{ "id": "R43305", "type": "CRS Report", "typeId": "REPORTS", "number": "R43305", "active": true, "source": "EveryCRSReport.com, University of North Texas Libraries Government Documents Department", "versions": [ { "source": "EveryCRSReport.com", "id": 621858, "date": "2020-04-03", "retrieved": "2020-04-03T22:17:23.780475", "title": "Multiemployer Defined Benefit (DB) Pension Plans: A Primer", "summary": "Multiemployer defined benefit (DB) pension plans are private-sector pensions sponsored by more than one employer and maintained as part of a collective bargaining agreement. In 2017, about 3% of all DB pension plans, covering 29% of all DB pension plan participants, were multiemployer plans. Nearly all of the remaining DB pension plans were maintained by a single employer. A few DB pension plans were maintained by more than one employer but were not maintained under a collective bargaining agreement. In DB pension plans, participants receive a monthly benefit in retirement that is based on a formula. In multiemployer DB pensions, the formula typically multiplies a dollar amount by the number of years of service the employee has worked for any of the employers that participate in the DB plan.\nDB pension plans are subject to funding rules in the Internal Revenue Code (26 U.S.C. \u00a7431) designed to ensure they have sufficient resources from which to pay promised benefits. Because single-employer and multiemployer DB pension plans have different structures, Congress has established separate funding rules for these plans.\nAlthough many multiemployer DB pension plans have sufficient resources from which to pay their promised benefits, 10% to 15% of participants are in plans that are projected to become insolvent in the next 20 years. When a multiemployer DB pension plan becomes insolvent (i.e., unable to pay participants the entirety of their promised benefits in a given year), the Pension Benefit Guaranty Corporation (PBGC)\u2014a federally chartered corporation\u2014is to insure the benefits of participants up to a statutory maximum. PBGC operates two separate insurance programs: one for single employer plans and one for multiemployer plans. PBGC does not become the trustee of insolvent multiemployer DB pension plans; rather, it makes loans to them so that the plans may continue to pay participants\u2019 guaranteed benefits.\nThe projected insolvencies of some multiemployer plans will likely result in the insolvency of PBGC\u2019s multiemployer plan insurance program. In the absence of increased financial resources for PBGC, participants in insolvent multiemployer DB pension plans might not receive all of the benefits guaranteed by PBGC. In its FY2018 Projections Report, PBGC indicated that the multiemployer insurance program is highly likely to become insolvent by 2025 and will be unable to pay 100% of participants\u2019 benefits at the guaranteed level.\nThe Multiemployer Pension Reform Act of 2014, enacted as Division O in the Consolidated and Further Continuing Appropriations Act, 2015 (MPRA; P.L. 113-235), made changes to some of the funding rules for multiemployer DB pensions and allowed plans that are expected to become insolvent to cut benefits to plan participants or to apply for a partition of the plan. As of April 1, 2020, the U.S. Treasury has received 41 applications to reduce benefits under MPRA. Five applications, including the application by the Central States, Southeast and Southwest Areas Pension Plan (a very large plan with 400,000 participants), have been denied. Fifteen applications have been withdrawn, and 17 applications have been approved. Decisions are still pending for the remaining four applications.\nThe Bipartisan Budget Act of 2018 (P.L. 115-123), enacted February 9, 2018, created the Joint Select Committee on Solvency of Multiemployer Pension Plans to address the impending insolvencies of several large multiemployer DB pension plans and PBGC. The committee did not produce a report or legislative proposals to improve the solvency of multiemployer DB plans and the PBGC by its November 30, 2018, deadline.", "type": "CRS Report", "typeId": "REPORTS", "active": true, "formats": [ { "format": "HTML", "encoding": "utf-8", "url": "https://www.crs.gov/Reports/R43305", "sha1": "4f0d2d023fab6e093483709f7296c43b127bcd14", "filename": "files/20200403_R43305_4f0d2d023fab6e093483709f7296c43b127bcd14.html", "images": { "/products/Getimages/?directory=R/html/R43305_files&id=/1.png": "files/20200403_R43305_images_ed79c411a30497c7f4ddaeb4ae6394619a265e4c.png", "/products/Getimages/?directory=R/html/R43305_files&id=/3.png": "files/20200403_R43305_images_33380d74abfae9959533b24a1de1bb776be50c87.png", "/products/Getimages/?directory=R/html/R43305_files&id=/2.png": "files/20200403_R43305_images_ab07da4cfe107c4ddaf83b0fd6ec2d55a55c513d.png", "/products/Getimages/?directory=R/html/R43305_files&id=/0.png": "files/20200403_R43305_images_8f02185c401538bbf2989ab48679416258844df7.png" } }, { "format": "PDF", "encoding": null, "url": "https://www.crs.gov/Reports/pdf/R43305", "sha1": "c9f654a34f37c0904b3594742333a54b9eea40e2", "filename": "files/20200403_R43305_c9f654a34f37c0904b3594742333a54b9eea40e2.pdf", "images": {} } ], "topics": [ { "source": "IBCList", "id": 4869, "name": "Pensions & IRAs" } ] }, { "source": "EveryCRSReport.com", "id": 585577, "date": "2018-09-24", "retrieved": "2018-09-25T13:06:36.195235", "title": "Multiemployer Defined Benefit (DB) Pension Plans: A Primer", "summary": "Multiemployer defined benefit (DB) pension plans are pensions sponsored by more than one employer and maintained as part of a collective bargaining agreement. About 3.1% of all DB pension plans, covering 28% of all DB pension plan participants, are multiemployer plans. Nearly all of the remaining DB pension plans are maintained by a single employer. A few DB pension plans are maintained by more than one employer but are not maintained under a collective bargaining agreement. In DB pension plans, participants receive a monthly benefit in retirement that is based on a formula. In multiemployer DB pensions, the formula typically multiplies a dollar amount by the number of years of service the employee has worked for employers that participate in the DB plan.\nDB pension plans are subject to funding rules in the Internal Revenue Code (26 U.S.C. \u00a7431) to ensure they have sufficient resources from which to pay promised benefits. Because single employer and multiemployer DB pension plans have different structures, Congress has established separate funding rules for these plans.\nAlthough many multiemployer DB pension plans have sufficient resources from which to pay their promised benefits, 10% to 15% of participants are in plans that are projected to become insolvent in the next 20 years. The Pension Benefit Guaranty Corporation (PBGC) is a federally chartered corporation that insures the benefits of participants in private-sector DB pension plans. As with the funding rules, Congress established separate PBGC programs to insure single and multiemployer DB pensions. For example, when underfunded single-employer DB plans terminate, PBGC becomes the trustee of the plan. PBGC does not become the trustee of multiemployer DB pension plans; rather, it makes loans to insolvent multiemployer DB plans so the plans may continue to pay participants\u2019 guaranteed benefits.\nThe projected insolvencies of multiemployer plans would likely result in a substantial strain on PBGC\u2019s multiemployer insurance program. In the absence of increased financial resources for PBGC, participants in insolvent multiemployer DB pension plans might not receive all of the benefits guaranteed by PBGC. In a report released in June 2017, PBGC indicated that the multiemployer insurance program is highly likely to become insolvent by 2025 and will be unable to pay 100% of participants\u2019 benefits at the guaranteed level.\nThe Multiemployer Pension Reform Act of 2014, enacted as Division O in the Consolidated and Further Continuing Appropriations Act, 2015 (MPRA; P.L. 113-235) made changes to some of the funding rules for multiemployer DB pensions and allowed plans that are expected to become insolvent to cut benefits to plan participants or to apply for a partition of the plan. As of September 21, 2018, the U.S. Treasury has received 32 applications to reduce benefits under MPRA. Five applications, including the application by the Central States, Southeast & Southwest Areas Pension Plan (a very large plan with 400,000 participants), have been denied. Ten applications have been withdrawn, and seven applications have been approved. Decisions are still pending on the remaining 10 applications.\nThe Bipartisan Budget Act of 2018 (P.L. 115-123), enacted February 9, 2018, created the Joint Select Committee on Solvency of Multiemployer Pension Plans to address the impending insolvencies of several large multiemployer DB pension plans and PBGC. The committee must provide to Congress no later than November 30, 2018, a report and proposed legislative language to improve the solvency of multiemployer DB plans and the PBGC. The report and proposed legislative language must be approved by (1) a majority of committee members appointed by the Speaker of the House and Majority Leader of the Senate and (2) a majority of committee members appointed by the Minority Leader of the House and Minority Leader of the Senate. P.L. 115-123 provides for expedited procedures in the Senate if the committee approves of the proposed legislative