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  #641  
Old 12-21-2018, 05:29 AM
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Mary Pat Campbell
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https://www.marketwatch.com/story/th...-on-2018-12-11

Quote:
The truth about pensions: they aren’t dead, but some are barely holding on
Funding retirement remains a challenge for Americans — whether they have a pension or not


Spoiler:
For four days, pensions were the focal point of all of my conversations.

I spent the first few days of December in Washington, D.C. as part of the National Press Foundation’s fellowship for reporting on pensions. Nineteen other journalists from around the country, including Puerto Rico, and I heard from experts at the Employee Benefit Research Institute, AARP, Pension Benefit Guaranty Corporation, unions and Social Security Administration. We also met with Senator Sherrod Brown, a Democrat from Ohio, who spoke about his proposals to create a loan program that would help fix the multiemployer pension problem.


Pensions are often a scapegoat for why so many Americans in the private workforce are without retirement savings, we learned, but not all employees ever had company pensions before 401(k) plans were introduced 40 years ago. Public pensions appear in better shape, for the most part, but some states (including Illinois and New Jersey) are in deep trouble. We were told that the age at retirement had been falling for more than a century in the U.S., but began to tick upward in the 1990s. And we discussed legislative proposals, past and present, that are looking to fix the retirement crisis, including an automatic enrollment plan (but not everyone is for it, such as the U.S. Chamber of Commerce).

Don’t miss: There is a retirement crisis. And workers can’t fix it alone

This was the second time I participated in a National Press Foundation fellowship. The first was in October 2017, where we learned about aging.
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See Also
President Trump and Top Congressional Democrats Clash on Border Security

About 23% of all public and private workers have pensions, according to the Pensions Rights Center — 15% of private-sector workers and 74% of state and local government workers. With so much of retirement funding in flux, and individuals bearing most of the burden of financing their golden years, retirement is an important issue for Americans of all ages across the country — and some people are in significant danger of not having enough money to survive the 20 to 40 years they’ll be in this phase of life. Workers who do have pensions are relying on those promised funds to get them through the rest of their lives after employment, and yet, not all of them will get that money, or if they do, perhaps a fraction of it.

Some private pensions are in dire need of help
• Some multiemployer plans, where numerous companies join together to offer a pension to their employees, aren’t doing well. The multiemployer branch of the Pension Benefit Guaranty Corporation, the federally-instated insurer behind private pensions, will be out of business by 2025 if no changes in law are made to help, said Thomas Reeder, director of the PBGC. If that happens, retirees in those plans will get a fraction — 10% — of what they were promised.

• Plans are at risk because companies have gone bankrupt, and the plans aren’t receiving enough premiums to offset the amount they have to pay out.

• There are 130 plans that are at risk of going under in the next 20 years. “Those are not reasonably possible, those are probably,” Reeder said. About 1.3 million individuals are in plans marked as “critical and declining” status. One half of multiemployer pensions are healthy, Reeder said.

• Single-employer pensions are in better shape. The number of active participants have gone down, as have the number of plans, but they’re not in as much danger.


• The PBGC’s net position in assets for single-employer pensions was positive for the first time in 2018 since 2001. Alternatively, the PBGC has a $54 billion shortfall in multiemployer plans.

Public pensions are doing OK, for the most part
• Some states have failed to fund their workers’ pension plans. There is a $1.4 trillion gap between state pension assets and what employees had been promised, according to 2016 data from Pew Charitable Trusts. Wisconsin has the most funded plan, followed by South Dakota, Tennessee, New York and Nebraska. Kentucky and New Jersey have the least-funded plans, with a 31% funded ratio, followed by Illinois, Connecticut and Colorado.

• A few states (Connecticut, Virginia, Hawaii, Colorado and New Jersey) are implementing stress-testing, which is a simulation of various projections or scenarios on the plan. said Greg Mennis, director of the public sector retirement systems at Pew Charitable Trusts. Pennsylvania is considering it. Stress testing takes investment returns, contributions, inflation, volatility, assets and liabilities and cash flow into consideration, among other factors.

• Some authorities are fighting to replenish their pensions. Ellen Yonts Suetholz, the Kentucky Public Pension Coalition’s coordinator, told fellows she’s in the midst of a legal battle for access to an analysis of the Kentucky governor’s pension reform plan, which the governor’s administration has blocked because it is “preliminary.” Sarah LaFrenz, president of the Kansas Organization of State Employees, said Kansas retirees have not received a Cost of Living Adjustment in years and pensions aren’t receiving the funding they need. “That retirement is very important to [workers],” she said. “It was a promise made to them and should be kept.”


Don’t miss: Are public pensions America’s next retirement crisis?

Retirement sentiment and where retirees stand
• One in three retirees are very confident they’ll have enough money in retirement, though there are signs that sentiment is declining (and it isn’t certain they’re right), according to the Employee Benefit Research Institute. Only half of workers feel confident about knowing what they need to live comfortably throughout retirement.

• Many Americans are not saving enough. More than two in three workers without a retirement plan have less than $1,000 in savings, versus just 10% of those with a plan. Almost three in 10 workers with a plan have $250,000 or more.

