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.
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.
The American Academy of Actuaries presents this summary of select significant regulatory and legislative developments in 2021 at the state, federal, and international levels of interest to the U.S. actuarial profession as a service to its members.
The Academy focused on key policy debates in 2021 regarding pensions and retirement, health, life, and property and casualty insurance, and risk management and financial reporting.
Responding to the COVID-19 pandemic, addressing ever-changing cyber risk concerns, and analyzing the implications and actuarial impacts of data science modeling continued to be a focus in 2021.
Practice councils monitored and responded to numerous legislative developments at the state, federal, and international level. The Academy also increased its focus on the varied impacts of climate risk and public policy initiatives related to racial equity and unfair discrimination in 2021.
The Academy continues to track the progress of legislative and regulatory developments on actuarially relevant issues that have carried over into the 2022 calendar year.
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.
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.
The Pension Benefit Guaranty Corporation (PBGC) has approved a $100.5 million bail out of the Local 408 International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America Pension Plan. It is the fifth plan approved by the PBGC under the Special Financial Assistance (SFA) program, which was enacted under the American Rescue Plan Act of 2021 (ARP).
The Union, New Jersey-based plan, which covers over 1,000 participants in the transportation industry, was certified to be in critical and declining status in the plan year that began in 2020 and became insolvent last September. The plan was required by law to reduce its participants’ benefits to the PBGC guarantee level, which was approximately 60% below the benefits payable under the terms of the pension.
Struggling pension plans are required under the SFA program to demonstrate eligibility and to calculate the amount of assistance per ARP and PBGC guidelines. Funds provided under the program may be used only to pay plan benefits and administrative expenses, and plans receiving aid are also subject to certain terms, conditions, and reporting requirements.
It is Super Bowl time which, for some of us, means that the new 5500 for the Bert Bell/Pete Rozelle NFL Player Retirement Plan (EIN 13-6043636) is out and we get a better idea of how much Joe Burrow really has in common with a Cleveland Iron Worker.
At 25.53% funding (a massive decrease from last year) are the actuaries setting up the next play for this plan to be a Hail Mary?