On March 11, 2021, President Biden signed the American Rescue Plan Act of 2021 (ARPA) into law. The key provisions for multiemployer pension plans are outlined here and summarized in more detail in the link below. In addition, Horizon Actuarial co-sponsored a webinar with Groom Law Group, NCCMP, and Segal Consulting to discuss the relief measures on Tuesday, March 23rd at 12:00PM EDT. Click here to view a recording of the webinar.
A more detailed summary can be viewed at the link below. Please contact your Horizon Actuarial consultant or use the "contact us" page if you have any questions.
Horizon Actuarial Services has once again partnered with the International Foundation of Employee Benefits Plans to conduct a study of U.S. multiemployer health plans. The study covers multiemployer health plans in all industries and the plans in the study have more than five million covered participants.
The full report – The Multiemployer Health Plan Landscape: A Ten-Year Look (2008-2017) – is available at the International Foundation’s website (link below). The report provides a look at historical trends for U.S. multiemployer health plans for the ten-year period from 2008 to 2017. It will help plan trustees, professional service providers, and policymakers gain a better understanding of these plans and their environment. The report may also serve as a useful comparison tool, enabling trustees and advisors to understand how their plans compare with others with respect to demographics, benefit costs, income, cash flows, and more. Selected highlights from the report are as follows:
This is the fourth edition of the report. Please contact your Horizon Actuarial consultant if you have any questions. At Horizon Actuarial, we are retirement and healthcare actuaries, not investment professionals. Therefore, when developing assumptions as to what returns a pension plan’s assets might be expected to earn in the future, we seek input from our colleagues in the investment advisory community. Each year, we survey different investment advisors and ask them to provide their “capital market assumptions” – their expectations for future risk and returns for different asset classes in which pension funds commonly invest. The information gathered from this survey can help answer the commonly-asked question: “Are my plan’s investment return assumptions reasonable?” Of course, there are many factors to consider when evaluating a plan’s investment return assumptions, such as its asset allocation, the maturity of its participant population, and the purpose of the measurement. Any of these factors can make the expected return for one plan very different from others. Therefore, this report does not opine on the reasonableness of any one plan’s investment return assumptions. Nevertheless, we hope this report will be a useful resource for trustees, actuaries, and investment professionals alike. Horizon Actuarial sincerely thanks the 39 investment advisors who participated in the 2020 edition of this survey. The report on the results of the 2020 Survey can be viewed below. This is the ninth edition of the survey for which we have published a report. Prior editions can be found below:
Horizon Actuarial Services has partnered with the International Foundation of Employee Benefits Plans to conduct a study of U.S. multiemployer defined benefit pension plans. The study covers multiemployer plans in all industries, building upon the similar study of construction industry plans that Horizon Actuarial originally conducted with the Mechanical Contractors Association of America (MCAA) in 2012.
The report – The Multiemployer Retirement Plan Landscape: A Fifteen-Year Look (2003-2017) – is available at the International Foundation’s website (link below). The report provides a look at historical trends for U.S. multiemployer retirement plans for the fifteen-year period from 2003 to 2017. It will help plan trustees, professional service providers, and policymakers gain a better understanding of these plans and their environment. The report may also serve as a useful comparison tool, enabling trustees and advisors to understand how their plans compare with others with respect to demographics, cash flows, investments, and funding. This is the sixth edition of the report to include information on multiemployer defined contribution (DC) retirement plans, as well as multiemployer defined benefit (DB) pension plans. Please contact your Horizon Actuarial consultant if you have any questions. On May 12, 2020, House Democrats introduced the “Health and Economic Recovery Omnibus Emergency Solutions Act” (HEROES Act) to address the ongoing health and economic crises brought on by the COVID-19 pandemic. The broad reaching stimulus package provides funding for a wide range of groups, and includes significant relief provisions for multiemployer pension plans. The provisions that would apply to multiemployer pension plans are summarized below.
