Protecting Employers Since 1985
“Every Chicken Comes Home to Roost”
While the above title is really the restatement of a very old Farmer’s Almanac comment, it has particular application for what is taking place with regard to Multi-Employer Pension Plans throughout the United States. An analysis of the Multi-Employer Pension Plan Funding Crisis that was released on or about November 1, 2018 by the Actuarial Consulting Firm Cheiron, Inc., claims that 121 of the current Multi-Employer Pension Plans are underfunded by approximately 49 billion dollars. This is an increase of approximately seven (7) Plans from the previous year, with an underfunding in 2017 of 36.4 billion – a 13.4 billion dollar increase in 2017 versus 2018! The Plan that faces the biggest deficit continues to be the Central States Pension Fund, which provides Retirement Benefits for more than 400,000 Teamsters and is currently 22.9 billion dollars in the hole.
It should also be noted that the struggling Multi-Employer Pension Plans are set to lose a very important safety net by the year 2026 – the year in which the PBGC (Pension Benefit Guaranty Corporation) is set to go belly-up. The PBGC Multi-Employer Pension Protection Program is currently running at a 59 billion dollar deficit and is set to rise to an 80 billion deficit no later than 2026.
The Joint Select Committee on Solvency of Multi-Employer Pension Plans, chaired by Senator Sherrod Brown, Democrat of Ohio, and Orrin Hatch, Republican of Utah, who is not up for reelection, formed in February to deal with this problem. While the Committee of Republicans and Democrats seems to be currently at odds (why is that not a surprise), there seems to be movement in the Committee with regard to offering low interest Government Loans to struggling Multi-Employer Pension Plans and raising the premium on Plans that is paid into the PBGC. It is probable that both will occur.
If no solution is reached by the Joint Select Committee and the PBGC Multi-Employer Pension Program goes under, individual Retirees who are dependent on these Plans for Benefits may see Pension cuts up to 90% or more.
Hopefully, the Senators will come to some type of resolution to protect the interests of the millions of Americans, mostly blue collar former Employees, who are dependent on Pension Plans for their income!
Questions? Contact attorney Walter J. Liszka at our Chicago office at (312) 629-9300 or by email at firstname.lastname@example.org
Stay up-to-date about developments in the Midwest
Contact us at any of our five Midwest locations
Schedule your confidential consultation
Contact Wessels Sherman Joerg Liszka Laverty Seneczko P.C. if you would like to speak with one of our experienced labor and workplace attorneys, contact any of our five office locations and schedule a consultation.