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More than 2 in 3 workers without a retirement plan have less than $1,000 in savings. Look at these numbers: #npfpensions

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• Debt drives retirement confidence down, and of the elderly with debt (about 77% of families with heads of households 55 to 64 years old have debt), much of that is in housing.

• Even after they retire, many future retirees expect to work. Four in five workers plan to work for pay after retiring, compared with one in three retirees who actually do so. Retirees might feel more confident because they have defined-benefit plans to fall back on — something not as many employees-turned-retirees from the private workforce will have in the years to come.


• The U.S. isn’t the only country with retirement issues. There are six parts to real retirement reform, said David John, senior strategic policy adviser at AARP Public Policy Institute: Coverage, participation, sufficient savings contributions, appropriate investments, portability and leakage and retirement income. Countries around the world approach retirement differently. The U.K., New Zealand and soon Ireland have “voluntary” auto-enrollment into retirement plans, where employees have a choice to opt in or not, but in Australia, Switzerland, Singapore and Sweden it’s mandatory to participate in retirement plans.

• Retirement age has been increasing because people stopped getting richer faster, Social Security stopped growing, coverage under employer-sponsored pensions stopped expanding and 401(k) plans replaced pensions, said Gary Burtless, senior fellow of economic studies at Brookings Institution.

See: Think saving for retirement is unrealistic? Try retiring with no savings

Social Security is not going away
• Not everyone pays into Social Security, and therefore won’t reap the benefits: 40% of public workers, including law enforcement, firefighters and state and local workers, and 25% of all teachers do not participate in Social Security, who instead will rely on a pension.

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If Congress doesn't act... #NPFpensions

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• Social Security won’t disappear, but retirees will get a reduction in benefits if Congress does nothing, said Steve Goss, chief actuary at the Social Security Administration. Benefit payouts will be 79 cents on the dollar by 2035. To mitigate this risk, Congress will have to lower costs by 25%, increase revenue by 33%, or some combination of the two. These proposals could involve reducing benefits, increasing the full age of retirement or raising payroll taxes.

• Social Security’s troubles stem from a drop in birthrates. Families are having fewer children, starting families later in life, and some may have changed their plans after the recession, when so many Americans lost their jobs or saw slower growing wages.

• The good news: Social Security may be at risk, but Congress has never failed to act, Goss said. “Social Security never reached a point where it couldn’t pay full benefits because Congress always eventually steps in,” he said.


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  #642  
Old 12-21-2018, 05:44 AM
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BAILOUT

https://www.insidesources.com/congre...n-plan-crisis/
Quote:
Congress Must Act to Head Off Coming Multi-Employer Pension Plan Crisis
Spoiler:
I am not generally a big fan of lame-duck sessions because such a large number of soon-to-be former senators and congressmen are voting on their way out the door. But Congress must do something about a looming multi-employer pension plan disaster or we could see very difficult economic times ahead.

Multi-employer pension plans have more than $600 billion of unfunded liabilities and are dangerously close to failing. Once these endangered plans fail, others will not be far behind. Additionally, state and local governments have about $6 trillion in unfunded pension promises. If these potential failures come to fruition, it could be a disaster far worse than the 2008 housing bust.

The White House understands the risks and has met with the chief players on Capitol Hill, encouraging them to work together to find a lasting solution.

It is hoped the Joint Select Committee on Solvency of Multiemployer Pension Plans realizes what is at stake. Its work could either hasten an economic crash like the one we experienced in 2008, or if it does its job, it could prevent such a crash.

The Joint Select Committee has made progress reforming the Pension Benefit Guaranty Corporation, providing greater transparency, and requiring all stakeholders to help share in the costs of the solution. Unfortunately, some of the “solutions” being discussed aren’t actually solutions at all. In fact, some of the so-called solutions will actually hasten the impending financial disaster. You can’t save the patient if you’re administering lethal doses of poison.

For example, whatever cost-sharing mechanisms are put in place, and whatever interest rates are applied, they must be realistic and gradual because the goal has to be eventual and long-term financial health. The fixes must not force the pension system into cardiac arrest. But some of the current proposals on the Hill are precisely that.

It is hoped that senators Orrin Hatch, R-Utah, and Sherrod Brown, D-Ohio, chairman and co-chairman, respectively, of the Joint Select Committee, will push the committee to stop playing politics and find a lasting solution.

Anyone claiming to be worried about fiscal issues should see resolution of this problem as an absolute must. After all, if this problem is not solved, the resulting disaster will become the basis for a gargantuan budget-busting bailout and the welfare state will grow and expand, as will the regulatory regime.

The responsible thing to do is solve this problem before it becomes a crisis. A workable solution that will actually solve the problem should include the following four elements.

First, Congress must reform the law governing the affected pension plans by requiring them to meet new, more rigorous and realistic actuarial standards. Pension plans must be required to operate in sustainable ways.

Second, stakeholders must share in the costs of returning pension plans to a firm footing. Retirees must accept modestly reduced benefits during the time period required to get the plan back on an actuarially sound foundation. The costs cannot be put disproportionately on any one party. Once the difficulty has passed, retirement benefits can return to levels that reasonable and responsible actuarial standards permit.

