All about risk
Excerpt:
Will this be the last filing or the first of new crop looking to position their plan for bailout money?
According to the MPRA website the Warehouse Employees Union Local No. 730 Pension Trust out of Sparks, MD filed to cut benefits.
Author(s): John Bury
Publication Date: 27 March 2021
Publication Site: Burypensions
Excerpt:
S3522, which could mean unions will need to expand their corral of bought politicians to those who would control the local part of the New Jersey Public Employee Retirement System (PERS), was introduced yesterday in the legislature apparently to the surprise of a Senate committee that rejected it, according to Politico.
Author(s): John Bury
Publication Date: 23 March 2021
Publication Site: Burypensions
Excerpt:
A scant week after the multiemployer pension bailout was enacted one large plan reversed course towards that pot of gold.
Their application withdrawal letter just popped up on the MPRA website.
Plan Name: American Federation of Musicians and Employers’ Pension Fund and Subsidiary
EIN/PN: 51-6120204/001
Total participants @ 3/31/20: 51,295 including:
Retirees: 17,116
Separated but entitled to benefits: 13,777
Still working: 20,402
Author(s): John Bury
Publication Date: 18 March 2021
Publication Site: Burypensions
Excerpt:
Going through the text of the stimulus bill, section 9706 provides Single Employer plans with another tool to reduce contributions.
Author(s): John Bury
Publication Date: 16 March 2021
Publication Site: Burypensions
Excerpt:
Going through the text of the stimulus bill, section 9705 turns to funding relief for Single Employer plans by returning to the 15 year amortization schedule for minimum funding purposes for 2022 (with optional election for 2019, 2020, and 2021) as if draconian PBGC premiums were not enough in themselves to discourage underfunding.
Author(s): John Bury
Publication Date: 16 March 2021
Publication Site: Burypensions
Graphic:
Excerpt:
Going through the text of the stimulus bill, section 9704 is the meat of the bailout but those 10 pages might be a little hard going so I have added my emphasis.
What struck me on initial reading is that there does not seem to be any cap on those one-time lump sum assistance payments and applicants may be able to value future benefits too. That is, a union with the foresight to sponsor a pension that is almost broke could entice employers to enter their union with the offer of providing their employees with a good pension at a cost that taxpayers will subsidize. Sounds too stupid to be real except if the law were entirely drafted by lawyers for the unions.
Author(s): John Bury
Publication Date: 15 March 2021
Publication Site: Burypensions
Excerpt:
Going through the text of the stimulus bill, section 9703 continues allowing those who run multiemployer plans and their actuaries to make up their own rules as long as such calculations do not overly embarrass the regulators and they do not sneak in any benefit increases.
Author(s): John Bury
Publication Date: 14 March 2021
Publication Site: burypensions
Excerpt:
Going through the text of the stimulus bill we come to section 9702 which says that for multiemployer plans self-designated as being in Critical and Endangered status, who had to come up with a plan to dig out, will have their funding improvement or rehabilitation period extended by 5 years.
I wonder if any of these funding improvement plans filed before ARPA included a line like:
Waiting for union-controlled democrats to take over the federal government so 100% of all unfunded liabilities get covered by taxpayers.
Author(s): John Bury
Publication Date: 12 March 2021
Publication Site: burypensions
Excerpt:
We start with a provision that keeps multiemployer plans who did not have the foresight to designate their plans in bad shape from rushing for the increments.
Option number one for getting the bailout money is to have a multiemployer plan in Critical and Declining status. To avoid having 1,400 plans in Critical and Declining status all at once this provision seems to freeze a plan’s status to what was claimed for the plan year that began on or after March 1, 2019.
Here is the wording. Tell me if you see anything different.
Author(s): John Bury
Publication Date: 11 March 2021
Publication Site: Burypensions
Excerpt:
According to PBGC, 61 plans filed notices for 2020 that they were in Critical and Declining status.
There have been 32 plans that filed for benefit cuts under MPRA and it may pay off for every other multiemployer plan to rustle up a submission package prior to enactment.
Then we come to other plans who might be (or could make themselves) eligible. Of 1,220 plans who filed Schedule MBs for 2018 there were:
118 in Critical and Declining status
638 with more retired than active participants
1202 with unfunded liabilities
$685 billion in net unfunded liabilities
Author(s): John Bury
Publication Date: 9 March 2021
Publication Site: Burypensions
Excerpt:
Now that multiemployer plans have their blank check what can these others expect (or demand)?
Anyone who has ever had their pension reduced by PBGC in a distress termination.
Those of us* who have lost pensions through bankruptcy or theft.
And when their time comes, this modest group.
Author(s): John Bury
Publication Date: 6 March 2021
Publication Site: Burypensions
Excerpt:
This is a good time to review who will be impacted as state pension data on active participants in the retirement system has just been updated through December, 2020. There are no dates of birth so it is impossible to get an accurate count as some of those members who have between 18 and 25 years of service may already be age 55 but here is my cost estimate anyway.
All PFRS members: 40,532 with average salary of $96,364
Already with 25 years of service: 3,252 with average salary of $143,156
18 to 25 years of service: 10,543 with average salary of $118,750
If half of those eligible decide to retiree on their 50% pension for an extra 3.5 years that would come to an extra billion dollars coming out of the retirement system which is about double what the OLS estimated as the maximum.
Author(s): John Bury
Publication Date: 2 March 2021
Publication Site: Burypensions