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  #471  
Old 02-01-2017, 06:38 PM
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CHURCH PLANS

https://burypensions.wordpress.com/2...risis-looming/

Quote:
It could be another trillion dollars in unfunded Defined Benefit pensions either picked up by taxpayers or defaulted upon. Fox Rorthschild’s newsletter For Your Benefit presents the situation in an article on page 4:

Quote:
In early December, the United States Supreme Court announced that it will hear three consolidated cases to decide whether pension plans established by religiously-affiliated employers are entitled to the same treatment as plans established by churches. All three cases involve defined benefit pension plans maintained by church-affiliated healthcare systems; in each case, lower courts have ruled that the plans are not exempt from ERISA and must comply with all plan qualification requirements.
…..
Three years ago, participants, concerned about their benefits (and knowing that PBGC guarantees will not be available), began to file lawsuits claiming that the plans maintained by their religiously-affiliated employers should not be church plans and should not be exempt from ERISA. The Supreme Court agreed to hear these cases because the appellate courts in the Third, Seventh and Ninth Circuits have ruled in favor of the plaintiff employees, while district courts in other circuits have taken the contrary position.
….
A decision that plans maintained by religiously-affiliated employers are not church plans reportedly could affect millions of employees across the country and trigger pension funding liabilities in the billions of dollars.
Today we got:

Quote:
Text of Amicus Brief of U.S. to Supreme Court on Definition of Church Plan (PDF)
U.S. Department of Labor [DOL]; Pension Benefit Guaranty Corporation [PBGC]; U.S. Department of the Treasury; and U.S. Department of Justice
Why are these government agencies so anxious to keep these ‘church’ plans exempt from ERISA?

Because they might be the worst funded Defined Benefit plans in the country and, unlike government or union plans which have some value assigned to liabilities in either a CAFR or 5500 filing, the only place these church plan liabilities appear is in Schedule D, Part X of the sponsor’s 990 form.
Without any funding requirement many of these plans may already be in pay-as-you-go mode with massive unfunded liabilities that would stretch the resources of government agencies that could be charged with overseeing their solvency. Hence, the reason for punting.
the amicus brief:
https://www.justice.gov/sites/defaul...itedstates.pdf
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  #472  
Old 02-07-2017, 05:27 PM
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http://www.timesunion.com/tuplus-loc...e-10886735.php

Quote:
St. Claire's retirees fear being left out in cold with no recourse when fund dries up

John Owens, a retired finance official, has one solution to the personal finance crisis facing him since being informed his former employer's pension fund will dry up as early as 2024.
"It means when I turn 80, I need to die," said the 72-year-old Owens. The Menands resident retired from his job as St. Clare's Hospital's chief financial officer in December 2005 after working there 18 years.

Owens is among more than 1,100 employees of the Schenectady hospital, closed nine years ago, to receive a letter in October warning their pension monies could be depleted within the next decade. He and his wife derive two-thirds of their income from the pension.

Many Americans under similar circumstances would turn to the federal government. But there's no federal guarantee for St. Clare's pension fund, and no obvious other entity responsible for making good on its promise of retirement income to workers.
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  #473  
Old 02-07-2017, 05:39 PM
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NEW YORK

https://www.dnainfo.com/new-york/201...d-pension-fund

Quote:
Park Slope Food Co-op Rejects More Oversight of Troubled Pension Fund

PARK SLOPE — Park Slope Food Co-op members rejected a proposal Tuesday to put a committee in charge of its employee pension fund, which was until recently invested in a handful of volatile biotech stocks chosen by one person.

Co-op members voted 472 to 152 against a plan to put the troubled pension fund into the hands of a committee that would oversee its investment moves, the Food Co-op announced on Twitter.

Members floated the idea of forming the committee after the pension fund's up-and-down performance came to light earlier this year.

The pension, a benefit that's available to the co-op's paid employees, lost almost 20 percent of its value in one recent year and was underfunded by $3.1 million, according to the Wall Street Journal, which first reported on the pension problems.

A co-op member had been overseeing the pension fund's investments and stepped down after the problems surfaced. Another co-op member then took control of the fund.