Third, for pension plans that make the needed and required reforms and demonstrate that they are serious about actuarial soundness, Congress should authorize short-term loan guarantees. With these loans, pension plans can get back on a firm financial and actuarial footing. These loans would be repaid because only those pension plans that did what was necessary to get back on a firm financial footing would qualify for them. In the end, the taxpayers will not be on the hook for the loan guarantees, or federal bailouts motivated by a financial crisis, or increased welfare expenditures caused by retirees losing their pensions. This is the fiscally responsible thing to do.

Fourth, Congress must reform the Pension Benefit Guaranty Corporation to make it function like a real insurer where risks and costs balance out. If nothing is done, the PBGC will be bankrupt within the next six years, leaving taxpayers on the hook to make good on its promises. That would cost taxpayers hundreds of billions. So reform is a must!

Americans of every political stripe and income group call upon the Joint Select Committee to work night and day in the coming weeks to find a long-term solution to the multiemployer pension plan crisis. Failure to do so would be an act of colossal political malfeasance. Conversely, by finding a fair and reasonable long-term solution, lawmakers will rightfully earn the praise of the nation.


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  #643  
Old 12-21-2018, 03:36 PM
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BAILOUT

https://www.enr.com/articles/46099-m...ely-until-2019

Quote:
Multiemployer Pension Fix From Congress Unlikely Until 2019

Spoiler:
A special congressional committee missed its Nov. 30 deadline for developing a plan to help troubled U.S. multiemployer pension plans. Panel leaders claimed to be making headway, but as the lame-duck session nears an end, construction officials say a solution probably will have to wait until next year and the new Congress.

Multiemployer plans are common in construction’s unionized sector. As of 2014, there were 759 such plans in the construction industry, or 53% of the total insured by the federal Pension Benefit Guaranty Corp. (PBGC). Construction plans had nearly 3.9 million participants, 37.5% of the multiemployer total.


Hatch
Sens. Orrin Hatch (R-Utah) and Sherrod Brown (D-Ohio), co-chairs of the Joint Select Committee on Solvency of Multiemployer Pension Plans, said on Nov. 29, “The problems facing our multiemployer pension system are multifaceted and over the years have proven to be incredibly difficult to address.”

Nevertheless, Hatch and Brown said they had “made meaningful progress” and think “a bipartisan solution is attainable,” and pledged to keep working toward a resolution. In a Dec. 14 statement to ENR, Brown’s office reiterated that point, saying he and other committee members “have made clear that they will continue working on this incredibly complex issue past the deadline in order to get it done right.”

James Young, Associated General Contractors of America senior director of congressional relations for labor, human resources and safety, notes, “Lame ducks are very unpredictable.” But Young says it is “rather unlikely” that the panel could draft legislation by the end of the session, which at ENR press time was scheduled for Dec. 21.


Brown
Sean McGarvey, president of North America’s Building Trades Unions, is looking ahead to 2019 for further multiemployer pension developments. He said in a statement that after the committee’s hearings, “Congress is much more educated on the issues impacting multiemployer pension plans and the PBGC, and we look forward to working with the new Congress on solutions that will work.”

Another construction source says of the outlook for multiemployer pension legislation, “In this Congress, it’s dead,” adding, “It will go into the new Congress.”

Still, Young says it’s possible that the joint committee could release “something short of a legislative proposal.” That could be a “common set of principles or something else to sort of guide them in the new year,” he says.

In the new Congress, Democrats will control the House, and the construction source expects multiemployer legislation to originate in that chamber’s Ways and Means and Education and Labor committees.

Ways and Means’ chairman-designate, Richard Neal (D-Mass.), introduced a bill in November 2017 that would have the Treasury issue bonds to fund loans, which in turn could particularly help the most troubled multiemployer plans. That 2017 legislation could provide a hint about what Neal might pursue in 2019. Brown introduced a similar bill in the Senate last year. He was re-elected in November and is expected to continue to pursue the pension issue. Hatch, however, is retiring at the end of the current Congress.

AGC, for one, favors a comprehensive approach that would include developing “composite” or “hybrid” multiemployer plans. They’re described as a combination of traditional defined-benefit pension plans and 401(k)-type “defined-contribution” retirement plans.

Young says that the hybrid plan concept “is not a solution for the deeply troubled plans,” such as the teamsters’ Central States plan. He adds, “But it is a solution for the healthy plans. And in the construction industry, by and large, most of our plans are healthy, more so than, say, trucking or other industries.”

Under the 2014 Multiemployer Pension Reform Act, the last major bill on the subject, ailing plans got the ability to petition the Treasury Dept. for permission to reduce plan benefits. So far, Treasury has approved nine such requests, including five from construction union plans.

Proposals from two of those multiemployer construction plans—one from a plasterers’ union local in Oregon, the other from a plasterers’ and cement masons’ union local in Pennsylvania—received Treasury approval on Nov. 8. Votes by the plans’ members on the benefit cuts were pending at ENR press time.

Though no overall fix has emerged in Congress yet, there is wide agreement that a remedy for multiemployer pension woes is needed. Marco Giamberardino, National Electrical Contractors Association executive director for government affairs, says, “This is a problem of tremendous magnitude to both employers and employees in the construction industry.” He says, “It is something that has to be addressed before we have a significant financial disaster on our hands.”

