Joint congressional committee meets again to talk legislative fixes
Upated with correction
An estimated 115 multiemployer plans covering roughly 1.4 million participants are likely to be insolvent within the next 20 years, according to a new analysis by the Society of Actuaries released Thursday.
Based on the latest publicly available filings from the Department of Labor, the SOA used a 2.9% discount rate to model the projected liabilities of the multiemployer pension funds.
Of the 115 plans with a total estimated unfunded liability of $107.4 billion that are expected to be insolvent, 21 plans will be by 2023 and 48 plans will be by 2028, it said.
The estimated Pension Benefit Guaranty Corp. benefits range from less than 20% to more than 90% of plan benefits, depending on the specifics of each individual plan, the SOA analysis found.
The future of the PBGC's multiemployer guarantee program, which is facing its own insolvency crisis, was the subject Thursday of the second hearing held by the Joint Select Committee on Solvency of Multiemployer Pensions Plans, a special congressional panel working toward a Nov. 30 deadline to recommend legislative fixes for the program and struggling multiemployer pension funds.
Select committee co-Chairman Sherrod Brown, D-Ohio, said Thursday that the panel will hold hearings until July, and then "we will have to start the process of negotiating a bipartisan solution to the crisis."
In addition the problems of the plans themselves, "it is clear that since its inception, the PBGC has faced design and operational issues that have made achieving its policy goals difficult," said co-Chairman Orrin Hatch, R-Utah.
PBGC Director W. Thomas Reeder Jr. told the panel that "an unprecedented level" of multiemployer pension funds have reported to be facing insolvency within 20 years, "and some much sooner than that."