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  #311  
Old 05-18-2017, 11:38 PM
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http://www.pionline.com/article/2017...t-cut-proposal

Quote:
Treasury denies Automotive Industries Pension Plan’s benefit cut proposal

Automotive Industries Pension Plan, Alameda, Calif., was denied permission to cut benefits for participants, including retirees, as part of a proposed rescue plan submitted to the Treasury Department.

The Multiemployer Pension Reform Act of 2014 allows benefit reductions, called suspensions, if they are likely to keep a pension fund solvent. The application to reduce benefits, submitted Sept. 27, projected a 50.3% chance of solvency with the cuts.

In a letter Tuesday to the pension fund announcing the denial, Treasury benefits tax counsel Robert Neis said officials there “concluded that several of the key actuarial assumptions used for the cash flow projections in the application are not reasonable,” specifically the mortality rate assumption, the assumed rate that married participants will elect a joint and survivor benefit, and assumptions of when terminated vested participants would begin receiving benefits.

Mr. Neis also wrote that “a number of other actuarial assumptions and methods” raised concerns, but were not the reason for the denial. “Treasury remains willing to discuss these issues with (the plan) further,” he said.

Pension fund assets as of Jan. 1 were $1.19 billion and liabilities were $1.96 billion, for a funded status of 60.7%. The proposed benefit reductions would have started July 1, 2017.

The fund is projected to be insolvent by 2030 without the suspensions. Over the past 10 years, the number of active participants has declined and there are now 5.5 non-active participants for each active participant, according to the application. Under a rehabilitation plan in place since 2009, trustees have made the maximum benefit reductions allowed by law before 2014, including removal of all early retirement subsidies, joint and survivor subsidies, disability pensions and other options.

Of the 17 MPRA applications submitted to the Treasury Department, five have been denied and six are still in review, which includes some initial applications that were withdrawn and resubmitted.

Only one application, by the $91.9 million Iron Workers Local 17 Pension Fund, Cleveland, has been approved. It was approved Dec. 16, and called for reducing benefits “indefinitely.”

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  #312  
Old 05-20-2017, 09:54 PM
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https://www.ai-cio.com/news/gap-rich...-plans-widens/

Quote:
Gap Between Rich, Poor Multiemployer Plans Widens

The rich are getting richer, and the poor and getting poorer among multiemployer pension plans, according to a new report from consulting and actuarial firm Milliman, Inc.

The report, which analyzed the funded status of all multiemployer pension plans, found that, the aggregate funded percentage of critical plans at the end of 2016 was less than 60%, while the funded percentage of noncritical plans was nearly 85%.

“The substantially lower asset base of critical plans (in relation to their liabilities) requires much stronger asset returns for these plans to see improvement in their funded percentages,” said the report. “That fact, coupled with severe negative cash flow positions, has proven too difficult for critical plans to realize significant recovery in their funded percentages from their low points after the 2008 crash.”

Milliman found that multiemployer pension plans with severe funding deficiencies only spend $0.38 of each contribution dollar on new benefit accruals, while $0.50 of every dollar goes to pay down funding shortfalls. However, plans that are healthier spend $0.56 per contribution dollar on benefit accruals, and $0.32 on funding shortfalls. The remaining $0.12 in both scenarios is spent on expenses.

“The gap continues to widen between critical and non-critical plans,” says Kevin Campe, consulting actuary and co-author of the 2017 Multiemployer Pension Funding Study. “While the funding percentage of healthier plans has increased slightly, critical plans have seen no appreciable increase. Persistent strong returns would be needed to see any appreciable improvement in funded status.”

The report also said that plans facing more severe funding challenges are not able to provide as large of a benefit accrual as they once did. In addition, these plans may be contributing much higher amounts than they previously have.

“The multiemployer pension plan universe continues to face significant pressure, with many of the most troubled plans on track to rely on assistance from the PBGC [Pension Benefit Guaranty Corporation], which is currently facing its own dire financial issues,” said the report. “Healthier plans face the risk of increased PBGC premiums, and trustees for these plans need to be vigilant in monitoring financial trends and risk exposure.”

