114 out of the nation's 1,400 multiemployer pension plans covering 1.3 million workers are underfunded to the tune of $36.4 billion, with plans expected to start going insolvent in the next 5 years or so, an Aug. 2017 analysis by Cheiron has found.
This is the end result of unsustainable collective bargaining arrangements between unions and employer, creating defined benefit pension plans that promise retirements far in excess of what could be justified by monthly contributions and market returns.
According to the PBGC, the payouts under existing law can be "Summarized as a maximum guarantee amount of $12,870 per year. But that is only a special case of the guarantee; it applies to people who worked exactly 30 years in jobs covered by the plan and have a moderately high promised benefit. PBGC's maximum guarantee is lower for participants who worked fewer than 30 years and higher for those who worked more than 30 years."
Of the $36.4 billion in unfunded liabilities, 47 percent or $17.2 billion is for a single plan, the Teamsters Central States fund.
The remaining $10 billion of unfunded liabilities is distributed among the smaller plans.
In the meantime, Congress is stepping into the crisis, with the Joint Select Committee on Solvency of Multiemployer Plans expected to be completing its work on a report to make recommendations for the PBGC and Congress to follow.
It's time to retire the defined benefit plan, as corporate America has already done, once and for all.
http://dailytorch.com/2018/07/the-36-billion-multiemployer-pension-time-bomb-is-almost-ready-to-go-off/
This is the end result of unsustainable collective bargaining arrangements between unions and employer, creating defined benefit pension plans that promise retirements far in excess of what could be justified by monthly contributions and market returns.
According to the PBGC, the payouts under existing law can be "Summarized as a maximum guarantee amount of $12,870 per year. But that is only a special case of the guarantee; it applies to people who worked exactly 30 years in jobs covered by the plan and have a moderately high promised benefit. PBGC's maximum guarantee is lower for participants who worked fewer than 30 years and higher for those who worked more than 30 years."
Of the $36.4 billion in unfunded liabilities, 47 percent or $17.2 billion is for a single plan, the Teamsters Central States fund.
The remaining $10 billion of unfunded liabilities is distributed among the smaller plans.
In the meantime, Congress is stepping into the crisis, with the Joint Select Committee on Solvency of Multiemployer Plans expected to be completing its work on a report to make recommendations for the PBGC and Congress to follow.
It's time to retire the defined benefit plan, as corporate America has already done, once and for all.
http://dailytorch.com/2018/07/the-36-billion-multiemployer-pension-time-bomb-is-almost-ready-to-go-off/
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