Some 114 multiemployer pension funds are on track to fail within the next 20 years. These funds, covering 1.3 million workers, are currently $36.4 billion underfunded.
The funds have total assets of $43.5 billion and liabilities of $79.9 billion. Most of that shortfall is attributed to the Central States Teamsters plan ($17.2 billion), the Bakery and Confectionery Union plan ($3.2 billion) and the United Mine Workers plan ($2.4 billion).
Pensions and Investments is reporting that, in addition to these 114 plans, there are another 53 multiemployer plans form which all contributing employers have already withdrawn. The Pension Benefit Guaranty Corp. (PBGC) will have to step in with financial assistant – until it, too, goes bankrupt. The PBGC program is slated to run out of money in 2025.
Three of the failing multiemployer pension plans have sought and received permission from the U.S. Department of Treasury to cut retiree benefits in an effort to heal their underfunded status: New York State Teamsters Conference Pension and Retirement Fund, the United Furniture Workers Pension Fund, and Iron Workers Local 17 Pension Fund.
Matt Austin owns Austin Legal, LLC, a boutique law firm based in Ohio that limits its representation to employers dealing with labor, employment, and OSHA matters. You can reach Matt by calling him at (614) 843-3041 or emailing him at Matt@MattAustinLaborLaw.com.