Young adds, “The issue, we always say, is: the longer you push this off, the more expensive it’s going to be to address.”


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Old 12-21-2018, 04:51 PM
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VALUATION

https://economics21.org/one-indispen...pension-reform

Quote:
The One Indispensable Multiemployer Pension Reform

Spoiler:
Multiemployer pensions are in crisis. Lawmakers established a joint select congressional committee in February 2018 to address the problem, but it was unable to forge an agreement by its November 30 deadline. Recent reports suggest no solution will be legislated this year, and that pension sponsors will push aggressively for an expensive ($30-$100 billion) taxpayer-financed bailout when Congress returns in the new year. This outcome would represent a costly public policy failure, and lawmakers should exert every effort to prevent it.

First, some brief background. Multiemployer pensions are private pensions cosponsored (as the name suggests) by multiple employers typically in the same industry. Funding for such a pension is negotiated with a union through a collective bargaining agreement. A foundational principle of multiemployer pensions is that if a worker’s sponsoring employer goes out of business, that worker can continue to accrue benefits if hired by another employer participating in the same plan. Even if the worker is not rehired and becomes a so-called “orphan worker,” the vested benefits that worker has accrued are still paid by the plan, financed by the remaining employer sponsors. This joint multiemployer responsibility to finance worker benefits is supposed to provide plans with an additional source of financial stability, relative to a pension sponsored by a single employer.

These intended financial safeguards, however, haven’t panned out. Multiemployer pension benefits are currently underfunded by more than $600 billion, with the result that projected insolvencies of certain multiemployer plans will surpass what the nation’s pension insurance system, operated by the Pension Benefit Guaranty Corporation (PBGC), can cover. The latest projections are that PBGC’s multiemployer insurance program faces a $54 billion shortfall and will be insolvent by 2025. If the pension insurance system goes belly-up, American workers will lose even benefits that were ostensibly insured. I have written previously about the causes of the problem and have outlined a framework for possible solutions.

Different experts and stakeholders have different perspectives on what would constitute a reasonably fair and effective solution to the crisis. I agree with those who argue that an imperfect solution now is better than a massive bailout later under chaotic crisis conditions. No one will get everything they want in bipartisan action on multiemployer pensions. Lawmakers should therefore focus on ensuring that at least the minimum necessary repairs are included in any corrective legislation.

One indispensable fix is correcting the mismeasurement of pension liabilities, which has done more than anything else to spur systemic pension underfunding and precipitate the current crisis. Specifically, this means fixing the discount rate that pension plan trustees use to translate future liabilities into present-value terms.

Why is something seemingly so technical as a discount rate so important? The reason is simple: a sponsor won’t fund a pension liability that it doesn’t recognize. When sponsors employ inflated discount rates, they shrink the apparent size of future pension liabilities, making them appear smaller in today’s terms than they actually are. Accordingly, whenever liabilities are mismeasured, employers don’t contribute enough funding to meet them. This is perhaps the single strongest reason why multiemployer plans have promised over $600 billion in benefits more than their contributions can fund.

Importantly in the current context, no solution will hold if the discount rate isn’t fixed. Reasonable people can disagree on what to do at this late point in the game; they can disagree on how much of the shortfall should be met by additional sponsor funding contributions, how much by additional premium assessments, how much through scaled-back benefit promises, and on whether federal resources should be tapped to pay orphan worker benefits. But it is not reasonable for plan sponsors to ask others to bail them out of their own benefit promises to their workers, while continuing to misreport their future obligations. It is especially unreasonable for sponsors to ask legislators to shoulder the enormous political risk associated with controversial pension rescue legislation, while at the same time continuing to misreport liabilities in a way that must create mounting pressure for more expensive future bailouts.

There is no significant disagreement among economists over how to properly measure pension liabilities. It is widely agreed that liabilities should be discounted according to their risk of nonpayment – which in this context would mean, at the very highest, a high-quality corporate bond rate matched to the duration of the pension liability. But plan actuaries and trustees have routinely disregarded these well-established economics principles, instead discounting their liabilities for funding purposes at rates of 7% or higher. As Northwestern professor James Naughton notes, “actuaries and standard setters have long known that this approach understates the actual obligations of the plan,” an understanding reflected in current financial accounting standards. “The [economics] profession has been nearly unanimous,” adds Stanford professor Joshua Rauh, that these inappropriate practices understate actual pension liabilities.

One should be aware that we have been down this road before. In 2005 (see Figure 1), the PBGC’s single-employer pension insurance program faced a solvency crisis. One of the critical reforms included in the 2006 PPA was to discount single-employer pension liabilities using a duration-matched “yield curve” of corporate bond interest rates.



During negotiations over the PPA, employer sponsors complained loudly about having to accurately measure their pension liabilities for funding purposes. But lawmakers held firm, and the fruits of their doing so can be seen in Figure 1: by the time of PBGC’s 2018 annual report, the deficit in PBGC’s single-employer pension insurance system was completely gone.

