to pay 150% of their normal withdrawal liability.