Underfunded plans are currently struggling to pay down shortfalls, said the report, and the shortfalls likely will grow. This means the plans will need unrealistic investment returns, or have a combination of higher contributions and/or lower benefits just to be able to maintain the current levels of funding.

“Healthier plans are improving their funded status as long as asset returns meet or exceed expectations,” said the report. “However, critical plans show declines if expectations are met. For critical plans to see noticeable improvement in their funded status, even more excess returns would be needed.”

The report suggested that plan trustees may want to explore potential plan design changes, such as variable annuity plans, which could mitigate the negative impact of future market volatility.

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  #313  
Old 05-22-2017, 10:34 PM
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MINEWORKERS

http://www.wvalways.com/story/354771...ed-in-congress

Quote:
New Coal Miner Pension Bill Introduced in Congress

As they keep moving the coal in West Virginia, efforts are underway in Washington, DC to save the pensions of tens of thousands of retired miners and their spouses. Last month in a separate bill, Congress preserved the miner's health care benefits, now pensions are the goal.

"It has funding concerns. We have a little bit of time, but we don't need to waste any time. We need to get on this so we're going to be fighting for a permanent solution for the pension aspect, just as we did for the health care aspect," said Rep. Evan Jenkins, (R) West Virginia.

But there are critics in Congress who say this sets a bad precedent; that Congress will have to bail out other industries that get in trouble, too. But coal industry leaders say this was a special deal, made for the miners help way back during World War II.
.....

Over 100,000 retired miners could be affected.

The House Coal Miners Pension bill is similar to one already introduced in the U.S. Senate, but it could take months before we see any action on this legislation.


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  #314  
Old 05-22-2017, 10:46 PM
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https://www.ai-cio.com/news/legislat...benefits-cuts/

Quote:
Legislators Introduce Bill to Block Pension Benefits Cuts

Sen. Bernie Sanders (I-Vt.) and Rep. Marcy Kaptur (D-Ohio) have introduced legislation that would repeal the provision in the Multiemployer Pension Reform Act of 2014 that allows for plan administrators to enact benefits reductions.

“When a promise is made to the working people of this country with respect to their pensions and retiree health benefits, that promise cannot be broken,” Sanders said. “If Congress could bail out Wall Street and foreign banks throughout the world, we certainly can protect the pension benefits of American workers.”

The Multiemployer Pension Reform Act of 2014 included provisions that allow for significant benefits reductions to financially troubled multi-employer pensions, if approved by the Department of Treasury. Prior to this, it was illegal for an employer to make any cuts in the pension benefits its retirees earned.

The bill calls for the Employee Retirement Income Security Act of 1974 and the Internal Revenue Code of 1986 to be applied “as if such section and amendments had never been enacted.”

The proposed legislation, known as The Keep Our Pension Promises Act, would not only eliminate this option, it would also establish a legacy fund within the Pension Benefit Guaranty Corporation (PBGC) to ensure that multi-employer pension plans can continue to provide pension benefits. The legislation would be funded from the closing of two tax loopholes that the bill sponsors say “allow the wealthiest Americans to avoid paying their fair share of taxes.”

Although only one pension plan has so far been granted approval by the Treasury Department to enact benefits reductions, there are currently six pension plans whose applications are still pending.

The Keep Our Pension Promises Act key proposals include:

Restoring anti-cutbacks rules so that retirees in financially troubled multi-employer pension plans will not see their earned pension benefits reduced.
Giving participating employers relief from having to shoulder the full financial burden and risk of underfunded participants whose former employers went bankrupt, or pulled out of the plan without paying what they owed.
Providing additional funding to help protect retirees and the PBGC by closing tax loopholes used by the very wealthy to accumulate expensive artwork and hundreds of millions of dollars in tax-advantaged savings.
Creating a legacy fund within the PBGC to help ensure that participants in financially troubled plans will continue to receive benefits.
Ensuring pension obligations are prioritized during bankruptcies.

