Multi-Employer Pension and ERISA Expert
Labor unions are the primary sponsor for multi-employer pension plans. These plans are designed to provide retirement income security for workers from different employers.
Multi-employer pension plans are common in industries where a large number of workers tend to move around, such as in trucking or construction. The union, as the sponsor, must negotiate with each employer separately to support plan funding.
Multi-employer pension plans allow workers to keep their pensions when they change jobs and move to another participating company, with some exceptions. This consolidates union pension contributions into larger individual funds. Multiple-employer pension plans also allow parent companies to transfer covered workers between subsidiaries with minimal paperwork.
Many companies with significant freight operations participate in the International Brotherhood of Teamsters (IBT) Central States Pension Plan, for example. Benefit levels and employer contributions are determined through collective bargaining for this multi-employer defined benefit plan that covers participants from a large number of unrelated employers.
"Orphan employees" and associated withdrawal liabilities are at the heart of the controversy. Multi-employer plans burden surviving employers with all benefit obligations when less healthy employers go out of business, declare bankruptcy, divest themselves of a participating business, or otherwise end participation.
Legislative efforts have sought to “partition” the CSPF orphan withdrawal liability and transfer it to the Pension Benefit Guarantee Corporation. These efforts to relieve plans from requirements of the Pension Protection Act of 2006 have generally not succeeded to date.
The PBGC itself is significantly underfunded, single-employer and multi-employer deficits amounting to billions of dollars.
Contact a Multi-Employer Pension Expert for a Consultation
ERISA expert Mark Johnson, PhD, JD, is experienced in working with multi-employer plans through his earlier role as Managing Director, Benefits Compliance & Pensions, for American Airlines.
You can reach Dr. Johnson via email or by phone at 817-909-0778. He is available to confidentially discuss an ERISA or retiree medical matter.
Click on the link to read about his representative ERISA cases.