Multiemployer Plans

[Guidance Overview] FASB's Proposed New Disclosures About Employers'Participation in Multiemployer Plans
Excerpt:"Information about plan funded status, contribution trends, potential withdrawal liability,'warning zone'status and funding improvement or rehabilitation plans is intended to help financial statement users assess the risks the employer faces."(Mercer LLC)

Businesses and Unions Planning to Meet on Possible $3 Trillion Pension Disaster
Excerpt:"Labor groups will be invited to the U.S. Chamber of Commerce to talk about an alarming shortfall in state employee pension plans that some believe could lead to a new government bailout."(Capitol Hill Publishing Corp.)

[Opinion] Casey-Pomeroy Bill Would Bail Out PBGC, Union Pensions
Excerpt:"How much money potentially is involved? The Moody's study indicated that some 1,500 multiemployer plans, many of them representing unionized firms, were $165 billion short."(National Legal and Policy Center)

[Guidance Overview] New Law Provides Funding Relief for Multiemployer Defined Benefit Plans (PDF)
3 pages. (Prudential Retirement)

[Guidance Overview] Hodgson Russ LLP - Employee Benefits Developments August 2010
Nice summaries of important recent ERISA cases. (Hodgson Russ)

Comment Period Extended on FASB Proposal Affecting Multiemployer Plan Withdrawal Liability Disclosure
Excerpt:"For employers contributing to multiemployer pension plans, the proposal would require disclosure of potential liability on withdrawing from such plans ? even if withdrawing is only a remote possibility ? if that liability would severely impact the employer."(Mercer LLC)

[Opinion] Letters to the Editor: Let Congress Fix the Multi-Employer Pensions It Broke
Excerpt:"Your editorial'The Next Pension Bailout'(Aug. 16) ignores the real issue: equity and fairness for small employers. Sen. Robert Casey's bill is not a bailout, it simply addresses a problem Congress created."(The Wall Street Journal)

PBGC Data Book Expands Coverage on Growing Multiemployer Liability
Excerpt:"The PBGC report notes that the multiemployer program has a smaller scope (it insures only 1,500 plans, about one-twentieth as many as the 27,600-plan single-employer program), and it covers only about one-third as many participants (10.4 million versus 33.6 million). However, insured multiemployer plans are about six times as large, on average, as insured single employer plans."(PLANSPONSOR.com)

Text of Pension Insurance Data Book 2009 (PDF)
120 pages. Excerpt:"The new edition features a detailed article on the smaller of the agency's two pension insurance programs, which provides financial assistance to insolvent multiemployer pension plans."(Pension Benefit Guaranty Corporation)

The Next Pension Crisis: Taft-Hartley Multiemployer Plans
Excerpt:"[A post by'The Lid'on the underfunding of multiemployer pension plans includes the following:]'Many multi-employer plans are struggling after years of financial hits especially after the last recession. Along with the value of the plans going down, as the boomer generation is reaching retirement age, every year the number of people tapping those retirement funds hits a new record.'"(Workplace Prof Blog)

FASB Extends Comment Period on Loss Contingencies Exposure Draft which Includes Employer Reporting for Multiemployer Withdrawal Liability
Excerpt:"The proposed amendments would lower and broaden the current disclosure threshold. Current U.S. GAAP requirements would be enhanced with additional information required. Included in the subtopics to be amended is multiemployer plan withdrawal liability disclosure information."(International Foundation of Employee Benefit Plans)

[Guidance Overview] Ohio District Court Rejects Negligence and ERISA Claims Against Milliman (PDF)
2 pages. Excerpt:"[T]he Court concluded that the actuarial services Milliman provided to the Excavating, Building Material and Construction Drivers Union Local No. 436 Pension Fund did not violate professional standards, the parties'contract or ERISA."(Groom Law Group)

[Opinion] Opinion: Union Plans Want to Be Next Pension Bailout
Excerpt:"Big Labor is going Code Red on the issue, in the face of a looming accounting change that would force companies to confront the Ponzi-style nature of multi-employer pension plans."(Wall Street Journal)

