{"id":1951,"date":"2021-11-01T14:17:13","date_gmt":"2021-11-01T14:17:13","guid":{"rendered":"https:\/\/www.amalgamatedbenefits.com\/amalgamated-employee-benefits-administrators\/?p=1951"},"modified":"2022-08-11T19:02:20","modified_gmt":"2022-08-11T19:02:20","slug":"latest-developments-affecting-multiemployer-plans","status":"publish","type":"post","link":"https:\/\/www.amalgamatedbenefits.com\/amalgamated-employee-benefits-administrators\/latest-developments-affecting-multiemployer-plans\/","title":{"rendered":"Latest Developments Affecting Multiemployer Plans"},"content":{"rendered":"

To help multiemployer pension plans stay solvent as employers continue to be challenged by the pandemic, The American Rescue Plan Act of 2021 is providing an estimated $94 billion in special financial assistance to qualifying plans. Many employers in multiemployer pension plans have already taken advantage of this relief.<\/p>\n

\"Black<\/figure>\n

Withdrawal Rules<\/h3>\n

With respect to future withdrawals, the Pension Benefit Guaranty Corporation (PBGC) announced on July 12, 2021, that any \u201cspecial financial assistance (SFA) is not intended to reduce withdrawal liability or to make it easier for employers to withdraw.\u201d That said, the SFA will be regarded as plan assets for determining a plan\u2019s unfunded vested benefit liability. As an example, if a multiemployer plan receives SFA in fiscal year 2022, withdrawals taken in fiscal year 2023 will take into account these amounts; which will serve to reduce the plan\u2019s future withdrawal liability calculations in relation to increases in the plan\u2019s assets. This will benefit employers in multiemployer plans, however, there are other rules which may prove more challenging.<\/p>\n

Other Important SFA Assistance Requirements<\/h3>\n

Among other developments that should be of note to the 200 multiemployer plans eligible for SFA, employers should understand the PBGC\u2019s mandate regarding unfunded vested benefit calculations after receipt of the SFA. Specifically, these calculations must be made using interest rates formerly reserved for mass withdrawals. The PBGC issued this rule with the caveat that these interest rates, now at an all-time low, are to reflect those used by insurers when determining pension plan annuities pricing. As a result of this rule, unfunded vested benefits and the resulting withdrawal liability will increase significantly. This rule will be effective for 10 years after the plan\u2019s receipt of the SFA or when there are no remaining SFA assets in the plan; whichever is longer.<\/p>\n

Some Fine Points to Note<\/h3>\n

An estimated three million workers, retirees and their families will potentially be affected by this SFA. Therefore, it is critical that multiemployer pension plans be aware of some of the finer points in the SFA program and their ramifications. Many are complicated and require guidance. For instance, some plans may qualify to apply for the SFA, but when they begin their calculations, they might find that the SFA will be zero. Another of the more complex aspects of the SFA rules relates to plans with approved benefit suspensions under the Multiemployer Pension Reform Act of 2014 (MPRA). Trustees for these plans need to evaluate whether continuing with these suspensions and not taking SFA, or whether restoring previously suspended benefits under MPRA and applying for SFA, makes the most sense.  In order to make the best decisions, it is important that trustees of multiemployer pension plans along with their administrators and advisors gain a full understanding of the ARPA and its effect on multiemployer plans.<\/p>\n","protected":false},"excerpt":{"rendered":"

To help multiemployer pension plans stay solvent as employers continue to be challenged by the pandemic, The American Rescue Plan Act of 2021 is providing an estimated $94 billion in special financial assistance to qualifying plans. Many employers in multiemployer pension plans have already taken advantage of this relief. Withdrawal Rules With respect to future… Read more »<\/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\/1951"}],"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=1951"}],"version-history":[{"count":2,"href":"https:\/\/www.amalgamatedbenefits.com\/amalgamated-employee-benefits-administrators\/wp-json\/wp\/v2\/posts\/1951\/revisions"}],"predecessor-version":[{"id":2117,"href":"https:\/\/www.amalgamatedbenefits.com\/amalgamated-employee-benefits-administrators\/wp-json\/wp\/v2\/posts\/1951\/revisions\/2117"}],"wp:attachment":[{"href":"https:\/\/www.amalgamatedbenefits.com\/amalgamated-employee-benefits-administrators\/wp-json\/wp\/v2\/media?parent=1951"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.amalgamatedbenefits.com\/amalgamated-employee-benefits-administrators\/wp-json\/wp\/v2\/categories?post=1951"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.amalgamatedbenefits.com\/amalgamated-employee-benefits-administrators\/wp-json\/wp\/v2\/tags?post=1951"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}