The era of big government bailouts is over. To ensure benefit preservation and retirement security for the millions of workers who rely on multiemployer pension plans, the Partnership for Multiemployer Retirement Security has developed solutions that will enable the private sector to directly address the challenges facing the system.
Three primary areas of action that we support (preservation, remediation, and innovation) will strengthen and enhance the current system for millions of workers:
- Preservation: Proposals to Strengthen the Current System. Some of our proposals represent technical refinements to the Pension Protection Act (PPA), while others address shortcomings of the system outside of PPA. These proposals are designed to provide additional security for the majority of plans that have successfully weathered the recent economic crises, those that are on the path to recovery and those that, with expanded access to tools provided in the PPA and subsequent relief legislation, will be able to achieve their funding goals to ensure retirement security for workers.
- Remediation: Measures to Assist Deeply Troubled Plans. A small minority of deeply troubled plans are currently projected to become insolvent in the coming decade. For the small number of plans that continue to face insolvency despite taking all reasonable measures allowed under current law, The Partnership for Multiemployer Security recommends that limited authority be granted for plans to take early corrective actions to ensure workers receive beyond what would be guaranteed by the PBGC if insolvency were to occur. Those corrective actions include as a last resort the partial suspension of accrued benefits for active and inactive vested participants, and the partial suspension of benefits in pay status for retirees. These suspensions would provide, at a minimum, 110% of PBGC guaranteed benefits and would be limited to the extent necessary to prevent insolvency. The Partnership for Multiemployer Retirement Security also recommends PBGC oversight and approval to ensure any remediation measures taken by plans are truly a last resort to avoid insolvency and ensure long term retirement security for workers.
- Innovation: New Structures to Foster Innovative Plan Designs. The Partnership for Multiemployer Retirement Security also proposes encouraging voluntary innovative approaches to provide secure lifetime retirement income for participants. The adoption of flexible plan designs would be voluntary and subject to the collective bargaining process. These plans could include, but would not be limited to, variable annuity and “Target Benefit” plans which would permit adjustment of accrued benefits. However, to protect plan participants from the risk associated with adjustment of benefits, these models would impose greater funding discipline than is required under current defined benefit rules.
To review our proposals in full, read the report, Solutions Not Bailouts: A Comprehensive Plan from Business and Labor to Safeguard Retirement Security for Multiemployer Plan Participants, Protect Taxpayers and Spur Economic Growth.