FASB Proposal May Expand Disclosure About Multiemployer Pension Withdrawal Liability
Excerpt:"A new FASB proposal could require employers contributing to multiemployer pension plans to disclose information about their potential liability on withdrawing from the plan -- even if the possibility of withdrawal is remote -- if that liability would severely impact the employer."(Mercer LLC)

Revisions to Form LM-30 Proposed and Open for Public Comments
Excerpt:"The proposed rule would revise the Form LM-30 based on an examination of revisions made in the Form LM-30 Final Rule published on July 2, 2007."(International Foundation of Employee Benefit Plans)

[Guidance Overview] Handout for Upcoming IRS Phone Forum: Abusive Tax Avoidance Transactions and Emerging Issues
Excerpt:"The Forum will focus on potential abusive schemes and new emerging issues including insurance funded plans, schemes involving defined benefit pension plans, S Corporation ESOP abuses, ROBS compliance issues, reversion and distribution schemes, management company promotions, abuses involving union plans and other issues of concern."(Internal Revenue Service)

[Guidance Overview] Unreimbursed Multiemployer Plan Expenses Paid by Contributing Employer and Schedule C of Form 5500
Excerpt:"The instructions to the Schedule C . . . specifically exclude certain payments, such as certain compensation paid by the plan sponsor to its employees (for services to the plan) and other plan expenses paid by the plan sponsor, if such payments are not reimbursed by the plan."(Wolters Kluwer)

FASB Proposed Amendment of Employer Reporting of Loss Contingencies Includes Multiemployer Withdrawal Liability; Comments Accepted Until August 20
Excerpt:"The proposed amendments would lower and broaden the current disclosure threshold. Current U.S. GAAP requirements would be enhanced with additional information required. Included in the subtopics to be amended is multiemployer plan withdrawal liability disclosure information."(International Foundation of Employee Benefit Plans)

Fees Paid by Bargaining Parties Not Shown on Multiemployer Plans'5500 Schedule C
Excerpt:"Service provider fees are not reported on a multiemployer plan's Form 5500 Schedule C if paid by contributing employers, employer associations or participating unions and not reimbursed from plan assets, according to an information letter issued by [DOL]."(Mercer LLC)

[Official Guidance] Text of IRS Notice 2010-56: Special Funding Rules for Multiemployer Plans under PRA 2010 (PDF)
3 pages. Excerpt:"This notice provides guidance on the availability of special funding rules for multiemployer defined benefit plans under ? 431(b)(8) of [Code], as added by . . . the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010 . . . for a plan year for which the Form 5500 (and Schedule MB) has been filed. This notice also describes anticipated future guidance that will apply for sponsors of multiemployer defined benefit pension plans with respect to the special funding rules under ? 431(b)(8)."(Internal Revenue Service)

[Guidance Overview] Simplified Method for Multiemployer Defined Benefit Plans to Disregard Benefit Reductions in Calculating Withdrawal Liability
Excerpt:"Under the simplified method, the amount of unfunded vested benefits allocable to an employer that withdraws after the last day of the plan year in which the benefit reduction occurred is equal to the sum of (1) the amount determined in accordance with ERISA ?4211 under the method in use by the plan and (2) theemployer's proportional share, determined as of the end of the plan year prior to withdrawal, of the unamortized balance of the value of the reduced nonforfeitable benefits (i.e., affected benefits)."(Wolters Kluwer)

FASB&IASB Propose Increased Disclosure of Multiemployer Funding Liability
Excerpt:"In order to protect the interests of multiemployer plans and their sponsoring organizations, we are forming a group of employer associations, employers, unions, industry associations, and other interested stakeholders on whose behalf we will submit comments to the FASB, IASB, and other appropriate parties."(Groom Law Group)