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  #315  
Old 05-23-2017, 02:31 PM
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NEW YORK STATE TEAMSTERS

https://burypensions.wordpress.com/2...msters-refile/

Quote:
Breaking News: NYS Teamsters Refile
Posted May 23, 2017 by burypensions in Multiemployer Pensions. Leave a Comment
On August 30, 2016 trustees of the New York State Teamsters Conference Pension and Retirement Fund out of Syracuse, NY became the ninth multiemployer (union) plan to file for benefit cuts under MPRA in an attempt to avoid insolvency. On April 5, 2017 they withdrew that application but, according to a story in the Albany Times Union, were planning to refile. On May 16, 2017 they did just that.

....
The link to the revised application does not work yet (they have 30 days to put it up) but supposedly the benefit reductions will not be as large. However, this does not mean that the plan will be solvent permanently but rather, according to an a chart in Exhibit 8 of the first filing, until all the politicians and regulators currently involved in this charade are safely retired with their own pensions:
....
From their latest 5500 form here is the plan’s relevant data:
Plan Name: New York State Teamsters Conference Pension & Retirement Fund
EIN/PN: 16-6063585/074
Total participants @ 12/31/15: 34,270 including:
Retirees: 15,936
Separated but entitled to benefits: 6,758
Still working: 11,576
Asset Value (Market) @ 1/1/15: 1,561,393,592
Value of liabilities using RPA rate (3.51%) @ 1/1/15: $5,853,996,515 including:
Retirees: $3,667,708,376
Separated but entitled to benefits: $569,054,431
Still working: $1,617,233,708
Funded ratio: 26.67%
Unfunded Liabilities as of 1/1/15: $4,292,602,923
Asset Value (Market) as of 12/31/15: $1,381,300,242
Contributions: $118,647,969
Payouts: $280,144,632
Expenses: $19,055,508
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  #316  
Old 05-24-2017, 06:07 PM
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Quote:
Originally Posted by campbell View Post
resubmission docs available here:
https://www.treasury.gov/services/Pa...-Resubmit.aspx
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  #317  
Old 05-26-2017, 02:52 PM
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NEW YORK STATE TEAMSTERS

on the resubmission

https://www.ai-cio.com/news/ny-teams...benefits-cuts/

Quote:
NY Teamsters Pension Fund Reapplies for Benefits Cuts

The New York State Teamsters Conference Pension & Retirement Fund has resubmitted its application to Treasury Department to enact benefits reductions under the Multiemployer Pension Reform Act (MPRA).

The fund said that since it withdrew its original application in early April, it held several meetings and calls with the Treasury Department seeking guidance for its application revision. It said that one of the most significant issues identified by the Treasury Department with the fund’s original application concerned its conservative investment return assumption.

....
The proposed benefit reduction in the resubmitted application is 29% for non-active participants, and 18% for active participants. In its original application, the fund had proposed a 20% reduction in monthly benefits for all active participants, and a 31% reduction in monthly benefits for all retirees, beneficiaries, terminated vested participants, and all other non-active participants.

.....
The original application assumed an investment return of 6.75% for the first 10 years, and 7.5% for the years after that. The new application was filed with a weighted average investment return calculated per year as follows:

Year Return

2017 7.37%

2018 7.34%

2019 7.28%

2020 7.21%

2021 7.14%

2022 7.06%

2023 6.97%

2024 6.90%

2025 6.85%

2026 6.82%

The long-term rates for years 2027 through 2049 range from a high of 7.77% to a low of 7.66%.

According to MPRA mandates, there must be two classes that are fully protected from the proposed suspensions: those over the age of 80 as of Oct. 31, 2017, and

those who retired under a disability pension from the fund. It also mandates that partial age protection is provided for those between the age of 75 and 79 as of Oct. 31, 2017, and no participant can have benefits reduced below 110% of the amount that the Pension Benefit Guaranty Corporation (PBGC) would guarantee if the fund were to become insolvent.

http://buffalonews.com/2017/05/25/re...-smaller-cuts/

Quote:
Revised Teamsters pension proposal calls for slightly smaller cuts

Proposed pension benefits cuts for some active and retired Teamsters, including about 5,200 in Western New York, are back on the table.

The New York State Teamsters Conference Pension and Retirement Fund, which has about 34,000 participants statewide, submitted a revised plan to the U.S. Department of Treasury for permission to implement the cuts. The reductions could take effect Oct. 1.