Unfortunately, the PPA did not include similar reforms for the multiemployer system. It was assumed that multiemployer plans could afford to have more lax funding rules, because multiple employers stood in the way of an insolvent multiemployer plan’s liabilities being dumped on the PBGC. But with PBGC’s multiemployer program now facing projected insolvency due to employers’ inability or unwillingness to fund their plans, any rationale for allowing multiemployer plans to continue to mismeasure their liabilities is long gone.

An objection raised by some sponsors is that accurately measuring their pension liabilities will result in funding contribution requirements that are both too onerous and too volatile. This argument was also made prior to the 2006 PPA reforms. It was wrong then and it is wrong now. Measurement accuracy and statutory funding requirements are two different things. If contribution requirements are too harsh and too volatile, this is a problem: but it is not a problem properly fixed by mismeasuring plan liabilities.

A plan’s liabilities are what they are; we don’t get to change their values simply to arrive at the funding schedule that we want. The appropriate way to tweak a contribution schedule is by adjusting the amortization periods over which funding standards must be met, as well as possibly placing a statutory cap on variance in annual contribution requirements.

Now, there may indeed be instances where, once a plan’s liabilities are properly measured, there is simply no funding schedule that can be devised over a reasonable time frame that does not result in contributions too onerous for the sponsor(s) to bear. If that is the case, however, it simply means that the sponsors cannot afford to fund the plan, and provision should be made for its orderly, least-cost termination. In that regrettable situation, nothing is gained by pretending the liabilities don’t exist; such pretense only makes the inevitable termination of the plan more protracted and more expensive. It should be remembered: once a sponsor asserts, “We cannot manage our plan if our liabilities are discounted at corporate bond rates,” they are confirming, in effect, “We cannot keep this plan solvent.” If that statement is made and accepted, it should close off any further discussion of subsidies, loans or other means of propping up inevitably insolvent plans.

Multiemployer pension reform is too difficult to allow the perfect to become the enemy of the good. Any bipartisan legislated solution is likely to leave some serious problems unfixed, and much of sponsors’ wish lists unfulfilled. But as Rauh puts it, what “the finance profession agrees is the right way to measure the solvency of a pension system should not be controversial.” Before legislators try to do anything else, they should agree right off the bat to measure pension liabilities correctly. If they don’t, nothing else they try is likely to work.

Charles Blahous is the J. Fish and Lillian F. Smith Chair and Senior Research Strategist at the Mercatus Center, a visiting fellow with the Hoover Institution, and a contributor to E21. He recently served as a public trustee for Social Security and Medicare.


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  #645  
Old 12-26-2018, 12:36 PM
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PARTITIONING

https://www.pionline.com/article/201...s-pension-plan
Quote:
PBGC grants partition application for local Plasterers & Cement Masons pension plan

Spoiler:
The Pension Benefit Guaranty Corp. approved a partition application and will provide early financial assistance to the Plasterers & Cement Masons Local No. 94 Pension Fund, Harrisburg, Pa.

In an announcement Thursday, the PBGC said its early financial assistance, together with benefit reductions that are required as a condition for receiving the assistance, will help the plan avoid insolvency and pay benefits to participants. Partitioning sets up a second plan to pay some benefits that the PBGC guarantees and is granted only if the changes will make a pension fund solvent for at least 30 years.

The Local 94 fund applied for the partition in April. At that time, the fund was projected to be insolvent in 2026 without both benefit cuts and the partition, and by 2029 without the partition. The pension fund covers about 100 participants and had $2.3 million in assets as of April 30, 2017, according to its latest Form 5500.

RELATED COVERAGE
Struggling multiemployer plans see help ahead at expense of healthy fundsLocal 805 Teamsters cleared for benefit reductions; IBEW Local 237 applies3 more multiemployer plans apply for benefit cuts
About 70 people will see an average reduction of 38% in benefits, PBGC spokesman Marc Hopkins said in an email. The benefits of about 30 participants will not be reduced because of the statutory protections for benefits of older and disabled participants and for participants whose benefits are equal to or less than 110% of the PBGC guarantee amount, he noted.

The financial assistance is effective May 1.

"This (action) will relieve some of the financial burden on the Cement Masons 94 Plan and, together with the benefit cuts, enable it to avoid insolvency," the PBGC said in a news release. "Plan participants whose benefits are moved to the new plan will be treated the same as participants whose benefits remain entirely in the original plan."


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Old 12-28-2018, 11:49 AM
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BENEFIT CUTS

https://burypensions.wordpress.com/2...uts-finalized/

Quote:
Local 94 Benefit Cuts Finalized
Spoiler:
The Plasterers and Cement Masons Local No. 94 Pension Fund out of Harrisburg, PA got government approval for benefit cuts last month and, after a voting process that even Floridians would be find barbaric, last Thursday the results of the participant vote were announced:


The voting period began on November 21, 2018, and ended on December 13, 2018. The Fund identified 106 participants and beneficiaries as eligible to vote. Of the voters identified by the Fund who received a ballot, 26 (or 25 percent of all eligible voters) voted to reject the benefit reduction, 12 voted to approve the benefit reduction, and 66 did not return a ballot. Because a majority of voters identified as eligible by the Fund did not vote to reject the benefit reduction, the benefit reduction is permitted to go into effect.