Health Care Reform and Collective Bargaining Issues (PDF)
29 pages. The presentation includes a checklist on Preparing for Collective Bargaining Negotiations. (Morgan, Lewis&Bockius LLP)

[Official Guidance] Text of EBSA Information Letter of July 12, 2010, on Reporting of Certain Employer Paid Plan Expenses on Schedule C
Excerpt:"[DOL was asked w]hether, in the context of a collectively bargained multiemployer plan, plan expenses paid by a contributing employer and not reimbursed by the plan are required to be reported on the Schedule C (Service Provider Information) of the Form 5500 Annual Return/Report of Employee Benefit Plan . . . ."(U.S. Employee Benefits Security Administration)

Multiemployer Plan Trustees Conflicted When Deciding Claims, Appeals Court Rules
Excerpt:"Giving weight to this conflict -- applying the Supreme Court's analysis in Glenn -- the appeals court found the trustees abused their discretion in denying disability benefits. The court rejected a 2009 Ninth Circuit finding that Taft-Hartley trustees have no conflict because both employers and unions are at the table . . . ."(Mercer LLC)

U.S. Supreme Court to Consider Remedy for Deficient SPD
Excerpt:"To recover benefits based on an inconsistency between an ERISA plan document and summary plan description (SPD), must participants show reliance on the SPD? Is it sufficient to show'likely harm'? Or can participants prevail without any showing of harm? The US Supreme Court will tackle these questions . . . ."(Mercer)

[Guidance Overview] Pension Funding Relief Enacted for Multiemployer Funds (PDF)
Excerpt:"Multiemployer plans that meet the ???solvency test??? . . . may elect to treat the portion of any experience gain or loss attributable to'net investment losses'incurred in either or both of the first two plan years ending after August 31, 2008 as an item separate from other experience losses, to be amortized in equal annual installments over the period . . . ."(Buck Consultants)

[Guidance Overview] Second Circuit Holds Taft-Hartley Funds Are Inherently Conflicted
Excerpt:"On June 24, 2010, the U.S. Court of Appeals for the Second Circuit held, in Durakovic v. Building Service 32 BJ Pension Fund, . . . that Taft-Hartley funds (administered by boards of trustees consisting of an equal number of union and employer representatives) are inherently conflicted when making benefit determinations, and that this conflict needs to be considered by federal district courts when reviewing plan determinations under an arbitrary and capricious standard of review."(Proskauer Rose LLP)

[Guidance Overview] Pension Relief Act Extends Amortization Periods for Single and Multiemployer Plan Funding (PDF)
2 pages. Excerpt:"The plan sponsor of a participating multiemployer plan that elects this relief is required to notify participants, beneficiaries, and the PBGC of its election to use the relief provisions."(Groom Law Group)

[Guidance Overview] PBGC Provides Multiemployer DB Plans with Reporting Relief for Completing Form 5500 Schedule R
Excerpt:"The PBGC also provides an alternative method of compliance. Under the alternative, a plan may make a partial report of the information required on Line 14 by reporting the number of employers that withdrew from the plan beginning in the 1998 plan year through the end of the plan year preceding the relevant plan year (2009, 2008, or 2007), and the number of participants for whom these employers made contributions to the plan."(Wolters Kluwer)

[Guidance Overview] No Collective Bargaining Exception Under Health Care Reform
Excerpt:"In general, when federal legislation requires that significant changes be made to employee benefit plans, the question arises whether to require that such changes be made to collectively bargained plans during the term of the existing CBA that provides for such benefits, or to delay the requirement to make such changes until the next time benefits are negotiated in conjunction with a successor CBA."(Jones Day)

[Guidance Overview] PBGC's Guidance on PPA Multiemployer Plan Reporting Requirements for'Orphaned'Participants (PDF)
Excerpt:"The PBGC has issued Technical Update 10-1 to help multiemployer pension plans report information on Form 5500 under disclosure rules expanded by the Pension Protection Act of 2006 (PPA) with respect to participants for whom employers are no longer making contributions."(Buck Consultants)

