Monday, March 15, 2021
The
American Rescue Plan Act of 2021 includes a modified version of the Butch Lewis Act, referred to as the Emergency Pension Plan Relief Act of 2021 (EPPRA), which restores to financial health more than 100 failing multiemployer pension plans. However, the measure falls well short of any meaningful long-term funding reform.
EPPRA is the result of a protracted attempt (including multiple proposals from both sides of the aisle) to address the multiemployer pension plan funding crisis. The Democrats have long-pursued direct government financial assistance to plans, while Republicans have focused on a new premium structure and copayments from stakeholders such as active employees and most retirees. Now that EPPRA is the law of the land, employers want and need to know how EPPRA will affect employer obligations for both contributions and withdrawal liability.
ARP: Employee Benefits And Executive Compensation - Employment and HR mondaq.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from mondaq.com Daily Mail and Mail on Sunday newspapers.
Multiemployer Plan Help
The new stimulus bill allows multiemployer plans that are in critical and declining status to get a lump sum of money to make benefit payments for the next 30 years, or through 2051.
Michael Clark, managing director and consulting actuary with River and Mercantile, says plans must file an application for special financial assistance. The Pension Benefit Guaranty Corporation (PBGC) has 120 days from the law’s passage to issue regulations or guidance about the process and specify effective dates.
The legislation says plans can use the money to make benefit payments and pay plan expenses, Clark notes. Multiemployer plans must track the money they have received and earnings on that money separately from other funds. The PBGC will issue rules about permissible investments for the special assistance funds.
The American Rescue Plan (ARP) will have significant and immediate impacts on employee benefit plans, employers, and other plan sponsors and plan administrators.
New PBGC Rule Simplifies Multiemployer Plan Withdrawal Liability Calculations | McDermott Will & Emery jdsupra.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from jdsupra.com Daily Mail and Mail on Sunday newspapers.