But some co-op members thought decisions about the pension fund would be better handled by a group rather than one person. They proposed forming a pension fund oversight committee and their idea was put to a vote at Tuesday night's co-op meeting.

The members who wanted the oversight committee were worried the pension fund's losses could eventually affect the co-op's core mission of providing cheap food to member shoppers, because the co-op could be forced to dip into its operating budget to plug pension fund shortfalls, co-op member Eric McClure said in an interview.

McClure was part of the small group of co-op members who proposed creating the oversight committee. He said Tuesday's vote was a disappointment.

"The intent [of forming the committee] was to shore up the pension fund and to make sure there were some other eyes on it so the risky investments that were made in the past aren’t made again," McClure said.


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  #474  
Old 02-07-2017, 05:42 PM
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https://www.ft.com/content/23945c44-...b-c88452263daf

Quote:
Buy an artwork — fund an artist’s pension
Forthcoming auction designed to paint a happier retirement for modern artists

Painting through the night in a tumbledown studio in Montmartre, Paris, the young Pablo Picasso was sometimes so strapped for cash he would exchange his paintings for food or fresh supplies of canvas and paint.

History books are replete with artists bartering their work to make ends meet as they struggled to make a name for themselves, without the benefits of a regular salary, sick pay or pension conferred by employed work.

Now a scheme designed to give modern-day artists a measure of long-term financial security is on the cusp of a landmark sale, with the announcement of the first auction of works it has accumulated over 13 years.

The Artist Pension Trust was set up in 2004 to help artists build up and sell a store of works that would provide a stream of returns over the long term and spread the benefits of a rising reputation. With over 13,000 works by 2,000 artists — each of whom have agreed to hand over 20 works over around 20 years to the trust — it pledges to hold and release them to the market, using the proceeds for the creator’s benefit as well as that of other artists in the pool.

Vetted by a curatorial group, applicants or invitees regarded as worthy of consideration will generally be those selling single works for a minimum of $5,000 (3,990) but the roster includes unknown and young artists as well as feted Turner Prize winners. To avoid the problem of people submitting substandard art and relying on others’ efforts, APT stipulates that artists should submit work “of median current market value, representative of that year’s output” — though not of a physical scale that makes it difficult or excessively costly to handle.
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  #475  
Old 02-13-2017, 06:52 AM
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LL BEAN

http://www.seattletimes.com/business...rs-early-outs/

Quote:
FREEPORT, Maine (AP) — L.L. Bean is moving to cut costs by freezing pensions and offering voluntary early retirements, and company officials say they are taking a hard look at its generous shipping and return policies.

The Freeport-based outdoors retailer will freeze its defined-benefit pension plan and boost its 401(k) savings contributions to all 5,000 workers, including 1,000 out-of-state store employees who were not previously eligible for the full pension, company officials said.

.....
The privately held company expects to reduce its workforce by about 500 workers — about 10 percent — through early retirement incentives, said CEO Steve Smith. Other employment changes include more flexible time off, paid parental leave and paid eldercare support, benefits employees have been seeking, he said.

The employment changes were announced by Smith in a memo and in meetings with workers Thursday.

....
The pension move is no big surprise in a challenging retail environment. L.L. Bean’s sales were flat in 2015, and growth for the five years before that was slow.

Nationwide, the private sector has been eliminating pensions. In 2015, about one-fifth of Fortune 500 companies offered a traditional or hybrid defined benefit plan to new hires, down from 60 percent in 1998, according to business consulting firm Willis Towers Watson .

http://www.foxbusiness.com/markets/2...arly-outs.html

Quote:
APNewsBreak: L.L. Bean freezes pension, offers early outs
FREEPORT, Maine – L.L. Bean will freeze its pensions and offer an early retirement program next year as it seeks to control growing expenses.

The Associated Press has learned that Steve Smith, the Maine-based retailer's CEO, is making the announcement in a memo and in meetings with workers on Thursday.

Smith tells the AP that the actions are aimed at cutting costs to invest in future growth. Companies have been moving away from defined benefit pension plans for more than a decade. L.L. Bean says it is going to enhance its existing 401(k) retirement program.

Company officials also say they are taking a hard look at L.L. Bean's generous shipping and return policies.