PBGC Divides Chicago Trucker Pension Plan to Extend Its Solvency
Excerpt:"The Pension Benefit Guaranty Corporation (PBGC) on May 26 announced that the Chicago Truck Drivers, Helpers&Warehouse Workers Union (Independent) Pension Fund, a multiemployer pension plan based in Chicago, Ill., has been divided into two separate plans[, effective July 1, to extend solvency and to preserve] full benefits for about 3,700 workers and retirees of non-bankrupt trucking firms that contribute to the plan."(Wolters Kluwer)

[Official Guidance] Text of Technical Update 10-1: Multiemployer Plans - Clarification of Schedule R (Form 5500) Instructions and Partial Reporting Relief for 2009
Excerpt:"This Technical Update clarifies the Line 14 Instructions for the Schedule R (Form 5500) and provides partial reporting relief for completing Line 14 for the 2009 plan year."(Pension Benefit Guaranty Corporation)

[Guidance Overview] Multiemployer Pension Plan Withdrawal Liability (PDF)
6 pages. Excerpt:"[This newsletter] notes a few technical changes to the withdrawal liability rules made by the Pension Protection Act of 2006."(The Segal Group, Inc.)

Full Committee Hearing: Building a Secure Future for Multiemployer Pension Plans
Testimony of each witness is available to download on the target page: Phyllis C. Borzi, Assistant Secretary of Labor, Employee Benefits Security Administration; Charles A. Jeszeck, Acting Director, Education, Workforce, and Income Security, U.S. Government Accountability Office; Randy DeFrehn, Executive Director, Coordinating Committee for Multiemployer Plans; John McGowan, Professor of Accounting, St. Louis University; Norman Stein, Douglas Arant Professor of Law, University of Alabama School of Law. (U.S. Senate Committee on Health, Education, Labor and Pensions)

[Guidance Overview] Multiemployer Review, May 2010: Update on Issues Affecting Taft-Hartley Plans (PDF)
6 pages. (Milliman)

Congress Weighs Bailout for Multiemployer Pension Plans
Excerpt:"The Moody's study estimated that multiemployer plans in the construction industry are only about 60% funded . . . . In the transportation industry, including many Teamsters plans, the overall funded status was 58.6%."(Wall Street Journal)

[Opinion] Statement of Law Prof. Norman Stein at Multiemployer Pension Plans Funding Hearing in Senate Committee (PDF)
Excerpt:"By taking on some liability now, the PBGC will avoid taking on much larger liabilities later and will improve the future viability of troubled but critically important industries, such as trucking and mining."(Prof. Norman Stein via Pension Rights Center)

Multiemployer Plan Relief Bill Subject of Senate Hearing
Excerpt:"The controversial portion of the [bill] would allow multiemployer plans to segregate the benefit liabilities attributable to participants of bankrupt former employers who pull out of the program without funding their withdrawal liability."(PLANSPONSOR)

Multiemployer Plan Relief Bill Subject of Senate Hearing
Excerpt:"A U.S. Senate committee was scheduled Thursday to hold a hearing about a controversial multiemployer plan funding bill, which critics charge will improperly leave taxpayers paying for pension benefits from bankrupt companies."(PLANSPONSOR.com)

GAO Testimony: Long-Standing Challenges Remain for Multiemployer Pension Plans (PDF)
Excerpt:"The [Committee on Health, Education, Labor and Pensions, U.S. Senate] asked GAO to provide information on (1) the unique characteristics of multiemployer plans and (2) the challenges that multiemployer plans face and how they may affect PBGC.'(U.S. Government Accountability Office)

Taxpayers Could Be on the Hook for $165 Billion If Bill to Bail Out Private Union Pension Funds Makes It Through Congress
Excerpt:"The bill, which would put the Pension Benefit Guarantee Corporation behind struggling pensions for union workers, is being introduced by Senator Bob Casey, (D-Pa.), who says it will save jobs and help people."(FOX News Network, LLC)

