The Pension Benefit Guaranty Corporation (PBGC), a federal government agency, is proposing a rule to facilitate mergers of multiemployer pension plans. Mergers are a way some plans can preserve and protect the benefits earned by workers and retirees.
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The proposed rule was published in the Federal Register on Monday, June 6. It implements changes under the Multiemployer Pension Reform Act of 2014 (MPRA). PBGC has authority to facilitate plan mergers by providing technical assistance, or financial assistance, if necessary, to prevent plan insolvency.
"Plan mergers can make multiemployer pensions more stable and secure," says PBGC Director Tom Reeder, quoted in a press release. "PBGC can help save troubled multiemployer plans before they fail. That helps plan participants and reduces the long-term costs of the pension insurance program." Mergers can stabilize or increase the base of contributing employers, combine plan assets for more efficient investing, and reduce plan administrative costs.
Most multiemployer plans are not in danger of running out of money, the PBGC says. But the agency notes that more than 10% of all participants in multiemployer plans—over a million people—are covered by troubled plans that are projected to run out of money.