As for those reductions:

Treasury, in consultation with DOL and PBGC, has issued a final authorization to reduce benefits under the Fund as described in the Application, effective May 1, 2019

From that application:



From their latest 5500:

Plan Name: Plasterers and Cement Masons Local 94 Pension Fund
EIN/PN: 23-6445411/001
Total participants @ 4/30/17: 116 including:
Retirees: 61
Separated but entitled to benefits: 15
Still working: 40

Asset Value (Market) @ 5/1/16: $2,315,124
Value of liabilities using RPA rate (3.22%) @ 5/1/16: $9,126,112 including:
Retirees: $6,173,809
Separated but entitled to benefits: $1,036,580
Still working: $1,915,723

Funded ratio: 25.37%
Unfunded Liabilities as of 5/1/16: $6,810,988

Asset Value (Market) as of 4/30/17: $2,271,082
Contributions (MB): $358,403
Contributions (H): $425,245
Payouts: $618,985
Expenses: $82,062


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Old 12-31-2018, 06:46 AM
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BAILOUT


https://burypensions.wordpress.com/2...look-for-2019/

Quote:
Multiemployer Plan Bailout Outlook for 2019
Spoiler:
The Road Carriers Local 707 Pension Fund is broke, thus being the multiemployer plan most desperate for a bailout. After the failure of the Bailout Committee below is what the Fund administrators are telling plan participants to expect.


The Joint Select Committee (JSC) established by Congress in early 2018 did not meet the statutory deadlines for making recommendations (November 30) or enactment of those recommendations (end of calendar year 2018). Currently, there are no plans to reauthorize the JSC in 2019 and consequently any legislation addressing the multiemployer pension crisis next year will be handled under the normal committee process. For multiemployer pension legislation those committees are: House Ways and Means, House Education and Workforce, Senate HELP, and Senate Finance.
Although the Joint Select Committee did not result in the enactment of legislation addressing the crisis, it did develop an extensive hearing record and analysis of options from the Congressional Budget Office (CBO), the Office of Management and Budget (OMB), the Joint Tax Committee (JTC), Treasury Department and the Pension Benefit Guaranty Corporation (PBGC). For those Senators and Congressmen who want to advance legislation next year, they will not be starting from scratch but will have access to that hearing record and the extensive agency analyses.
Democrats will assume their majority position on January 3 when the 116th Congress is sworn in. At that time, and barring any last minute drama, Rep. Nancy Pelosi (D-CA) will become Speaker of the House. Throughout 2018, Minority Leader Pelosi had a strong personal interest in the work of the Joint Select Committee and has already made commitments as Speaker that pension legislation will be an early priority for the House of Representatives in 2019.
With the Democratic takeover of the House, Rep. Richard Neal (D-MA) will become Chairman of the House Ways and Means Committee and Rep. Robert Scott (D-VA) will become Chairman of the House Education and Workforce Committee. Both Neal and Scott were members of the JSC and perhaps more importantly were primary sponsors of the so-called “Butch Lewis” legislation (H.R. 4444) in the 115th Congress. Throughout the deliberations of the JSC, Neal and Scott maintained their support for a loan program patterned after the Butch Lewis legislation and can be expected to continue that support in 2019.
Upon adjournment of the 115th Congress (likely to be this week), all legislation expires and must be reintroduced next year including H.R. 4444 (and its Senate counterpart, S. 2147). H.R. 4444 has 174 cosponsors, 160 Democrats and 14 Republicans. With the support of Pelosi, Neal and Scott, it’s very likely that the House will act on multiemployer pension legislation (patterned after, if not identical to, H.R. 4444) early in 2019.
As a result of the November elections, Republicans increased their majority position from 51-49 to 53-47. Consequently, Sen. Mitch McConnell (R-KY) will return as Senate Majority Leader and Sen. Chuck Schumer (D-NY) will return as Senate Minority Leader. Both McConnell and Schumer have strong constituent interests in the multiemployer pension crisis, the latter having that interest from both the Teamster Local 707 Fund and the New York State Teamsters Pension Fund. With the retirement of Sen. Orrin Hatch (R-UT), the chairmanship of the Senate Finance Committee will go to Sen. Chuck Grassley (R-IA). Unlike Hatch, Grassley was not a member of the Joint Select Committee, but he has a more direct constituent interest (Central States) and is very aware of the crisis facing that fund. The situation at the Senate HELP Committee this week became a little more complicated. The current Chairman, Sen. Lamar Alexander (R-TN), announced he will not seek reelection in 2020, thus becoming a lame duck chairman for the next two years. Alexander was a member of the JSC but his status as a lame duck chairman raises questions about his commitment to shepherding a legislative solution through the Republican-controlled Senate in 2019.
The two primary Senate sponsors of S. 2147, Senators Sherrod Brown (D-OH) and Joe Manchin (D-WV), won reelection in November and can be expected to immediately reintroduce a version in 2019. Both Brown and Manchin were members of the Joint Select Committee and have strong constituent interests in multiemployer pension plans. S. 2147 has 24 cosponsors but all 24 are Democrats. In the absence of any Republican support for a loan program patterned after S. 2147, it is difficult to envision the Senate moving on multiemployer pension legislation as quickly as the Democratic-controlled House in 2019.
The two major takeaways from the work of the Joint Select Committee were: all 8 Democratic members strongly supported some type of loan program but were willing to consider other options in addition to the loan program; a majority of Republican members (though not necessarily all 8) strongly opposed a loan program and preferred a solution that relied on the PBGC to assume a significant portion of the financial crisis (hence the “orphan liability transfer” option contained in the November draft document). Those are two vastly different approaches so it’s not difficult to understand why the Joint Select Committee could not reach a consensus recommendation.
Looking to 2019, it’s very likely the House will act quickly on a reintroduced version of the Butch Lewis loan program. It then becomes a question of whether the Senate (under the leadership of Senators McConnell, Grassley, and Alexander) approves that legislation (highly doubtful) or develops an alternative patterned after the “orphan liability transfer” option (more likely) and then goes to a House-Senate conference committee to hammer out a compromise. There is, of course, a third option for the Senate: do nothing. While that might be an attractive option for the more conservative Republicans in the Senate, the Republican leadership has to be mindful that 22 Senate Republicans are up for reelection in 2020, many of whom have constituencies covered by the Central States, Mine Workers, and other multiemployer funds in critical and declining status.
It is expected Rep. Richard Neal (D- Massachusetts) and Rep. Peter King ( R- NY) will co-sponsor the reintroduction of the Butch Lewis in the first or second week of January. Both are committed to lobbying their colleagues on both sides of the aisle to pass meaningful pension reform in the early part of 2019. As always, Senator Chuck Schumer is continuing the fight in the Senate and making sure Local 707 is included in any pension reform. A coordinated lobbying strategy is being developed with the IBT and other pension funds. Shortly you will be asked again to write, email and call key players who will influence any pension reform legislation.

