Multiple employer plans are sponsored by more than one employer but are not maintained as part of a collective bargaining agreement. Because of differences in the structure of the plans, single and multiemployer DB pension plans have different rules under some sections of ERISA. Multiemployer DB plans are of current concern to Congress for several reasons:
about 10% to 15% of multiemployer participants are in plans that are projected to have insufficient plan assets within the next 20 years to pay 100% of the benefits promised to plan participants; because the liabilities of the pension plans that are projected to become insolvent are so great, PBGC would likely be unable to continue to guarantee participants' benefits if one or two of these plans became insolvent; legislation enacted in December 2014 provides options to stave off insolvency for some multiemployer DB pension plans; one very large plan's application to reduce benefits to stave off insolvency was denied by the U.S. Treasury; and the Bipartisan Budget Act of 2018 ( P.L. DOL data indicate that 99.6% of all pension plans (covering 88.7% of all pension plan participants) are single-employer pension plans. Multiemployer Pension Plans

Multiemployer pension plans are sponsored by more than one employer and, unlike multiple employer plans, are maintained under collective bargaining agreements. Defined Benefit Pension Plans

Participants in DB pension plans receive monthly payments in retirement. In multiemployer DB pension plans, the payment is typically calculated as the length of service with employers that contribute to the plan multiplied by a dollar amount. Funding Levels in Multiemployer Defined Benefit Pension Plans

The funding levels of multiemployer DB pension plans are varied: some plans are well funded and have adequate funds from which to pay all of their promised benefits, and a few plans are poorly funded and may become insolvent within 10 to 20 years. 113-235 ). PBGC Multiemployer Insurance Program

PBGC is a federal government agency created by ERISA in 1974 to protect the benefits of participants in private-sector DB pension plans. In the single employer program, PBGC becomes the trustee of terminated, underfunded DB pension plans and pays benefits up to a statutory maximum amount. Rather, when a multiemployer DB pension plan becomes insolvent and is unable to pay participants their promised benefits, PBGC provides financial assistance in the form of loans made to multiemployer DB plans. Inadequacy of PBGC Premiums

Unlike the single employer insurance program, PBGC does not become trustee of insolvent multiemployer pension plans. Applications for Benefit Reductions

As of September 21, 2018, the U.S. Treasury has received 32 applications to reduce benefits under MPRA. Five applications, including the application by the Central States, Southeast and Southwest Areas Pension Plan (a very large plan with 400,000 participants), have been denied. Ten applications have been withdrawn, and seven applications have been approved. Decisions are still pending on the remaining 10 applications. 115-123 ), enacted February 9, 2018, created the Joint Select Committee on Solvency of Multiemployer Pension Plans to author a report and prepare legislative language to address the impending insolvencies of several large multiemployer defined benefit (DB) pension plans and PBGC. Report and Legislative Language

The committee must provide to Congress no later than November 30, 2018, a report and proposed legislative language to improve the solvency of multiemployer DB plans and the PBGC. The report and proposed legislative language must be approved by (1) a majority of committee members appointed by the Speaker of the House and Majority Leader of the Senate and (2) a majority of committee members appointed by the Minority Leader of the House and Minority Leader of the Senate. There are no provisions that require consideration of the bill by any committees in the House or by the full House. Many of the commission proposals were included in the Multiemployer Pension Reform Act of 2014, enacted as Division O in the Consolidated and Further Continuing Appropriations Act, 2015 (MPRA; P.L. Participants' benefits in insolvent plans would be reduced to the PBGC guaranteed levels, or possibly lower, if PBGC has insufficient resources from which to pay 100% of the benefits guaranteed to participants.
Multiemployer defined benefit (DB) pension plans are pensions sponsored by more than one employer and maintained as part of a collective bargaining agreement. About 3.1% of all DB pension plans, covering 28% of all DB pension plan participants, are multiemployer plans. Nearly all of the remaining DB pension plans are maintained by a single employer. A few DB pension plans are maintained by more than one employer but are not maintained under a collective bargaining agreement. In DB pension plans, participants receive a monthly benefit in retirement that is based on a formula. In multiemployer DB pensions, the formula typically multiplies a dollar amount by the number of years of service the employee has worked for employers that participate in the DB plan.
DB pension plans are subject to funding rules in the Internal Revenue Code (26 U.S.C. §431) to ensure they have sufficient resources from which to pay promised benefits. Because single employer and multiemployer DB pension plans have different structures, Congress has established separate funding rules for these plans.
Although many multiemployer DB pension plans have sufficient resources from which to pay their promised benefits, 10% to 15% of participants are in plans that are projected to become insolvent in the next 20 years. The Pension Benefit Guaranty Corporation (PBGC) is a federally chartered corporation that insures the benefits of participants in private-sector DB pension plans. As with the funding rules, Congress established separate PBGC programs to insure single and multiemployer DB pensions. For example, when underfunded single-employer DB plans terminate, PBGC becomes the trustee of the plan. PBGC does not become the trustee of multiemployer DB pension plans; rather, it makes loans to insolvent multiemployer DB plans so the plans may continue to pay participants' guaranteed benefits.
The projected insolvencies of multiemployer plans would likely result in a substantial strain on PBGC's multiemployer insurance program. In the absence of increased financial resources for PBGC, participants in insolvent multiemployer DB pension plans might not receive all of the benefits guaranteed by PBGC. In a report released in June 2017, PBGC indicated that the multiemployer insurance program is highly likely to become insolvent by 2025 and will be unable to pay 100% of participants' benefits at the guaranteed level.
The Multiemployer Pension Reform Act of 2014, enacted as Division O in the Consolidated and Further Continuing Appropriations Act, 2015 (MPRA; P.L. 113-235) made changes to some of the funding rules for multiemployer DB pensions and allowed plans that are expected to become insolvent to cut benefits to plan participants or to apply for a partition of the plan. As of September 21, 2018, the U.S. Treasury has received 32 applications to reduce benefits under MPRA. Five applications, including the application by the Central States, Southeast & Southwest Areas Pension Plan (a very large plan with 400,000 participants), have been denied. Ten applications have been withdrawn, and seven applications have been approved. Decisions are still pending on the remaining 10 applications.
The Bipartisan Budget Act of 2018 (P.L. 115-123), enacted February 9, 2018, created the Joint Select Committee on Solvency of Multiemployer Pension Plans to address the impending insolvencies of several large multiemployer DB pension plans and PBGC. The committee must provide to Congress no later than November 30, 2018, a report and proposed legislative language to improve the solvency of multiemployer DB plans and the PBGC. The report and proposed legislative language must be approved by (1) a majority of committee members appointed by the Speaker of the House and Majority Leader of the Senate and (2) a majority of committee members appointed by the Minority Leader of the House and Minority Leader of the Senate. P.L. 115-123 provides for expedited procedures in the Senate if the committee approves of the proposed legislative language. There are no provisions that provide any special procedures governing House consideration of such legislation.