As the country continues to claw its way out of a recession, a small number of multiemployer pension plans are still teetering on the precipice of insolvency. And, if those pension plans fail, beneficiaries would be forced to rely on the taxpayer-funded federal pension insurance system, the Pension Benefit Guaranty Corp. (PBGC), which could lead to reduced benefits and added uncertainty. But, the Retirement Security Review Commission (RSRC) of the National Coordinating Committee for Multiemployer Plans (NCCMP) is rejecting the idea of a government bailout and offering up a solution, and just in time, too, as many of the provisions in the Pension Protection Act of 2006 (PPA) are set to expire at the close of 2014.
In use since the 1940s, multiemployer pension plans allow pension portability for workers who tend to change employers frequently within the same industry. These plans allow multiple employers to pool contributions, benefits, and risks for their unionized beneficiaries. Of the roughly 1,500 multiemployer pension plans in the U.S., 54 percent are construction industry plans, according to John McNerney, general counsel for the Mechanical Contractors Association of America (MCAA), a member of the RSRC.