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Old 01-06-2019, 05:35 PM
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UNITED MINE WORKERS

https://burypensions.wordpress.com/2...kers-update-3/

Quote:
United Mine Workers Update (3)
Spoiler:
Update 1: 4/29/17

Update 2: 5/8/18

On Thursday, U.S. Sens. Mark R. Warner and Tim Kaine (both D-VA) “introduced the American Miners Act of 2019, legislation that would secure pensions and healthcare benefits for our nation’s retired coal miners – including 500 Virginians affected by the recent bankruptcy of a Colorado-based mining company” by, in part, transferring money “to the 1974 Pension Plan to prevent its insolvency.” Where will the money come from?


The bill is fully paid for through two provisions:
By extending for ten years the Black Lung Disability Trust Fund tax at $1.10 per ton of underground-mined coal and $0.55 per ton of surface-mined coal (up to 4.4% of the sales price). This tax is critical for supporting the Black Lung Disability Trust fund, which provides healthcare and benefits to more than 25,000 miners and their dependents.
By permitting in-service distributions under a pension plan or a governmental section 457(b) plan at age 59, thus making the rules for those plans consistent with the rules for section 401(k) plans and section 403(b) plans.
It would be interesting to see how that second revenue item was calculated. Are there that many government employees still working at age 59-1/2 who are anxious to dip into their retirement funds? For that matter, are there that many government employees still working at age 59-1/2? And if they do take those in-service distributions wouldn’t that just mean lower payouts (and less tax money for the government) in future years?

From the latest 5500 filing:

Plan Name: United Mine Workers of America 1974 Pension Plan
EIN/PN: 52-1050282/002
Total participants @ 6/30/17: 95,990 including:
Retirees: 86,240
Separated but entitled to benefits: 6,264
Still working: 3,486

Asset Value (Market) @ 7/1/16: $3,140,357,000
Value of liabilities using RPA rate (3.18%) @ 7/1/16: $9,469,205,752 including:
Retirees: $8,236,471,290
Separated but entitled to benefits: $525,877,608
Still working: $706,856,854

Funded ratio: 33.16%
Unfunded Liabilities as of 7/1/16: $6,328,848,752

Asset Value (Market) as of 6/30/17: $2,924,500,716
Contributions H-Employers: $21,161,542
Contributions H – Others: $150,893,298
Contributions MB: $31,326,000
Payouts: $662,028,791
Expenses: $29,158,926
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Old 01-07-2019, 11:23 AM
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BAILOUT

https://www.concordmonitor.com/Stand...niors-22545910

Quote:
Editorial: Retirement crisis is here, and growing

Spoiler:
For more and more Americans, retirement is the fiscal equivalent of setting seniors adrift on ice floes.

Half the people approaching retirement age have neither savings nor a retirement pension, according to the Government Accounting Office. The 401(k) retirement savings plans that replaced the once ubiquitous defined benefit pension plans have largely failed in their mission to guarantee the elderly a financially secure old age.

Seniors now account for 12.2 percent of all bankruptcy filings, a rate two or three times higher than a few decades ago.

The constituency of New Hampshire’s congressional delegation, Sens. Jeanne Shaheen and Maggie Hassan and Reps. Annie Kuster and Chris Pappas, is the second oldest in the nation. Some of the state’s seniors have already succumbed to financial distress, others are on the brink.

