The increasing risk that some multiemployer pension funds will be insolvent is putting pressure on lawmakers to enact some sweeping reforms in the final days of the 113th Congress before their scheduled adjournment Dec. 11.
Multiemployer pensions are collectively bargained benefits typically covering a specific industry and administered by a joint board of trustees. According to the Department of Labor, there are 1,427 multiemployer defined benefit pension plans covering 10.5 million participants with $431 billion in assets. Many plans also offer defined contribution benefits.
Acting now could mean the difference between solvency and insolvency for many at-risk plans, and would give all plans more certainty going forward, said officials at the Partnership for Multiemployer Retirement Security, a business and labor group promoting a package of multiemployer pension reforms.
The group's package, which was a starting point for legislation that at press time was still being negotiated, would give plan executives more tools to improve their funding status and allow for innovative plan designs such as inclusion of variable benefits, annuities and target benefit plans, in exchange for more funding discipline. Sizeable Pension Benefit Guaranty Corp. premium increases also are on the table, to reduce the threat of a government bailout.
A bipartisan statement Dec. 4 from the House Education and Workforce Committee said that “members are still discussing the details about a possible legislative solution to the multiemployer pension crisis, and remain hopeful Congress will act before the end of the year.”