On July 24, 2019, the United States House of Representatives passed a measure designed to rescue troubled Multiemployer Pension Plans. The Rehabilitation For Multiemployer Pension Act (House Bill No. 397) would provide loans and grants to insolvent and near-insolvent Multiemployer Pension Plans. The measure would create a new Treasury Department Agency-The Pension Rehabilitation Administration, to administer the loans and grants. It is estimated that there are over 130 Multiemployer Pension Plans that will run out of money within the next twenty (20) years. In addition, the Pension Benefit Guaranty Corporation (PBGC) the current government agency that insures Multiemployer Pension Funds is expected to run out of money by 2025 without congressional action.
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.