While the majority of multiemployer plans appear primed for gradual recovery as the economy improves, a minority of such plans will not be able to recover using the tools and authority provided by the Pension Protection Act of 2006 (PPA; P.L. 109-280), according to Joshua Gotbaum, director of the Pension Benefit Guaranty Corporation (PBGC). Gotbaum testified on December 19, 2012 before the Health, Employment, Labor, and Pensions Subcommittee of the House Committee on Education and the Workforce. Gotbaum told the subcommittee that many “critical status” plans (and some “seriously endangered status” plans) are severely distressed and will need still further provisions to remain viable.
Congressional support for multiemployer plans
Congress has acted repeatedly to help reduce the strains on multiemployer plans and provide contribution flexibility, Gotbaum noted. In 2004, certain plans were permitted to defer the charges related to one-time investment losses; in 2008, plans could elect to delay implementation of PPA requirements for one year; and in 2010, funding relief allowed many plans to lessen the impact of 2008 investment losses on their funded status and contribution requirements. Plans relied extensively on this relief as they tried to regain their footing, he said.