DOL Says Status of 235 Multi-Employer Plans Is ‘Critical’ or ‘Endangered’
The Department of Labor
(DOL) has placed 150 multi-employer pension funds in critical status, and another 85 on the list of plans it calls endangered.
According to the DOL:
- to be in critical condition, a plan has to have so few assets that it cannot meet 65% of its future obligations; and
- to be endangered, a plan must lack the assets it needs to meet at least 80% of those future obligations.
If a multi-employer pension plan is determined to fall into either category, federal law requires the plan to notify participants, beneficiaries, bargaining parties to a union agreement, the Pension Benefit Guaranty Corporation and the DOL. This requirement applies when a plan has funding or liquidity problems, or both. Pension plans in either category must adopt a plan to restore the plan to financial health. If a plan is in critical, it may reduce adjustable benefits and cannot make any lump sum distributions.
Being listed and being able to reduce some benefits do not necessarily spell a quick change in a plan’s circumstances and status. According to the Washington Examiner, the DOL has considered the Indiana State Council of Carpenters Pension Plan to be in critical condition for four years now, and the Central New York Laborers Pension Fund for five years.