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.

 

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 a study of multiemployer pension plan benefit and contribution levels from the 1970s to today.

The purpose of the study is to educate policy makers about the significant actions that plans have taken to increase contributions, decrease benefits, or both, and to highlight the fact that current active participants are bearing the burden of these changes.

Maintaining active participation is crucial to the survival of multiemployer plans, and policy reforms that place additional, undue, burden on current active participants may further erode the system and diminish benefit security for current inactive vested participants, retirees, and beneficiaries.

The study uses a random sample of seven United Association Pension Plans to show that contribution rates have increased significantly over time while the value of the benefits provided has decreased over time.  These changes have disproportionately affected current active participants, and policy makers should be mindful of these inequities when considering potential multiemployer pension reform legislation.
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The report can be viewed below.

 ​The Joint Select Committee on Solvency of Multiemployer Plans (the “Committee”) was formed in Congress in February 2018 to address the issues facing multiemployer plans today. The Committee is comprised of eight members each from the House and the Senate, has equal representation from Democrats and Republicans, and is slated to propose legislation by November 30, 2018.
 
While the looming insolvencies of plans in critical & declining status and the Pension Benefit Guaranty Corporation (PBGC) have received most of the headlines, the Committee is also considering measures that would impact all plans – even healthy plans in the green zone. 
 
One of the measures under consideration is to mandate the use of discount rates based on corporate bond or treasury yields for minimum funding purposes. In our view, such a measure would dramatically overstate pension costs and is not in any way appropriate for multiemployer pension plan funding. 
 
In order to educate lawmakers on the devastating consequences this action would have for nearly all multiemployer plans, we prepared the following report and handout.

​As detailed in the report, the use of alternative discount rates would drastically increase unfunded liabilities, contribution requirements, and contribution volatility. The impact would be significant, and would likely lead to further destabilization of the entire multiemployer system.
 
Please contact your Horizon Actuarial consultant for more information on the report, the Committee, or how this may affect your pension fund.

Combination will build stronger presence throughout the United States
 
Horizon Actuarial Services, LLC (Horizon Actuarial) today announced it is combining with Crews MacQuarrie & Associates, Inc. (CMA). Both firms provide actuarial and consulting services to multiemployer plans.
 
The transaction is scheduled to close on July 1, 2018, at which time the shareholders and other professionals of CMA will officially become part of Horizon Actuarial. The combined firm will be called Horizon Actuarial Services, LLC. 

Horizon Actuarial will now have outstanding depth of actuarial and consulting resources for both pension and health and welfare plans on both the east and west coasts, serving clients throughout the U.S.
 
“Both firms have a stellar reputation for providing outstanding service,” said Stan Goldfarb, Managing Consultant, Actuary, and co-founder of Horizon Actuarial. “This combination is a very good match. It will help strengthen the services we deliver to our clients and give both firms expanded reach in new geographic areas.”
 
The combination adds three offices and represents approximately a 20% increase in associates for Horizon Actuarial. Both firms have strong reputations in the multiemployer community of high quality work and exceptionally talented teams of associates.
 
The principals of CMA approached Horizon Actuarial three years ago about the potential for a combination. “We believed then, as we do now, that this combination is in the best interest of our valued employees and the clients we serve,” said Gerry Crews, Principal of CMA. “We never considered any firm other than Horizon Actuarial because of its reputation and our solid belief that both firms possess an uncompromising commitment to our associates and our clients.”
 
About Horizon Actuarial Services
Horizon Actuarial Services, LLC is a leading consulting firm that specializes in providing innovative solutions to multiemployer benefit plans. The firm proudly serves pension and health and welfare plans in various industries, including construction, trucking, professional sports, hospitality, entertainment, retail food, and communication.
 
Horizon Actuarial was created in October of 2007, when Watson Wyatt Worldwide, a leading multinational consulting firm, announced that it was exiting the multiemployer and Taft-Hartley plan consulting business. Watson Wyatt spun off its multiemployer business to a new company – Horizon Actuarial Services, LLC. Three Watson Wyatt pension actuaries, Stan Goldfarb, Larry Weitzner, and Cary Franklin, were the founding owners of the new firm. The firm’s three principal offices are in Atlanta, Los Angeles, and Washington, D.C.
 
About Crews MacQuarrie & Associates
Crews MacQuarrie & Associates, Inc. provides consulting and actuarial services to multiemployer benefit plans in the retail food, wholesale food, commercial real estate, hotel, gaming, technology, and soft drink industries.
 
Headquartered in Irvine, California, Crews MacQuarrie & Associates (CMA) was formed in 2002 by consultant Gerald Crews and consulting actuary Wade MacQuarrie.
 
Contact: Mark Lewis, COO/CFO | Horizon Actuarial | 678.317.4126 | mark.lewis@horizonactuarial.com