The new Congress, with Democrats in control of the House, will consider a range of legislation aimed at making old age less perilous, but most changes will come too late to help the baby boomers who are going broke. Do nothing and the percentage of people over age 62 who live in poverty or near poverty will increase by 25 percent by 2045, economist Teresa Ghilarducci warned last summer in Forbes magazine.


What, we wonder, will New Hampshire’s congressional delegation do? What should they do?

First, if they haven’t already done so, they should join the bipartisan effort to pass bills geared to increase the financial security of all Americans. One-third of all employees, some 40 million people, work for employers who do not offer a retirement plan. One bill includes incentives to induce companies to offer a retirement savings plan, though no one expects a return to the good old days of ample, guaranteed monthly checks for life.

The delegation should support efforts, if called for, to shore up the Pension Benefit Guarantee Corp., the agency that makes good, up to a point, on employee pensions when a company goes belly up.

The delegation should join the effort, led by Ohio Congressman Tim Ryan, to change bankruptcy laws, which allow companies, and the hedge funds that buy them, to strip them of assets and use bankruptcy to stick taxpayers with the company’s pension obligations. That’s what Sun Capital Partners, a Florida private equity firm, did when several of its holdings, among them the Friendly’s restaurant chain, went bankrupt.

Since 2013, private equity firms like Sun Capital have dumped $650 billion in pension obligations on the government through the bankruptcy process.

Employees typically agree to lower wages in exchange for more financial security when their working days are over. Pensions are, in a sense, deferred wages. Ryan’s bill would give far higher priority to pension obligations in the bankruptcy process, making them debts that must be paid before most others. That change would protect employees and taxpayers, who are the ultimate guarantor behind the Pension Benefit Guarantee Corp.

Some 10,000 baby boomers retire every day. An increasing number of them are expected to become both old and poor. There’s been a bipartisan call in Congress to convene a commission to consider how to respond to what some fear could soon become a retirement crisis. Members of New Hampshire’s delegation should be on that commission.



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Old 01-07-2019, 11:24 AM
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MINE WORKERS

https://www.scribd.com/document/3967...e-Pager-1-2-19

Quote:
The American Miners Act of 2019

Spoiler:
As a result of the 2008 financial crisis and coal bankruptcies, our nation’s retired miners are at risk of losing
their hard-earned pension benefits. The United Mine Workers of America (UMWA) 1974 Pension Plan is on the road to insolvency by 2022

and even sooner if we see additional bankruptcies.
Our nation’s coal miners made a commitment to provide our nation with the energy we needed to power
our nation to prosperity. They did so time and time again even when it risked their health and their lives. It is time for us to keep our full promise to them and ensure their pension benefits are not lost.
Protecting American Miners
This bill amends the Surface Mining Control and Reclamation Act of 1977 to transfer funds in excess of the amounts needed to meet existing obligations under the Abandoned Mine Land fund to the 1974 Pension Plan to prevent its insolvency. It also raises the cap on these funds from $490 million to $750 million to ensure that there is sufficient funding. The legislation would protect the pensions of 87,000 current beneficiaries and 20,000 more who have vested for their pensions but have not yet begun drawing them. It would also ensure that the miners who are at risk due to the 2018 bankruptcies of both Westmoreland and Mission will not lose their healthcare. This bill amends the Coal Act to include 2018 bankruptcies in the
miners’ healthcare fix that passed in 2017.
The bill is fully paid for through two provisions: 1.

By extending for ten years the Black Lung Disability Trust Fund tax at $1.10 per ton of underground-mined coal and $0.55 per ton of surface-mined coal (up to 4.4% of the sales price). This tax is critical for supporting the Black Lung Disability Trust fund, which provides healthcare and benefits to more than 25,000 miners and their dependents. 2.

By permitting in-service distributions under a pension plan or a governmental section 457(b) plan at age 59, thus making the rules for those plans consistent with the rules for section 401(k) plans and section 403(b) plans.
Facts Regarding the 1974 Pension Plan
1.

The fund was started in 1946 under an executive order of President Harry Truman and constituted a
federal guarantee to the health and welfare of coal miners, creating a “last man’s standing” multi
-employer and retirement system for them and their dependents. 2.

In 1974, the Employment Retirement Income and Security Act of 1974 caused the above-mentioned fund to split into two separate funds, with the 1974 Pension Plan providing pension benefits to eligible miners who worked on or after January 1, 1976. 3.

As a result of extremely depressed coal markets, coal company bankruptcies, layoffs, consolidation, an oppressive regulatory environment and other factors there has been a dramatic decrease the level of employer contributions to the 1974 Plan.
The need to act now
As both UMWA and industry representatives have educated Members of Congress and their staffs, if the UMWA 1974 Pension Plan collapses beneficiaries and their dependents will be dropped into the Pension Benefit Guaranty Corporation (PBGC), destroying that program and requiring the American taxpayer to foot the bill instead of the private sector companies. UMWA 1974 Plan actuaries currently expect the Plan to become insolvent in the 2022-2023 time-frame, however any market downturn will rapidly accelerate insolvency.

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