Congressman Earl Pomeroy (D-ND) released draft legislation that he intends to introduce next month to “help defined benefit pension plans weather the historic economic downturn.” This follows draft funding proposals that he released in June for discussion.
Pomeroy’s website contains the full text of the draft legislation along with a section-by-section summary. The provisions on multiemployer plans are in “Title II,” which begins on page 69 of the draft bill. Sections 201 and 202 of the draft bill address PPA funding rules for multiemployer plans.
The draft bill includes many provisions to ease funding requirements for multiemployer plans, for example, by extending remedial periods (for plans in endangered status or critical status) by 5 years, allowing for longer amortization periods in the funding standard account, and extending the “corridor” for asset smoothing. If passed, these provisions will allow a plan in endangered or critical status more time to improve or rehabilitate its funded status. The provisions may also serve to help some plans remain in the so-called “green zone.”
The draft bill provides special relief for troubled multiemployer plans meeting certain criteria. Included is a provision allowing for the “partitioning” of benefit liabilities associated with employers that have previously withdrawn from the plan, with partitioned liabilities being assumed by the Pension Benefit Guaranty Corporation (PBGC). Also included is a provision allowing for the formation of “alliances” to gain efficiencies in administration and asset management.
The draft bill also contains a provision that would increase the maximum level of benefits for multiemployer plans guaranteed by the PBGC.
Pomeroy’s website contains the full text of the draft legislation along with a section-by-section summary. The provisions on multiemployer plans are in “Title II,” which begins on page 69 of the draft bill. Sections 201 and 202 of the draft bill address PPA funding rules for multiemployer plans.
The draft bill includes many provisions to ease funding requirements for multiemployer plans, for example, by extending remedial periods (for plans in endangered status or critical status) by 5 years, allowing for longer amortization periods in the funding standard account, and extending the “corridor” for asset smoothing. If passed, these provisions will allow a plan in endangered or critical status more time to improve or rehabilitate its funded status. The provisions may also serve to help some plans remain in the so-called “green zone.”
The draft bill provides special relief for troubled multiemployer plans meeting certain criteria. Included is a provision allowing for the “partitioning” of benefit liabilities associated with employers that have previously withdrawn from the plan, with partitioned liabilities being assumed by the Pension Benefit Guaranty Corporation (PBGC). Also included is a provision allowing for the formation of “alliances” to gain efficiencies in administration and asset management.
The draft bill also contains a provision that would increase the maximum level of benefits for multiemployer plans guaranteed by the PBGC.
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