{"id":1843,"date":"2020-11-19T16:21:18","date_gmt":"2020-11-19T16:21:18","guid":{"rendered":"https:\/\/www.amalgamatedbenefits.com\/amalgamated-employee-benefits-administrators\/?p=1843"},"modified":"2022-08-03T20:33:15","modified_gmt":"2022-08-03T20:33:15","slug":"covid-19-impacts-on-multiemployer-pension-plans-demand-new-considerations","status":"publish","type":"post","link":"https:\/\/www.amalgamatedbenefits.com\/amalgamated-employee-benefits-administrators\/covid-19-impacts-on-multiemployer-pension-plans-demand-new-considerations\/","title":{"rendered":"COVID-19 Impacts on Multiemployer Pension Plans Demand New Considerations"},"content":{"rendered":"<p class=\"leading\">Multiemployer pension plans have been especially hard hit as a result of COVID-19 and its effect on many market sectors. A recent study by the global consulting and actuarial firm of Milliman, Inc. uncovered just how significant the pandemic\u2019s impact has been on multiemployer pension plans. The <em>Multiemployer Pension Funding Study<\/em> reported that as of June 30, 2020, the aggregate funded percentage of multiemployer plans had dropped to 82% from 85% at the close of 2019. This decline has resulted in a $26 billion increase in the aggregate funding shortfall. The study indicated that for the first half of 2020, the estimated investment return for a simplified portfolio was approximately -1.3%. Concern is over the impact of a plan\u2019s funding position and annual Pension Protection Act zone status. &nbsp;A<em> National Law Review<\/em> (\u201cWhat Construction Contractors Can Expect from Multiemployer Pension Plans Following COVID-19 Crisis\u201d) highlighted some of the anticipated outcomes, which include:<\/p>\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"900\" height=\"600\" src=\"https:\/\/www.amalgamatedbenefits.com\/amalgamated-employee-benefits-administrators\/wp-content\/uploads\/sites\/4\/2020\/11\/taft-hartley-plan-workers.jpeg\" alt=\"Construction workers working on a ceiling of a building\" class=\"wp-image-1844\" srcset=\"https:\/\/www.amalgamatedbenefits.com\/amalgamated-employee-benefits-administrators\/wp-content\/uploads\/sites\/4\/2020\/11\/taft-hartley-plan-workers.jpeg 900w, https:\/\/www.amalgamatedbenefits.com\/amalgamated-employee-benefits-administrators\/wp-content\/uploads\/sites\/4\/2020\/11\/taft-hartley-plan-workers-300x200.jpeg 300w, https:\/\/www.amalgamatedbenefits.com\/amalgamated-employee-benefits-administrators\/wp-content\/uploads\/sites\/4\/2020\/11\/taft-hartley-plan-workers-768x512.jpeg 768w\" sizes=\"(max-width: 900px) 100vw, 900px\" \/><\/figure>\n<ul>\n<li>Increases in potential withdrawal liabilities<\/li>\n<li>Demand for additional withdrawal liability payments from employers that have already withdrawn and satisfied its withdrawal liability obligations<\/li>\n<li>Heightened scrutiny of plans especially within certain sectors such as building and construction<\/li>\n<li>Increase in contribution rates<\/li>\n<li>Plan insolvency and benefit reductions<\/li>\n<li>Projected insolvency of the Pension Benefit Guaranty Corp. (PBGC) Multiemployer Insurance Program<\/li>\n<\/ul>\n<p>Given the ramifications of these expected outcomes, it is critical that employers in multiemployer plans take measures now to reduce their potential risks. Specifically, measures that can better prepare them include:<\/p>\n<ul>\n<li>Assess your potential withdraw liability exposure. To do so, obtain a current withdrawal liability estimate annually from the multiemployer plan, review the plan documents with a focus on special funding rules and any industry-related clauses regarding withdrawal liability. &nbsp;For example, any employers in the building and construction industry that have already withdrawn within the past five years under that industry\u2019s exemption for withdrawal liability, take steps to preserve the exemption. e.g., If the company is considering subcontracting the same or similar work within the jurisdiction of the Collective Bargaining Agreement during the remaining five-year period, consider whether the subcontracting would cause the exemption for the withdrawal liability to be revoked. Be mindful of plan notices pertaining to the plan\u2019s funding status.<\/li>\n<li>Assess whether a complete or partial withdrawal is anticipated given your current and projected operations.<\/li>\n<li>Review related entities participating in your business that may be jointly liable and if an owner may have personal liability.<\/li>\n<li>Rely on a pension actuary to assess the multiemployer plan\u2019s fiscal condition.<\/li>\n<li>Review collective bargaining strategies to better manage the risk of withdrawal liability.<\/li>\n<\/ul>\n<p>As with all complex benefit plan matters, it is advisable to work closely with your plan\u2019s third-party administrator, plan fiduciary and other professionals involved in the plan\u2019s administration, compliance, and fiscal stability.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Multiemployer pension plans have been especially hard hit as a result of COVID-19 and its effect on many market sectors. A recent study by the global consulting and actuarial firm of Milliman, Inc. uncovered just how significant the pandemic\u2019s impact has been on multiemployer pension plans. The Multiemployer Pension Funding Study reported that as of&#8230;  <a class=\"excerpt-read-more\" href=\"https:\/\/www.amalgamatedbenefits.com\/amalgamated-employee-benefits-administrators\/covid-19-impacts-on-multiemployer-pension-plans-demand-new-considerations\/\" title=\"Read COVID-19 Impacts on Multiemployer Pension Plans Demand New Considerations\">Read more &raquo;<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[2],"tags":[],"acf":[],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.amalgamatedbenefits.com\/amalgamated-employee-benefits-administrators\/wp-json\/wp\/v2\/posts\/1843"}],"collection":[{"href":"https:\/\/www.amalgamatedbenefits.com\/amalgamated-employee-benefits-administrators\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.amalgamatedbenefits.com\/amalgamated-employee-benefits-administrators\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.amalgamatedbenefits.com\/amalgamated-employee-benefits-administrators\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.amalgamatedbenefits.com\/amalgamated-employee-benefits-administrators\/wp-json\/wp\/v2\/comments?post=1843"}],"version-history":[{"count":2,"href":"https:\/\/www.amalgamatedbenefits.com\/amalgamated-employee-benefits-administrators\/wp-json\/wp\/v2\/posts\/1843\/revisions"}],"predecessor-version":[{"id":2124,"href":"https:\/\/www.amalgamatedbenefits.com\/amalgamated-employee-benefits-administrators\/wp-json\/wp\/v2\/posts\/1843\/revisions\/2124"}],"wp:attachment":[{"href":"https:\/\/www.amalgamatedbenefits.com\/amalgamated-employee-benefits-administrators\/wp-json\/wp\/v2\/media?parent=1843"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.amalgamatedbenefits.com\/amalgamated-employee-benefits-administrators\/wp-json\/wp\/v2\/categories?post=1843"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.amalgamatedbenefits.com\/amalgamated-employee-benefits-administrators\/wp-json\/wp\/v2\/tags?post=1843"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}