Legislation that would require the PBGC to subsidize the pension benefits of participants of companies that drop out of multiemployer pension plans was announced today by Sen. Bob Casey, D-Pa.
Under a bill that Mr. Casey plans to introduce on March 23, assets equal to up to five years of the projected benefit payments for orphaned multiemployer plan participants would be put into a separate account by the surviving companies in the plan, and the participants would be paid full plan benefits out of that account for five years. After those five years, the bill would require the Pension Benefit Guaranty Corp. to kick in whatever funding is required to pay the full benefits that the orphaned participants would have received from the multiemployer plan.
Another provision in the bill would raise the maximum amount the PBGC can pay to any plan participant to $21,000 a year from $12,800 a year under current law. The bill, the Create Jobs & Save Benefits Act of 2010, also would clear the way for separate multiemployer plans to combine for the purpose of reducing administrative costs, Mr. Casey said in a teleconference with reporters.
Mr. Casey said the bill could cost up to $8 billion to $10 billion.
PBGC officials had no comment, according to Jeffrey Speicher, an agency spokesman.