Disclosure of Participation in Multiemployer Pension Plans on Financial Statements
Excerpt:"The FASB board had directed the staff to begin drafting a proposed Accounting Standards Update. The staff expects to issue the proposed Update in the second quarter of 2010 and a final Update early in the fourth quarter of 2010. This will leave little time for employers to transition to the new rules when they are finalized. Therefore, an employer that participates in one or more multiemployer plans should start to gather the multiemployer plan information it may need to disclose on its 2010 year-end financial statements."(Dorsey&Whitney LLP)

International Accounting Standards Board Proposes Substantial Changes in Disclosures for Employers Contributing to Multiemployer Plans
Excerpt:"Looking even further down the road, all U.S. employers contributing to multiemployer plans might be interested because it is possible that these changes in international accounting standards foretell future changes in U.S. standards for domestic employers."(The Segal Group, Inc.)

FASB Begins Project on Disclosures of Employer Involvement in Multiemployer Plans
Excerpt:"According to the FASB, the objective of this project is to enhance the disclosure requirements about an employer's participation in a multiemployer plan under FASB Accounting Standards Codification Subtopic 715-80 (originally issued as FASB Statements No. 87, Employer's Accounting for Pensions, No. 106, Employers'Accounting for Postretirement Benefits Other Than Pensions, and No. 132 (revised 2003), Employers'Disclosures about Pensions and Other Postretirement Benefits)."(Wolters Kluwer)

Results of the 2009 Survey of the Funded Status of Multiemployer Defined Benefit Plans (PDF)
30 pages. Excerpt:"'The survey covered areas such as the assets, liabilities, participants, investments, and contributions to these plans both before and after the 2008 market crash. The purpose of this survey was to assess the impact of the market contraction and gather informationthat would be helpful to members of the multiemployer community, lawmakers, federal regulators, and the public . . . ."(National Coordinating Committee for Multiemployer Plans)

[Guidance Overview] DOL's Additional Guidance for Multiemployer Retirement Plans (PDF)
4 pages. Excerpt:"The guidance regarding disclosure requirements applies to qualified defined benefit and defined contribution multiemployer plans. The final civil penalty regulations apply to sponsors of multiemployer defined benefit pension plans in endangered status or critical status that fail to adopt a funding improvement plan or rehabilitation plan as required by the Pension Protection Act of 2006."(Prudential Retirement)

Value of Assets in Multiemployer Plans Dropped an Average of 22.1% from the Beginning of 2008 to 2009
Excerpt:"In a report on its survey and a news release announcing the findings, The National Coordinating Committee for Multiemployer Plans (TNCCMP) argued that its members had suffered every bit as much as other pension programs from the economic downturn and need Congressional funding relief as much as other pension plans."(PLANSPONSOR.com)

[Opinion] American Academy of Actuaries Comments on H.R. 4213, the American Workers, State and Business Relief Act of 2010 (PDF)
6 pages. Excerpt:"The Pension Committee and the Multiemployer Subcommittee comment on multiemployer pension plan provisions . . . . To the extent that these or similar multiemployer provisions of your amendment will be included in a future bill, we are concerned that certain aspects could be misinterpreted as currently written and offer suggestions as to how they might be clarified."(American Academy of Actuaries)

Spring 2010 Report of Results from the Survey of Calendar-Year Plans'2010 Zone Status (PDF)
4 pages. Excerpt:"The survey is based on actual certifications for about 230 calendar-year multiemployer plans . . . . The certifications took into account any changes in plan design, employment outlook, negotiated contribution rates and investment performance through the end of 2009."(The Segal Group, Inc.)