....
The proposed cuts are slightly lower because of the fund's investment earnings since the last application was submitted, according to a website for the fund.

Participants 80 or older would see no benefits reduction, and those ages 75 to 79 would have their benefits cut by lesser amounts, depending on their age. Participants receiving a disability benefit from the fund also would not see a reduction.

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  #318  
Old 06-13-2017, 04:33 PM
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http://www.necanet.org/news/news-rel...-pension-plans

Quote:
News Release Archive
TAKE ACTION: TELL CONGRESS TO AUTHORIZE COMPOSITE PLANS FOR MULTIEMPLOYER PENSION PLANS
Jun 09, 2017
The nation's multiemployer defined benefit pension plans have provided a secure retirement to America's working families for generations.

The NECA-supported Multiemployer Pension Reform Act of 2014 (MPRA) included several major reforms and brought about a joint effort between management and labor. Unfortunately, the law did not include the important recommendation of creating "composite" benefit plans which are a hybrid between a defined contribution and a defined benefit plan. Allowing plans to transition to composite plan designs is necessary to provide a retirement security benefit for the electrical construction industry's workers and the fiscal viability of employers that contribute to NECA multiemployer pension plans.

Tell your Member of Congress and Senators you support allowing the option of Composite Plans today!
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  #319  
Old 06-17-2017, 03:01 PM
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http://blog.timesunion.com/capitol/a...-on-wednesday/

Quote:
Treasury officials to answer Teamster pension questions on Wednesday

The Upstate Teamsters, which like some other multi-employer unions, is facing long term questions about the ability to finance their pensions. As a result they are seeking permission from the federal Treasury Department to hold a vote on possible cuts of up to 29 percent, which they say are needed to stay solvent in future years.

As the Treasury Department is considering the request, members of the union, which includes retired UPS and other truck drivers, will be able to ask questions of the federal officials this week at a pair of Town Hall meetings on Wednesday and Thursday.

The first stop is at the University at Albany on Wednesday.

https://www.scribd.com/document/3511...ice#from_embed

Quote:
Treasury Department Town Hall Meetings
The New York State Teamsters Conference Pension and Retirement Fund has been notified that the Treasury Department will hold
two town hall meetings about the Fund’s pending MPRA application.
These meetings have been scheduled, organized and will be conducted by Treasury Department officials. The Trustees, the Fund and the Fund staff have no role in these meeting. The two meetings are an opportunity for participants to provide comments and feedback directly to Treasury Department officials.
ALBANY, NY- June 14
th
Time:
1:30 pm- 3:30 pm
Location:
University at Albany, State University of New York 1400 Washington Avenue, Albany NY 12222
Room:
Performing Arts Center- 126 Main Theatre

Parking:
Attendees can self-park in the State Lot See attached campus map

BUFFALO, NY- June 15
th

Time:
2:00

pm -4:00 pm
Location:
Buffalo State University, The State University of New York 1300 Elmwood Avenue, Buffalo NY 14222

Room:
Bulger Communication Center North

Parking:
Parking is free, the closest lots are I-34, I-35 and if they are full, then R-13 See attached campus map.
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  #320  
Old 07-06-2017, 06:47 PM
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http://www.actuary.org/files/publica...ne_27_2017.pdf

Quote:
Multiemployer Pension Plans:
Potential Paths Forward
Capitol Hill Briefing
June 27, 2017
http://www.actuary.org/content/overv...-system-issues

Quote:
While different circumstances apply to each plan, many plans in critical and declining status share several attributes:

Pension assets are invested in diversified portfolios. Plans have invested in diversified portfolios to try to achieve investment returns that can support higher benefit levels and lower contribution requirements than would be possible if the assets earned risk-free rates of return. These investment strategies, however, are not guaranteed, and plans need additional contributions or reduced benefits if the anticipated investment returns are not achieved.

