See Annual Funding Notice for Defined Benefit Pension Plans and Annual Funding & Other Notices
for Multiemployer Plans for more information.
Withdrawal Liability (for
Multiemployer Plans only)- The liability assessed by a multiemployer defined benefit plan against an employer that (1) permanently stops contributing to the plan, (2) permanently ceases covered operations under the plan, or (3) under certain circumstances, reduces its contributions to the plan.
Including those who have not yet retired and participants
in multiemployer plans receiving financial assistance, PBGC is responsible for the current and future pensions of about 1.5 million people.
Unlike terminated single - employer plans, the plan sponsor of a
terminated multiemployer plan continues to administer the plan and pay vested benefits out of existing plan assets.
Another PBGC program
insures multiemployer plans covering unionized workers of non-related employers in the same industry, such as trucking or construction.
Though
average multiemployer plan may be better funded, the average hides a lot, as there are more people expecting benefits from plans that are dramatically underfunded.
Multiemployer plans provide pension portability, allowing participants to accumulate benefits earned for service with different employers throughout their careers.
PBGC's guarantee of the benefits in a
terminated multiemployer plan — payable as financial assistance to the plan — starts if and when the plan is unable to make payments at the level guaranteed under ERISA.
Boston College estimates the nation's 1,400
multiemployer plans (corporate) are facing a $ 553 billion shortfall.
It's not so extreme that there aren't other underfunded plans as bad off as
this multiemployer plan.
As a result UPS spent $ 6.1 billion to exit
the multiemployer plan, while still guaranteeing benefits to its own employees.
The trouble with
multiemployer plans is that as some employers fail, the remainder of the employers have to pick up the bill for pensions.
The $ 6.1 B was the ransom payment to escape something far worse in an underfunded
multiemployer plan.
Plan Sponsor (
Multiemployer Plan)- Typically, the plan's joint board of trustees is the plan sponsor.
Termination (
Multiemployer Plans)- The withdrawal of all contributing employers of a plan (known as mass withdrawal), or a plan amendment that ends participants» ability to earn additional credit for service with any employer in the plan as of the amendment's effective date.
For
multiemployer plans, a benefit or benefit increase that has been in effect under a plan for less than five years (60 months) is not eligible for PBGC's multiemployer guarantee.
Multiemployer Plan - Generally, a collectively bargained pension plan maintained by more than one unrelated employer, usually within the same or related industries, and one or more labor unions.
See also Termination (for
Multiemployer Plans).
Financial Assistance (for
Multiemployer Plans only)- Under PBGC's multiemployer insurance program, a PBGC loan provided to a multiemployer plan that is insolvent.
Contribution Base Unit (CBU)(for
Multiemployer Plans only)- The unit of employee activity for which an employer has an obligation to contribute under a multiemployer plan.
See Termination (for
Multiemployer Plans).
For
multiemployer plans, the plan administrator is required to pay the annual premium.
Notice of Insolvency Benefit Level (for
Multiemployer Plans only)- The notice, required by ERISA, that a multiemployer plan must provide to (1) participants, (2) PBGC, and (3) certain other parties, when the plan has, or expects to, run out of money for a plan year.
Notice of Insolvency (for
Multiemployer Plans only)- The notice, required by ERISA, that a multiemployer plan must provide to (1) participants, (2) PBGC, and (3) certain other parties, when the plan has, or expects to, run out of money for a plan year or years.
The multiemployer plan guarantee is subject to several legal limits, including the multiemployer guarantee, the phase - in limit, and a limit that is similar to the accrued - at - normal limit.
See Introduction to
Multiemployer Plans, Multiemployer Insurance Program Facts, and PBGC's Multiemployer Program for more information.
For
multiemployer plans, PBGC guarantees a participant's disability benefit, subject to legal limits, if the participant's plan provides such a benefit and the participant became entitled to that benefit before the plan terminated.
See Multiemployer Pension Reform Act of 2014 FAQs,
Multiemployer Plans and Partition, and PBGC Proposes Rule to Facilitate Mergers of Multiemployer Pension Plans for more information.
A multiple employer plan is a type of single - employer plan that is maintained by two or more unrelated companies and does not meet the requirements of
a multiemployer plan.
For
multiemployer plans, see Multiemployer Guarantee.
Plans subject to the Multiemployer Pension Plan Amendments Act of 1980 (MPPAA) assess withdrawal liability against an employer for its allocable share of the plan's unfunded vested benefits upon a complete or partial withdrawal of the employer from
the multiemployer plan, rather than on plan termination.
Insolvency (for
Multiemployer Plans only)- A multiemployer plan that has run out of money and is unable to pay benefits guaranteed by PBGC which are due during the plan year.
The per - participant flat premium rate for plan years beginning in 2018 is $ 74 for single - employer plans (up from a 2017 rate of $ 69) and $ 28 for
multiemployer plans (no change from 2017).
A multiemployer plan that (i) is not in critical status for a plan year but is projected by the plan actuary to be in critical status in any of the succeeding 5 plan years, and (ii) does not make an election to be in critical status for the plan year, must provide notice of its projected critical status to PBGC.
She also negotiates with regulatory agencies on behalf of employers and
multiemployer plans to prevent the assessment of penalties and excise taxes or the disqualification of plans.