Tag: EPPRA

Will American Rescue Plan Act Multiemployer Pension Provisions Bring Relief to Employers?

Mary Pat Campbell

Link: https://www.natlawreview.com/article/will-american-rescue-plan-act-multiemployer-pension-provisions-bring-relief-to

Excerpt:

Further, under EPPRA, the interest rate used to calculate withdrawal liability for plans receiving assistance is limited. The interest rate used to calculate withdrawal liability would be capped, in part, by subsections of ERISA, plus 2%, which would currently be approximately 5%. Of course, the lower the interest rate used by a plan for this purpose, the higher the resulting employer withdrawal liability.

Importantly, less than 15% of the 1,400 multiemployer pension plans will receive financial assistance. Accordingly, the bulk of employer obligations to multiemployer plans, even those that are significantly underfunded, will be unaffected by EPPRA. With respect to employers who contribute to plans that receive EPPRA assistance, PBGC is expected to issue guidance that would limit (in whole or in part) the benefit of such assistance to employers.

The impact of EPPRA’s special financial assistance on contributing employers will largely depend on PBGC regulations and guidance. Employers who are currently confronted with an immediate decision regarding withdrawal from a multiemployer pension plan (for example, employers in the middle of labor negotiations) likely will need to exercise patience pending the issuance of PBGC guidance.

Author(s): Paul A. Friedman, Robert R. Perry, David M. Pixley

Publication Date: 15 March 2021

Publication Site: National Law Review

Investors ready for change as Democrats take control

Mary Pat Campbell

Link: https://www.pionline.com/washington/investors-ready-change-democrats-take-control

Excerpt:

While the COVID-19 pandemic and its economic impact present the most pressing challenges, Democratic control of Congress and the White House could also spur action on issues ranging from climate change to scrutiny of private equity practices.

…..

Mr. Neal’s first bill introduced in the new 117th Congress addresses the multiemployer pension crisis that he said “has only worsened” in the COVID-19 economic downturn. A similar proposal was introduced by members of the House Education and Labor Committee, whose chairman, Robert C. “Bobby” Scott, D-Va., said the pandemic could cause as many as 180 more multiemployer plans to become insolvent, adding up to 300 plans facing failure. Both leaders are urging that the proposed Emergency Pension Plan Relief Act of 2021 be attached to a COVID-19 relief measure now before Congress.

…..

Potential legislation is expected to build on the panel’s climate action plan calling for clean energy tax credits and jobs initiatives, investments in water infrastructure and research into land and ocean climate solutions, among other ideas.

Author: Hazel Bradford

Publication Date: 25 January 2021

Publication Site: Pensions & Investments

Democrats Introduce Bill to Protect Pensions, Expand PGBC’s Power

Mary Pat Campbell

Link: https://www.ai-cio.com/news/democrats-introduce-bill-protect-pensions-expand-pgbcs-power/

Description: Bill introduced in House of Representatives – EPPRA (Emergency Pension Plan Relief Act of 2021) intended for multiemployer pension protection. Boosts PBGC MEP guarantee, stops benefit reductions, allows for partition of failing MEPs. Similar provisions had been in HEROES bill in 2020 (not passed).

Author: Michael Katz

Publication Date: 22 January 2021

Publication Site: ai-CIO