Past surpluses led to benefit increases that were not sustainable. Funding pension plans using diversified portfolios will strengthen a plan’s funding status when investment returns are robust. These investment gains may be needed to offset losses when returns are weak. However, following the large asset gains in the late 1990s, many plans became significantly overfunded, and responded by increasing benefit levels or taking contribution holidays. Both the dynamics of the collective bargaining process and regulatory policies that were not conducive to maintaining overfunded plans contributed to this trend. These benefit increases ultimately became unaffordable for many plans when their assets declined dramatically in the subsequent decade.

Mature plans have fewer resources to recover from investment losses as the assets grow relative to the contribution base supporting the plan. In young plans, contributions are the primary source of asset growth and investment returns are comparatively small, while the opposite is true in mature plans. As the plan relies more heavily on investment returns, it becomes more difficult to make up for investment losses through additional contributions.

Fewer workers are employed in the industries sponsoring multiemployer plans. Some unionized industries have seen significant transformations over time. In some industries the workforce has shifted to more non-union employees as a result of restructurings or regulatory changes, while others have seen declines in the number of employees needed due to global competition, automation, or broad declines in the industry. A decline in the active workforce results in a diminished economic base for collectively bargained employer contributions.

Employers have exited multiemployer pension plans, either through bankruptcy or withdrawal, leaving unfunded obligations for the remaining employers in the plans. These obligations, often referred to as “orphan liabilities,” add to the maturity of the plan and subject the remaining employers to additional risks related to the funding of the orphan liabilities.


.....
Addressing Legacy Pensions
If the accrual of future benefits in these critical and declining plans ceased today, the pension benefits attributable to past service would still present an enormous problem. This legacy problem has an impact on existing and future retirees, as well as the PBGC.

The PBGC Guarantee

Plans eligible for PBGC financial support are subject to the PBGC guaranteed benefit levels, which are generally relatively low (e.g., maximum payout for a full-career participant is approximately $13,000 per year) and are often much lower than the underlying obligation payable from a troubled multiemployer plan. Many participants will experience a significant benefit reduction even if PBGC is fully able to provide the guaranteed benefits, but the PBGC multiemployer insurance program is itself in dire financial condition, and is likely to exhaust its asset reserves in approximately eight years. To deliver the existing PBGC guarantees, it will take some combination of additional revenue or reduced claims from insolvent plans. Some of the measures discussed to improve PBGC finances—all of which would require enabling legislation—are summarized below.

Increase PBGC premiums. Premiums have already increased significantly and are scheduled to continue to increase. A potential concern with this approach is that insurance premiums are generally intended to pay for ongoing risks and not past losses. To the extent that higher premiums are viewed as paying for legacy liabilities and not future risks, they may drive healthy employers and employee organizations out of the system, making the increase self-defeating. Higher multiemployer plan premiums represent higher plan expenses, which would adversely impact the funded status of plans over time. While there is concern about any increase in premiums, the current and historical amounts may be perceived as relatively low.3 The multiemployer premium for 2017 is $28 per participant, which represents an average of approximately $0.05 per hour out of employees’ wage packages.4

Charge the specific industry. In some industries where restructuring has resulted in a considerable number bankruptcies among employers supporting the pension plan while new employers in the industry did not join the plan, it may be advisable to construct a specific industry tax or premium. This additional charge could be earmarked to pay for the orphaned liabilities left by the bankrupt employers. Another area of potential focus for a targeted charge is on industries for which the claims on the PBGC insurance fund are disproportionately large. However, in both cases, there may not be enough employers remaining in the industry, or the industry may not be healthy enough, to pay the amount needed. Charging the entire industry also means that employers that never participated in the plan would be paying a portion of the liability for the bankrupt employers that did participate in the plan.

Charge existing retirees. A modest payment collected from all existing retirees receiving multiemployer plan pensions could generate a significant amount of premium revenue, because the multiemployer system has matured and now has more retired participants than active participants. This premium, however, could face significant opposition, as retirees have never been directly charged for insurance on their pensions before, and many retirees live on fixed incomes with limited options to deal with unexpected reductions to their benefits.

Reduce the guarantee. Congress could reduce the guaranteed benefit level to align with the amount of premium resources available. But because the guarantee is already low, the resulting pension payouts may do little to help pensioners achieve financial security. Unlike reducing guarantee amounts for savings deposit insurance, where account holders could shift their assets, multiemployer pension plan participants could not take actions to secure their benefits if the pension insurance limit is reduced.