The employment changes go into effect next year.
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  #476  
Old 02-13-2017, 06:52 AM
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SEARS

http://www.reuters.com/article/us-se...-idUSKBN15P1I1

Quote:
Beleaguered retailer Sears Holdings Corp (SHLD.O) said on Friday it would cut costs by $1 billion and reduce debt and pension obligations by at least $1.5 billion this year, sending its shares soaring as much as 40 percent.

The company also said it had sold five Sears full-line stores and two Auto Centers for $72.5 million in January, and had engaged Eastdil Secured to raise at least $1 billion from the sale of its real estate.

....
Sears said it would use proceeds from asset sales, improving profitability and working capital management to reduce its debt and pension obligations by $1.5 billion in fiscal 2017.

The company had pension and post-retirement benefit liabilities of $2 billion and long-term debt of $3.7 billion as of Oct. 29.

Up to Thursday's close, Sears shares had fallen 63.7 percent in the past 12 months. The broader S&P 500 retailing index .SPXRT had risen 31 percent in the same period.

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Old 02-14-2017, 10:59 AM
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UNITED KINGDOM
BMW

https://www.theguardian.com/business...pension-scheme

Quote:
Unite workers at BMW threaten action over plans to shut UK pension scheme
Len McCluskey warns of ‘serious industrial action’ by UK staff if carmaker persists with scrapping pension scheme despite record profits

More than 7,000 BMW workers are threatening industrial action over the German carmaker’s plans to shut the final salary pension scheme.

A warning that “serious industrial action will occur” if the company presses ahead with the plans is carried in a letter sent by Len McCluskey, leader of the Unite union. He is due to hold talks with senior management at the car giant’s Mini plant in Cowley, Oxfordshire, next Monday.

BMW, which made record pre-tax profits of €9bn (7.6bn) in 2015, intends to close two defined-benefit pension schemes to future contributions from June 2017, and shift workers over to its less generous defined-contribution pension scheme. The changes affect workers at all the company’s British bases, including the plants at Cowley and Swindon, the Rolls-Royce plant at Goodwood near Chichester in West Sussex, Hams Hall near Birmingham, and Farnborough in Hampshire.


The Guardian UK: Politics Weekly The housing crisis, the Brexit bill and the French election – Politics Weekly podcast
Heather Stewart is joined by Polly Toynbee, Ryan Shorthouse and John Healey to discuss the passage of the Brexit bill through the Commons and the government’s new housing strategy. Plus we hear from Labour’s leader in the Lords, Baroness Smith, and Angelique Chrisafis on the French election
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Unite said it had put forward “affordable proposals” that would have kept the schemes open but said BMW has indicated it will close as originally planned.

The Unite general secretary said there was growing anger among BMW’s British staff, with 96% indicating a willingness to take industrial action in a consultative ballot. “It is evident that, if we do not resolve the differences that exist, then the likelihood of serious industrial action will occur,” he added.

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  #478  
Old 02-17-2017, 04:03 PM
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TATA STEEL
UNITED KINGDOM


http://www.bbc.com/news/uk-wales-politics-38971675

Quote:
Tata Steel: Union workers back new pension plan

Thousands of Tata steelworkers have overwhelmingly backed a deal on the future of their pensions.
They were asked whether they would accept moving from a final salary pension to a less generous scheme.
Members of three unions at sites in Wales, Scotland, South Yorkshire and Teesside all supported the new proposals.
Tata's offer included a 1bn investment commitment at Port Talbot and no compulsory job losses.
The three unions at the Indian company's UK plants had recommended that their members, including 6,300 Tata workers in Wales, accepted the deal.
"This result provides a mandate from our members to move forward in our discussions with Tata and find a sustainable solution for the British Steel Pension Scheme," Roy Rickhuss, the general secretary of Community union, said.

