A chance to enter a new era of financial transparency and awareness for public pension plans

Link: https://reason.org/commentary/a-chance-to-enter-a-new-era-of-financial-transparency-and-awareness-for-public-pension-plans/

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On Feb. 11, the Actuarial Standards Board issued a revised Actuarial Standard of Practice No. 4, effective February 15, 2023. The rollout has been low-key. The announcement says:

“Notable changes made to the existing 2013 version include expanding the scope to clarify the application of the standard when the actuary selects an output smoothing method and when an assumption or method is not selected by the actuary.”

But this description obscures a significant new required disclosure, one which follows years of controversy and acrimony within and among actuaries and the public pension plan community at large.  The requirement was the overwhelming focus during the drafting and comment period.     

The new required disclosure reflects economic reality better than any currently required number.

Author(s): Larry Pollack

Publication Date: 25 Mar 2022

Publication Site: Reason

UMWA 5500 Update – 6/30/21

Link: https://burypensions.wordpress.com/2022/06/02/umwa-5500-update-6-30-21/

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Five years ago retired coal miners traveled to Washington, D.C. to lobby lawmakers to put in place a federal safety net in case the United Mine Workers of America (UMWA) pension fund fails. Coal plant closures and company bankruptcies have sent the pension fund to the edge of collapse. In October, 2019 Murray Energy, the last major company propping up the dwindling fund, also went bankrupt and the prediction was insolvency in FY23.

By the April 15, 2022 deadline, the plan submitted their 5500 form for the year ended 6/30/21 showing only 68 active participants remaining and providing an idea of how much more taxpayers will now be on the hook for on top of what appears to be the $330 million that came in during the plan year.

Author(s): John Bury

Publication Date: 3 June 2022

Publication Site: Burypensions

PBGC Approves Bailouts for Five More Multiemployer Plans in May

Link: https://www.ai-cio.com/news/pbgc-approves-bailouts-for-five-more-multiemployer-plans-in-may/

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The Pension Benefit Guaranty Corporation has approved applications submitted to the Special Financial Assistance Program by five more struggling multiemployer plans in May alone. The PBGC has now approved more than $6.2 billion in bailout funds to plans covering close to 120,000 workers and retirees.

The PBGC said it will provide $210.4 million in SFA funding to the Local 365 UAW Pension Fund Pension Plan of Englewood Cliffs, New Jersey, which covers 3,736 participants in the manufacturing industry.

The Local 365 UAW Plan became insolvent in December 2020, at which time the PBGC began providing the plan with financial assistance. As required by law, the plan reduced participants’ benefits to the PBGC guarantee levels, which were approximately 20% below the benefits payable under the terms of the plan.

Author(s): Michael Katz

Publication Date: 23 May 2022

Publication Site: ai-CIO

SFA Update – Two Refilers

Link: https://burypensions.wordpress.com/2022/05/20/sfa-update-two-refilers/

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The PBGC Special Financial Assistance program for troubled multiemployer plans weekend update showed a refiling of a prior withdrawal (America’s Family Benefit Retirement Plan) that asked for $4,.5 million less and one withdrawal and immediate refile (UTWA NJ Union Employer Pension Plan) that asked for $17,918 more.

Author(s): John Bury

Publication Date: 20 May 2022

Publication Site: burypensions

Central States Fall

Link: https://burypensions.wordpress.com/2022/05/09/central-states-fall/

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All 1,298 pages of the Central States, Southeast and Southwest Areas Pension Fund bailout application is on the SFA website but, for me, it is these two pages that tell the tale of the fall of this and many other union pension plans.

…..

Funded ratio: 21.91%

Unfunded Liabilities as of 1/1/20: $43,878,930,013

Asset Value (Market) as of 12/31/20: $10,409,490,502

Contributions 2020 (MB): $662,009,633

Contributions 2020 (H): $406,600,320

Payouts 2020: $2,842,184,040

Expenses 2019: $53,552,2071

Author(s): John Bury

Publication Date: 9 May 2022

Publication Site: burypensions

SFA Update – One Revision; One Withdrawal

Link:https://burypensions.wordpress.com/2022/04/15/sfa-update-one-revision-one-withdrawal/

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The PBGC Special Financial Assistance program for troubled multiemployer plans weekend update showed one plan withdrawing and reapplying immediately with another simply withdrawing.

Our updated summary of the 35 plans in the system – 10 approvals and 25 under review:

Author(s): John Bury

Publication Date: 15 Apr 2022

Publication Site: Burypensions

Teamsters Pension Applies for Bailout After $58 Million Legal Appeal Dismissed

Link: https://www.ai-cio.com/news/teamsters-pension-applies-for-bailout-after-58-million-legal-appeal-dismissed/

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A Teamsters pension fund has applied to the Pension Benefit Guaranty Corporation for a bailout after a circuit court denied its appeal in a lawsuit seeking $58 million in withdrawal liabilities from C&S Wholesale Grocers Inc.

The New York State Teamsters Conference Pension and Retirement Fund, a multiemployer plan based in Syracuse, New York, has applied to PBGC for special financial assistance under the American Rescue Plan Act to improve its financial health and restore benefits previously suspended under the Multiemployer Pension Reform Act. The pension fund said the restoration of suspended benefits would be retroactive and prospective, which means participants would be repaid for benefits reduced previously, while also having benefits restored to pre-suspension levels.

Author(s): Michael Katz

Publication Date: 14 Feb 2022

Publication Site: ai-CIO

Education & Labor Committee Releases Multiemployer Pension Rescue Tracker

Link:https://edlabor.house.gov/media/press-releases/education-and-labor-committee-releases-multiemployer-pension-rescue-tracker

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Today, the House Committee on Education and Labor unveiled a new Multiemployer Pension Rescue Tracker to highlight the hard-earned pensions saved and businesses protected under Congressional Democrats’ and President Biden’s American Rescue Plan Act.  The multiemployer pension crisis – which was accelerated by the COVID-19 pandemic – threatened to strip more than a million retirees of the pensions they earned over a lifetime of work, jeopardized tens of thousands of businesses and endangered tens of thousands of jobs.

In response, the American Rescue Plan Act created a Special Financial Assistance (SFA) Program to avert the immediate crisis threatening the retirement security of American workers, retirees, and their families.  This solution was supported by a diverse group of stakeholders, including the AFL-CIO, AARP, the United States Chamber of Commerce, UPS and scores of other employers who participate in multiemployer plans.

….

To view the pension tracker, click here.

Author: Education and Labor Committee

Publication Date: 2 Feb 2022

Publication Site: House of Representatives

SFA Update – One New Billion Dollar Filer

Link: https://burypensions.wordpress.com/2022/02/04/sfa-update-one-new-billion-dollar-filer/

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The PBGC Special Financial Assistance program for troubled multiemployer plans weekend update showed one new plan applying – New York State Teamsters Conference Pension Plan out of Syracuse, NY which, when compared to the other applicants, is the second largest by participant count, asking for the third largest dollar amount amount ($1,035,864,068) and the second smallest as a percentage of unfunded liabilities (30.12%).

Author(s): John Bury

Publication Date: 4 Feb 2022

Publication Site: burypensions