Provide financial support backed by the government. A financial commitment could be made from the general revenues of the federal government, a specific tax, or other taxpayer-supported funding sources. Under this approach, the solution is spread across a broader tax base, involving many taxpayers with little or no direct relationship with the struggling pension plans.

Combine PBGC’s multiemployer program with the single-employer program. The single-employer program is currently in a stronger financial position than the multiemployer program. However, this approach would generate potential inequities, as it adds new risks to single-employer plan sponsors and participants. In addition, there are fundamental differences in how the single and multiemployer programs operate, and combining funding could put stress on the single-employer system and further erode support for defined benefit plans.

Allow the PBGC to intervene early in troubled multiemployer plans. Under current law, PBGC does not generally provide any financial assistance, or reduce benefits to guaranteed levels, until a multiemployer plan is unable to pay full benefits. The PBGC multiemployer plan program could be aligned with the single-employer program, where PBGC has the authority to intervene long before plans actually fail. By identifying these plans before complete insolvency and reducing benefits to guaranteed levels sooner, PBGC’s limited resources could be conserved. The cost would be that participants in troubled multiemployer plans would experience benefit reductions earlier than occurs under the current multiemployer insurance program.

Other creative ideas may be developed to improve PBGC revenues, but the other potentially powerful approach to preserving PBGC guaranteed benefits is to improve the health of the plans so they don’t have to rely on the PBGC for assistance. So doing would require some combination of additional contributions to the plans, additional investment earnings, or reductions in benefits.


.....
New potential solutions are clearly needed. What follows are some general approaches for discussion:

Separate the legacy commitments for the “orphan liabilities” relating to bankrupt and withdrawn employers from current employers that may now be shouldering the obligation these employers left in the plan. Segregating these obligations and finding a dedicated funding source helps compartmentalize the solutions to the legacy plan shortfall. There is also an inherent sense of fairness with this approach, and funding could come from a combination of the alternatives identified above for additional PBGC revenue.

Provide low-interest loans to troubled plans or employers. This approach borrows money at a low interest rate and invests the proceeds in plan assets. Loans could be made available either directly from the government or from financial institutions. If from a financial institution, the loan would likely require government support to encourage the private institution to offer the loan. These loans would provide a longer timeframe over which employers could spread the cost of funding the liabilities. Additionally, if actual investment returns exceed the borrowing rate, this approach could create the income needed to pay some or all of the promised benefits. However, if actual investment returns do not exceed the borrowing rate, the existing risks to employers, participants, and the PBGC may remain in force. In addition, the plan may be unable to repay the loan, creating a default risk to the provider or guarantor of the loans. The loans could be guaranteed by a governmental agency (e.g., Treasury or PBGC) that currently holds a portion of the risk. Alternatively, participants could absorb part or all of the risk by transforming their fixed monthly benefits to monthly benefits that vary based on actual investment returns. This strategy of converting to variable legacy benefits could also be deployed with many of the other solutions under consideration.

Increase minimum funding requirements for legacy obligations. Employers participating in poorly funded plans could be required to significantly accelerate the funding of these commitments. Employers, however, entered into collective bargaining agreements that call for specific contributions to these plans with an understanding of the existing specific limits and exposures. Charging them significantly higher costs for past benefits could cause some employers and covered employee groups to exit plans or push more employers into bankruptcy.

Strengthen rules to protect legacy liabilities with respect to withdrawal liability payments and bankruptcy laws. If employers can continue to withdraw and shift liability to the remaining employers, or become bankrupt and escape any withdrawal liability payments, troubled plans—as well as some plans that don’t appear to be troubled—could become even worse. However, giving plans a stronger claim on company assets would mean that other creditors have reduced claims, which could place further stress on the companies that contribute to the plans.

Take actions to promote the health of the general economy and, in particular, the affected industries. Economic growth in the industries that sponsor multiemployer plans could facilitate the funding of pension plans. A strong market could increase investment returns on pension assets.
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