PBGC's 2009 Annual Report (PDF)
83 pages. Excerpt:"PBGC's financial condition declined by $10.8 billion,due largely to an increase in plan terminations and an unfavorable change in interest factors used to value PBGC's liabilities. The Corporation reported a year-end deficit of $21.9 billion, as compared with the $11.2 billion deficit reported at the close of FY 2008."(Pension Benefit Guaranty Corporation)

[Guidance Overview] Employee Benefits Developments April 2010
Articles include Department of Labor Issues More Guidance and Relief for 403(b) Plans; COBRA Subsidy Extended Through May 31, 2010; DOL Issues Model CHIP Notice; DOL Issues Final Rule on Underfunded Multiemployer Pension Plans; Change in Retiree Medical Benefits Does Not Violate ERISA; Retention of Corporate Limited Liability. (HodgsonRuss)

Career Advice for the New(er) ERISA Lawyer
Excerpt:"Here are some tips: . . . Stay Current . . . Network . . . Master a Hot Topic . . . Never publish anything only once . . . Invite yourself to the party . . . Get a Life."(BNA Pension and Benefits Blog)

FASB Proposal Regarding Multiemployer Defined Benefit Plans
Excerpt:"On April 14, 2010, the Financial Accounting Standards Board (FASB), which has authority to modify GAAP, had a public meeting at which it tentatively decided to require employers contributing to multiemployer defined benefit pension plans to disclose in their notes to their financial statements further quantitative and qualitative information about their participation in such plans."(Proskauer Rose)

[Guidance Overview] Final Rules for Disclosure of Multiemployer Actuarial and Financial Reports
Excerpt:"[T]he rules took effect April 1, 2010. . . . Multiemployer plan administrators and legal counsel that have not already done so should review or set up systems to meet these document requests."(Segal)

Employee Plans Examination Director Discusses Multiemployer Plan Funding Compliance Issues
Excerpt:"The proverbial'perfect storm'occurred with the timing of multiemployer plan funding requirements of the Pension Protection Act of 2006 (PPA; P.L. 109-280) and the financial collapse in the past 18 months, said Monika Templeman, Director of Employee Plans (EP) Examinations in the Spring issue of the IRS Employee Plans News. The unfortunate timing makes the new funding rules appear draconian, she said, but added that'of course, that was never the purpose.'The new funding rules, she said, were designed to improve the funded status of these plans to protect the plans, the participants and the employers from the consequences associated with funding deficiencies."(Wolters Kluwer)

FASB Begins Work to Add New Disclosures About Multiemployer Retirement Plans
Excerpt:"New financial statement disclosures about employers'participation in multiemployer pension and retiree medical plans began taking shape at FASB's April 14 meeting. New disclosures may include plan identity and funded status, the extent of the employer's participation, budgeted contributions and potential withdrawal liability. FASB might also require narratives on future contribution trends, the employer's influence on the plan's financial decisions and risks from other employers withdrawing from the plans."(Mercer LLC)

Recent Developments in Employee Benefits and Executive Compensation, April 2010
The newsletter describes recent developments on DOL's Proposal for Rules Effecting 401(k) Plan Investment Advice, Deadline to Adopt Restated Retirement Plan Documents, DOL's Final Regulations Governing Requirement that Multiemployer Pension Plans Furnish Information Upon Request, and the New Self-Reporting Requirements and Taxes for Failure to Satisfy COBRA and Other Federal Group Health Plan Mandates. (Blank Rome LLP)

[Guidance Overview] The National Health Care Reform Law's Key Provisions for Multiemployer Plans (PDF)
4 pages. Excerpt:"This Bulletin contains a brief summary of the PPACA's key provisions as amended by the HCERA (for ease of reference, both are referred to as the'Act'or the'law'), divided into five sections: Provisions Effective in 2010/2011 for Existing Group Health Plans; Provisions First Effective After 2011 for Existing Group Health Plans; Provisions of Interest to Retiree Health Plan Sponsors; Short-Term Health Reforms; Long-Term Health Reforms. The Bulletin includes two sidebars:'Health Insurance Reforms Not Applicable to Existing Group Health Plans'and'Miscellaneous Tax Changes.'"(The Segal Group, Inc.)