language. There are no provisions that provide any special procedures governing House consideration of such legislation.", "type": "CRS Report", "typeId": "REPORTS", "active": true, "formats": [ { "format": "HTML", "encoding": "utf-8", "url": "http://www.crs.gov/Reports/R43305", "sha1": "378dcdd647d18cc29c3609a661ee4e206e4ecd0e", "filename": "files/20180924_R43305_378dcdd647d18cc29c3609a661ee4e206e4ecd0e.html", "images": { "/products/Getimages/?directory=R/html/R43305_files&id=/1.png": "files/20180924_R43305_images_ed79c411a30497c7f4ddaeb4ae6394619a265e4c.png", "/products/Getimages/?directory=R/html/R43305_files&id=/3.png": "files/20180924_R43305_images_33380d74abfae9959533b24a1de1bb776be50c87.png", "/products/Getimages/?directory=R/html/R43305_files&id=/2.png": "files/20180924_R43305_images_ab07da4cfe107c4ddaf83b0fd6ec2d55a55c513d.png", "/products/Getimages/?directory=R/html/R43305_files&id=/0.png": "files/20180924_R43305_images_8f02185c401538bbf2989ab48679416258844df7.png" } }, { "format": "PDF", "encoding": null, "url": "http://www.crs.gov/Reports/pdf/R43305", "sha1": "4b418404c35f779ba736e04e6d3ee61beff75b93", "filename": "files/20180924_R43305_4b418404c35f779ba736e04e6d3ee61beff75b93.pdf", "images": {} } ], "topics": [] }, { "source": "EveryCRSReport.com", "id": 584349, "date": "2018-03-29", "retrieved": "2018-08-29T15:39:28.882519", "title": "Multiemployer Defined Benefit (DB) Pension Plans: A Primer and Analysis of Policy Options", "summary": "Multiemployer defined benefit (DB) pension plans are pensions sponsored by more than one employer and maintained as part of a collective bargaining agreement. About 3.2% of all DB pension plans, covering 25% of all DB pension plan participants, are multiemployer plans. Nearly all of the remaining DB pension plans are maintained by a single employer. A few DB pension plans are maintained by more than one employer but are not maintained under a collective bargaining agreement. In DB pension plans, participants receive a monthly benefit in retirement that is based on a formula. In multiemployer DB pensions, the formula typically multiplies a dollar amount by the number of years of service the employee has worked for employers that participate in the DB plan.\nDB pension plans are subject to funding rules in the Internal Revenue Code (26 U.S.C. \u00a7431) to ensure they have sufficient resources from which to pay promised benefits. Because single employer and multiemployer DB pension plans have different structures, Congress has established separate funding rules for these plans.\nAlthough most multiemployer DB pension plans have sufficient resources from which to pay their promised benefits, a few large plans are expected to become insolvent in the next 20 years. The Pension Benefit Guaranty Corporation (PBGC) is a U.S. government agency that insures the benefits of participants in private-sector DB pension plans. As with the funding rules, Congress established separate PBGC programs to insure single and multiemployer DB pensions. For example, PBGC becomes the trustee of terminated single employer DB pension plans. PBGC does not become the trustee of multiemployer DB pension plans; rather, it makes loans to insolvent multiemployer DB plans so the plans may continue to pay participants\u2019 guaranteed benefits.\nAlthough PBGC has sufficient resources to make loans to smaller multiemployer DB plans, the insolvency of a large multiemployer DB pension plan would likely result in a substantial strain on PBGC\u2019s multiemployer insurance program. In the absence of increased financial resources for PBGC, participants in insolvent multiemployer DB pension plans might not receive all of the benefits guaranteed by PBGC. In a report released in June 2017, PBGC indicated that the multiemployer insurance program is highly likely to become insolvent by 2025.\nThe Multiemployer Pension Reform Act of 2014, enacted as Division O in the Consolidated and Further Continuing Appropriations Act, 2015 (MPRA; P.L. 113-235) made changes to some of the funding rules for multiemployer DB pensions and allowed plans that are expected to become insolvent to cut benefits to plan participants or to apply for a partition of the plan. Twenty-two multiemployer plans have applied to reduce benefits under MPRA as of March 8, 2018. Five applications, including the application by the Central States, Southeast & Southwest Areas Pension Plan (a very large plan with 400,000 participants), have been denied. Nine applications have been withdrawn, and four applications have been approved. Decisions on the applications of the remaining four plans are still pending.", "type": "CRS Report", "typeId": "REPORTS", "active": true, "formats": [ { "format": "HTML", "encoding": "utf-8", "url": "http://www.crs.gov/Reports/R43305", "sha1": "6c503b66e4d9ce99c63a6962d90bbd5e904df2fe", "filename": "files/20180329_R43305_6c503b66e4d9ce99c63a6962d90bbd5e904df2fe.html", "images": { "/products/Getimages/?directory=R/html/R43305_files&id=/1.png": "files/20180329_R43305_images_ed79c411a30497c7f4ddaeb4ae6394619a265e4c.png", "/products/Getimages/?directory=R/html/R43305_files&id=/3.png": "files/20180329_R43305_images_33380d74abfae9959533b24a1de1bb776be50c87.png", "/products/Getimages/?directory=R/html/R43305_files&id=/2.png": "files/20180329_R43305_images_ab07da4cfe107c4ddaf83b0fd6ec2d55a55c513d.png", "/products/Getimages/?directory=R/html/R43305_files&id=/0.png": "files/20180329_R43305_images_8f02185c401538bbf2989ab48679416258844df7.png" } }, { "format": "PDF", "encoding": null, "url": "http://www.crs.gov/Reports/pdf/R43305", "sha1": "d6c46dca9b3d3b5b5ef29d41719b40b88d6aa073", "filename": "files/20180329_R43305_d6c46dca9b3d3b5b5ef29d41719b40b88d6aa073.pdf", "images": {} } ], "topics": [] }, { "source": "EveryCRSReport.com", "id": 456855, "date": "2016-11-03", "retrieved": "2016-11-21T15:12:50.283601", "title": "Multiemployer Defined Benefit (DB) Pension Plans: A Primer and Analysis of Policy Options", "summary": "Multiemployer defined benefit (DB) pension plans are pensions sponsored by more than one employer and maintained as part of a collective bargaining agreement. About 3.2% of all DB pension plans, covering 25% of all DB pension plan participants, are multiemployer plans. Nearly all of the remaining DB pension plans are maintained by a single employer. A few DB pension plans are maintained by more than one employer but are not maintained under a collective bargaining agreement. In DB pension plans, participants receive a monthly benefit in retirement that is based on a formula. In multiemployer DB pensions, the formula typically multiplies a dollar amount by the number of years of service the employee has worked for employers that participate in the DB plan. \nDB pension plans are subject to funding rules in the Internal Revenue Code (26 U.S.C. \u00a7431) to ensure they have sufficient resources from which to pay promised benefits. Because single employer and multiemployer DB pension plans have different structures, Congress has established separate funding rules for these plans. \nAlthough most multiemployer DB pension plans have sufficient resources from which to pay their promised benefits, a few large plans are expected to become insolvent in the next 20 years. The Pension Benefit Guaranty Corporation (PBGC) is a U.S. government agency that insures the benefits of participants in private-sector DB pension plans. As with the funding rules, Congress established separate PBGC programs to insure single and multiemployer DB pensions. For example, PBGC becomes the trustee of terminated single employer DB pension plans. PBGC does not become the trustee of multiemployer DB pension plans; rather, it makes loans to insolvent multiemployer DB plans so the plans may continue to pay participants\u2019 guaranteed benefits.\nAlthough PBGC has sufficient resources to make loans to smaller multiemployer DB plans, the insolvency of a large multiemployer DB pension plan would likely result in a substantial strain on PBGC\u2019s multiemployer insurance program. In the absence of increased financial resources for PBGC, participants in insolvent multiemployer DB pension plans might not receive all of the benefits guaranteed by PBGC. In a report released in June 2014, PBGC indicated that the multiemployer insurance program is highly likely to become insolvent by 2025.\nThe Multiemployer Pension Reform Act of 2014, enacted as Division O in the Consolidated and Further Continuing Appropriations Act, 2015 (MPRA; P.L. 113-235) made changes to some of the funding rules for multiemployer DB pensions and allowed plans that are expected to become insolvent to cut benefits to plan participants or to apply for a partition of the plan. Eleven multiemployer plans have applied to reduce benefits under MPRA as of October 24, 2016. Two applications, including the application by the Central States, Southeast And Southwest Areas Pension Plan (a very large plan with 400,000 participants), have been denied. Decisions on the applications of remaining nine plans are still pending.", "type": "CRS Report", "typeId": "REPORTS", "active": true, "formats": [ { "format": "HTML", "encoding": "utf-8", "url": "http://www.crs.gov/Reports/R43305", "sha1": "82fc28b85140a452e5cd02541f8201b5a62629d6", "filename": "files/20161103_R43305_82fc28b85140a452e5cd02541f8201b5a62629d6.html", "images": null }, { "format": "PDF", "encoding": null, "url": "http://www.crs.gov/Reports/pdf/R43305", "sha1": "ef1d4c18b6f1b2601be32a447bcae5f9173b20fd", "filename": "files/20161103_R43305_ef1d4c18b6f1b2601be32a447bcae5f9173b20fd.pdf", "images": null } ], "topics": [] }, { "source": "EveryCRSReport.com", "id": 443343, "date": "2015-07-24", "retrieved": "2016-04-06T18:43:59.001699", "title": "Multiemployer Defined Benefit (DB) Pension Plans: A Primer and Analysis of Policy Options", "summary": "Multiemployer defined benefit (DB) pension plans are pensions sponsored by more than one employer and maintained as part of a collective bargaining agreement. About 3.2% of all DB pension plans, covering 25% of all DB pension plan participants, are multiemployer plans. Nearly all of the remaining DB pension plans are maintained by a single employer. A few DB pension plans are maintained by more than one employer but are not maintained under a collective bargaining agreement. In DB pension plans, participants receive a monthly benefit in retirement that is based on a formula. In multiemployer DB pensions, the formula typically multiplies a dollar amount by the number of years of service the employee has worked for employers that participate in the DB plan. \nDB pension plans are subject to funding rules in the Internal Revenue Code (26 U.S.C. \u00a7431) to ensure they have sufficient resources from which to pay promised benefits. Because single employer and multiemployer DB pension plans have different structures, Congress has established separate funding rules for these plans. \nAlthough most multiemployer DB pension plans have sufficient resources from which to pay their promised benefits, a few large plans are expected to become insolvent in the next 20 years. The Pension Benefit Guaranty Corporation (PBGC) is a U.S. government agency that insures the benefits of participants in private-sector DB pension plans. As with the funding rules, Congress established separate PBGC programs to insure single and multiemployer DB pensions. For example, PBGC becomes the trustee of terminated single employer DB pension plans. PBGC does not become the trustee of multiemployer DB pension plans; rather, it makes loans to insolvent multiemployer DB plans so the plans may continue to pay participants\u2019 guaranteed benefits.\nAlthough PBGC has sufficient resources to make loans to smaller multiemployer DB plans, the insolvency of a large multiemployer DB pension plan would likely result in a substantial strain on PBGC\u2019s multiemployer insurance program. In the absence of increased financial resources for PBGC, participants in insolvent multiemployer DB pension plans might not receive all of the benefits guaranteed by PBGC. In a report released in June 2014, PBGC indicated that the multiemployer insurance program is highly likely to become insolvent by 2025.\nThe Multiemployer Pension Reform Act of 2014, enacted as Division O in the Consolidated and Further Continuing Appropriations Act, 2015 (MPRA; P.L. 113-235) made changes to some of the funding rules for multiemployer DB pensions and allowed plans that are expected to become insolvent to cut benefits to plan participants or to apply for a partition of the plan.", "type": "CRS Report", "typeId": "REPORTS", "active": true, "formats": [ { "format": "HTML", "encoding": "utf-8", "url": "http://www.crs.gov/Reports/R43305", "sha1": "5d2006e6def81174a1009df2123f4c1bdca32a52", "filename": "files/20150724_R43305_5d2006e6def81174a1009df2123f4c1bdca32a52.html", "images": null }, { "format": "PDF", "encoding": null, "url": "http://www.crs.gov/Reports/pdf/R43305", "sha1": "293e7734f8498ce543844c0e4ac6d61dcdcb8f32", "filename": "files/20150724_R43305_293e7734f8498ce543844c0e4ac6d61dcdcb8f32.pdf", "images": null } ], "topics": [] }, { "source": "University of North Texas Libraries Government Documents Department", "sourceLink": "https://digital.library.unt.edu/ark:/67531/metadc491061/", "id": "R43305_2014Oct07", "date": "2014-10-07", "retrieved": "2015-01-27T19:40:46", "title": "Multiemployer Defined Benefit (DB) Pension Plans: A Primer and Analysis of Policy Options", "summary": "This report discusses the nature of multiemployer defined benefit (DB) pension plans, and issues regarding their financial solvency.", "type": "CRS Report", "typeId": "REPORT", "active": false, "formats": [ { "format": "PDF", "filename": "files/20141007_R43305_3ba97829c7213367b1225854158afa8e5fbe79e8.pdf" }, { "format": "HTML", "filename": "files/20141007_R43305_3ba97829c7213367b1225854158afa8e5fbe79e8.html" } ], "topics": [ { "source": "LIV", "id": "Pensions", "name": "Pensions" }, { "source": "LIV", "id": "Pension funds", "name": "Pension funds" }, { "source": "LIV", "id": "Finance", "name": "Finance" }, { "source": "LIV", "id": "Employee benefit plans", "name": "Employee benefit plans" } ] } ], "topics": [ "Appropriations", "Domestic Social Policy", "Economic Policy" ] }