Its members backed the new deal by 72% in favour compared to 28% against, with a turnout on the vote of more than 70%.
Tony Brady, Unite's national officer, said Tata must now honour its commitments on investment.
"Nothing less would be a betrayal and add to the deep mistrust that steelworkers now have for the company," he said.
His members supported the pension offer with 76% voting in favour, while GMB union steelworkers also voted in favour by 74%.

https://www.pressreader.com/india/th...81505045974864
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Old 02-17-2017, 04:10 PM
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IRELAND

http://www.irishtimes.com/business/p...sion-1.2977788

Quote:
Just one in three private sector workers have a pension
Standard Life survey finds nearly 60% of those without pensions don’t know how to get one


Only one in three private sector workers have a pension, a survey has found, raising further fears about how people will fund their retirement. The Standard Life survey also found that 60 per cent of those without a pension say they don’t know how to start one.
The recent survey of 1,005 adults found that while one in two of all respondents have a pension, when public sector workers are stripped out it leaves just over a third or 36 per cent, of private sector workers with a fund for retirement.
This is in line with figures from the Central Statistics Office (CSO), which last May found that just one in three Irish private sector workers owned a pension. However, while it may appear that two thirds of private sector workers will be relying solely on the State pension to fund their retirement, they may of course have alternative plans, such as inheritance, property and so on.
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Old 02-20-2017, 04:48 PM
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PBGC

http://www.gao.gov/assets/690/682765.pdf

Spoiler:

Why Area Is High
Risk

Pension Benefit Guaranty Corporation
Insurance Programs

With nearly $100 billion in assets, the Pension Benefit Guaranty
Corporation’s (PBGC) financial portfolio is one of the largest of any
federal government corporation. Through its single-employer and
multiemployer insurance programs, PBGC insures the pension benefits of
nearly 40 million American workers and retirees who participate in nearly
24,000 private-sector defined benefit plans. PBGC’s financial future
remains uncertain, due in part to a long-term decline in the number of
traditional defined benefit plans and the collective financial risk of the
many underfunded pension plans that PBGC insures. We designated the
single-employer program as high risk in July 2003 and added the
multiemployer program in January 2009.
Since fiscal year 2013, PGBC’s financial deficits have more than doubled.
At the end of fiscal year 2016, PBGC’s net accumulated financial deficit
was over $79 billion—an increase of about $44 billion since 2013. At the
same time, PBGC estimated that its exposure to future losses for
underfunded plans was nearly $243 billion.1 The single-employer
program, composed of about 22,200 plans, accounted for $20.6 billion of
PBGC’s overall deficit (see figure 21). The multiemployer program,
composed of only about 1,400 plans, accounted for about $59 billion.
According to PBGC, these dramatic increases were attributable to broad
economic factors and financial conditions of the plans PBGC insures.

Various laws have been enacted to strengthen PBGC’s financial position.
For instance, the Pension Protection Act of 2006 (PPA) strengthened
pension funding requirements for plans,2 the Moving Ahead for Progress
in the 21st Century Act (MAP-21) included measures to increase premium
rates3 and the Bipartisan Budget Act of 2013 increased premium rates
further.4 However, some of this legislation also included provisions that
would allow single employer plan sponsors to defer mandatory
contributions to their defined benefit pension plans.5 To the extent that
sponsors reduce contributions in the short term, they may increase plan
underfunding and expose PBGC to greater risk. Recognizing the dramatic
increase in PBGC’s deficit because of particular financial and
demographic challenges facing many multiemployer plans, the
Multiemployer Pension Reform Act of 2014 (MPRA) was enacted in
December 2014 with a number of provisions to promote the long-term
viability of the multiemployer program.6