HORIZON ACTUARIAL COMMENTARY: The bill provides significant relief for multiemployer plans and goes a long way towards securing the retirement benefits for millions of hard working men and women and their families. Absent relief similar to that provided in the HEROES Act, a few large multiemployer plans would fail. The failure of these plans would cause the PBGC to become insolvent (currently projected in 2025), and would result in participants receiving pennies on the dollar of their promised benefits. The ultimate outcome would be an increased reliance on social safety nets, significant employer failures, and a potential cascade of negative effects for the multiemployer system and broader economy. Importantly, the bill does not include any PBGC premium increases and does not limit the actuarial discount rate assumption, both of which would be counterproductive to the goal of securing worker benefits and providing meaningful retirement income to the more than 10 million participants and beneficiaries in the multiemployer system. While not everyone will agree with all provisions of the bill, it provides necessary relief at a critical juncture for all multiemployer pension plans. Please contact your Horizon Actuarial consultant or use the "contact us" page if you have any questions. The United Association of Journeymen and Apprentices of the Plumbing, Pipefitting and Sprinkler Fitting Industry of the United States and Canada (United Association), Mechanical Contractors Association of America, Inc. (MCAA), and Horizon Actuarial Services, LLC have partnered to conduct an analysis of the multiemployer pension reform proposal released by Senators Charles E. Grassley (R-IA) and Lamar Alexander (R-TN) on November 20, 2019. This analysis focuses on two key changes in the proposal – increases in PBGC premiums and limitations on discount rates, and their implications for UA multiemployer plans. Each of the proposed changes would significantly increase contribution requirements. The report also opines on the proposed changes to the calculation of employer withdrawal liability. The report can be viewed below. Please contact your Horizon Actuarial consultant if you have questions about the report or how the proposal might impact your plan. On November 20, 2019, Senators Charles E. Grassley (R-IA) and Lamar Alexander (R-TN) released a proposal to address the immediate financial challenges faced by a subset of multiemployer pension plans and also to secure the multiemployer pension system over the long term — the “Multiemployer Pension Recapitalization and Reform Plan.” The proposal generally follows the outline of the reform principles considered by the Joint Select Committee in November, 2018. While the proposal does provide significant relief for some of the most troubled multiemployer plans via enhanced liability partitions to the PBGC and increases in PBGC guaranteed benefits, it also imposes strict funding standards that would be harmful for participants and employers in the majority of plans that are likely to remain healthy under current law. Our high-level summary of the proposal is linked below. Please contact your Horizon Actuarial consultant for more details including an analysis of how the proposal could affect your plan. Horizon Actuarial Services has once again partnered with the International Foundation of Employee Benefits Plans to conduct a study of U.S. multiemployer health plans. The study covers multiemployer health plans in all industries and the plans in the study have more than five million covered participants.
The full report – The Multiemployer Health Plan Landscape: A Ten-Year Look (2007-2016) – is available at the International Foundation’s website (link below). The report provides a look at historical trends for U.S. multiemployer health plans for the ten-year period from 2007 to 2016. It will help plan trustees, professional service providers, and policymakers gain a better understanding of these plans and their environment. The report may also serve as a useful comparison tool, enabling trustees and advisors to understand how their plans compare with others with respect to demographics, benefit costs, income, cash flows, and more. Selected highlights from the report are as follows:
This is the third edition of the report. Please contact your Horizon Actuarial consultant if you have any questions. At Horizon Actuarial, we are retirement and healthcare actuaries, not investment professionals. Therefore, when developing assumptions as to what returns a pension plan’s assets might be expected to earn in the future, we seek input from our colleagues in the investment advisory community. Each year, we survey different investment advisors and ask them to provide their “capital market assumptions” – their expectations for future risk and returns for different asset classes in which pension funds commonly invest. The information gathered from this survey can help answer the commonly-asked question: “Are my plan’s investment return assumptions reasonable?” Of course, there are many factors to consider when evaluating a plan’s investment return assumptions, such as its asset allocation, the maturity of its participant population, and the purpose of the measurement. Any of these factors can make the expected return for one plan very different from others. Therefore, this report does not opine on the reasonableness of any one plan’s investment return assumptions. Nevertheless, we hope this report will be a useful resource for trustees, actuaries, and investment professionals alike. Horizon Actuarial sincerely thanks the 34 investment advisors who participated in the 2019 edition of this survey. The report on the results of the 2019 Survey can be viewed below. This is the eighth edition of the survey for which we have published a report. Prior editions can be found below: |
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