-----
What GAO Found

As with our last report in 2015, there is no rating for this high-risk area
because addressing the issues in this area primarily involves
congressional action, while the high-risk criteria and subsequent ratings
were developed to reflect the status of agencies’ actions and the
additional steps they need to take.
While PBGC faces a significant long-term challenge with its singleemployer
program, it faces an immediate and critical challenge with its
multiemployer program. In a 2013 report, we recommended that
Congress consider comprehensive and balanced structural reforms to
reinforce and stabilize the multiemployer system.7 In December 2014,
Congress took action to address the growing crisis in the multiemployer
pension system by passing MPRA, which enacted several reforms
responsive to our 2013 report on PBGC’s multiemployer program.8
Specifically, MPRA provided severely underfunded plans, under certain
conditions and only with the approval of federal regulators, the option to
reduce the retirement benefits of current retirees to avoid plan insolvency9
and expanded PBGC’s ability to intervene when plans are in financial
distress.10 In addition, MPRA doubled the premiums paid by
multiemployer plans (from $13 to $26 per participant).11 While these
reforms are intended to improve the program’s financial condition,
projections suggest that the future insolvency of the multiemployer
program remains likely. Prior to passage of MPRA, PBGC estimated that
the multiemployer insurance fund would likely be exhausted by 2022 as a
result of current and projected plan insolvencies. PBGC officials noted
that the act did not fully address the crisis in the multiemployer program
and they predict that the changes will only forestall insolvency of the
program probably by about an additional 3 years. Current estimates
indicate that these changes will allow some plans to stay solvent and will
reduce the cumulative unmet need for financial assistance to
multiemployer plans by about half. As of January 2017, 10 pension plans
had submitted 11 applications to suspend benefits under MPRA. (4
applications have been denied, 2 were withdrawn, 4 are under review,
and 1 has been approved.) In addition, the Bipartisan Budget Act of 2013
and the Bipartisan Budget Act of 2015 increased premium rates for the
single-employer program.12
PBGC continues to face long-standing funding challenges for its singleemployer
insurance program as well, due to an overall decline in the
defined benefit pension system. While tens of thousands of companies
continue to offer traditional defined benefit plans, the total number of
plans has declined significantly, as has participation in those plans. Since
1985, there has been a 79 percent decline in the number of plans insured
by PBGC to 23,769 plans in 2014 and more than 11 million fewer workers
are actively participating in these plans. As a result, PBGC’s premium
base has been eroding over time as fewer sponsors are paying premiums
for fewer participants.
Additionally, the structure of PBGC’s premium rates—a key component of
PBGC’s funding—has long been another area of concern. Despite
periodic increases in premium rates, which are set according to statute,
the level of premiums has not kept pace with the magnitude and
multiplicity of risks that PBGC insures against.13 Moreover, plan
underfunding is the only risk factor currently considered in determining a
sponsor’s premium rate. Since 2011, the administration has proposed
legislative reforms that would authorize the PBGC board to adjust
premiums and to explore designing a more risk-based premium structure.
Under the current premium structure for its single-employer program,
PBGC collects from sponsors a per-participant flat-rate premium and a
variable-rate premium that is based on a plan’s level of underfunding.14 In
2012, we recommended that Congress consider authorizing a redesign of
PBGC’s premium structure for single-employer plans to allow
incorporation of additional risk factors, such as consideration of a
sponsor’s financial health. PBGC officials stated that they have continued
efforts to enhance understanding of alternative premium structures by
analyzing the limitations of the current system and by modeling various
alternative risk-based options. However, to date no legislation
incorporating additional risk factors into PBGC’s premium structure has
been enacted.
PBGC’s governance structure is another area of weakness noted in
several of our past reports. In particular, we have long recommended that
PBGC’s board—currently composed of the Secretaries of the Treasury,
Commerce, and Labor—be expanded to include additional members with
diverse backgrounds who possess knowledge and expertise useful to
PBGC’s mission. This recommendation has not yet been enacted into
law, but MAP-21 included provisions to improve PBGC’s governance by
prescribing in greater detail the working relationships between its Board
of Directors and its Inspector General, General Counsel, Advisory
Committee, and Director.15 It also called for the National Academy of
Public Administration (NAPA) to review PBGC’s governance structure
and to report on the ideal size and composition of its board.16 In its
September 2013 report, NAPA recommended to Congress that if the
agency is provided greater responsibility over its policies, PBGC’s board
should be expanded.17 Furthermore, we have long emphasized that
PBGC requires strong and stable leadership to ensure that it can meet its
future financial challenges.
In August 2016, the Secretary of Labor provided updated information
related to several of these areas of concern. Regarding the long-term
financial stability of both insurance programs, the Secretary noted that the
President’s 2017 budget again proposed that the PBGC Board be granted
the authority to adjust premiums, and with that authority directed the
Board to raise $15 billion in additional premium revenue from the
multiemployer program. With regard to the recommendation to improve
PBGC’s governance structure, the PBGC Board has declined to pursue
the matter further absent authorizing legislation. PBGC has recently
established an Enterprise Risk Management function and plans to hire a
Risk Management Officer to identify and determine appropriate actions to
mitigate the risks identified. As of October 2016, PBGC had not yet filled
this position or determined the areas of potential risk to be targeted.

What Remains to Be
Done

Although Congress and PBGC have taken significant and positive steps
to strengthen the agency over the past 3 years, concerns persist related
to the multiemployer program and challenges related to PBGC’s overall
funding structure and governance. While changes were made with
passage of MPRA, PBGC officials believe there is a 50 percent chance
that the multiemployer program will be insolvent by the year 2025, and
after that, the risk of insolvency rises rapidly—reaching 90 percent by
2032. Further, the premium structure for PBGC’s single-employer
program continues to result in rates that do not align with the risk the
agency insures against and the effectiveness of PBGC’s board remains
hampered by its size and composition.
Moreover, PBGC continues to face the ongoing threat of losses from the
termination of underfunded plans, while grappling with a steady decline in
the defined benefit pension system. With each passing year, fewer
employers are sponsoring defined benefit plans and the sources of funds
to finance future claims are becoming increasingly inadequate. Absent
additional steps to improve PBGC’s finances, the long-term financial
stability of the agency remain uncertain and the retirement benefits of
millions of American workers and retirees could be at risk of dramatic
reductions.

----

Congressional Actions
Needed

To improve the long-term financial stability of both PBGC’s insurance
programs, Congress should consider:
• authorizing a redesign of PBGC’s single employer program premium
structure to better align rates with sponsor risk;
• adopting additional changes to PBGC’s governance structure—in
particular, expanding the composition of its board of directors;
What Remains to Be
Done
Congressional Actions
Needed
Pension Benefit Guaranty Corporation
Insurance Programs
Page 616 GAO-17-317 High-Risk Series
• strengthening funding requirements for plan sponsors as appropriate
given national economic conditions;
• working with PBGC to develop a strategy for funding PBGC claims
over the long term, as the defined benefit pension system continues to
decline; and
• enacting additional structural reforms to reinforce and stabilize the
multiemployer system that balance the needs and potential sacrifices
of contributing employers, participants and the federal government.

-----
Benefits Achieved by
Implementing Our
Recommendations

[Table 8]

Multiemployer Pension Reform. We identified specific policy options
to help multiemployer plans and the PBGC insurance program avoid
insolvency, including recommending that Congress consider
comprehensive reforms to stabilize the system. Congress enacted the
Multiemployer Pension Reform Act, which included several options we
identified.
• Interagency Sharing of Multiemployer Plan Information. To
improve the quality of information and oversight of these plans, we
recommended that the Employee Benefits Security Administration
(EBSA) in the Department of Labor, the Internal Revenue Service
(IRS) in the Department of the Treasury, and the Pension Benefit
Guaranty Corporation (PBGC) revise existing interagency memoranda
of understanding to address, among other things, the agencies’
process for sharing information they collect on multiemployer plans on
an ongoing basis. In response to this recommendation, PBGC took
numerous steps in the last 2 fiscal years to share multiemployer plan
information with IRS and EBSA, including providing lists of (1) the
universe of multiemployer plans, and terminated, insolvent, or
terminated and insolvent multiemployer plans; (2) plans filing critical
and endangered status notices; and (3) plans that failed to provide
annual funding notices.
• Proactive Monitoring of Multiemployer Plans. To implement better
and more effective oversight practices, we recommended that PBGC
develop a more proactive approach to monitoring multiemployer
plans, such as assigning case managers to work with the plans that
pose the greatest risk to the agency and providing non-financial
assistance to troubled plans on an ongoing basis before the plans
became insolvent. PBGC has taken numerous actions since 2011 to
implement better and more effective oversight practices including: (1)
re-assigning four attorneys to work primarily on multiemployer plan
matters; (2) awarding an audit services contract to allow PBGC staff
time to develop nonfinancial assistance to plans; (3) initiating
proactive efforts to identify plans that would benefit from PBGC
technical assistance and informal guidance; (4) contacting troubled
multiemployer plans to obtain data on the plan’s financial situation and
to create avenues to improve plan health and the financial assistance
process; and (5) authorizing five additional positions to administer and
oversee financial assistance extended to troubled multiemployer
plans.
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