In February, the National Coordinating Committee for Multiemployer Plans issued a proposal of its own, called “Solutions not Bailouts,” which recommends changes in regulations to allow for more flexibility in plan design and a broader ability to limit benefits when a plan is in deep financial trouble.
While some pension plans are set up and maintained by single employers, in multi-employer plans, beneficiaries who work for a number of companies are pooled into a single plan, with the terms negotiated by a union. The plans allow smaller employers to share risk, and allow workers to keep their pension benefits if they move from one company to another, as long as both companies participate in the plan. Single-employer plans are protected by a different PBGC trust fund.
The GAO report is the latest in a series of studies of the health of private pension plans, the impact of the 2008 financial crisis, and the steps the plans have taken to shore up their solvency. All of the studies have pointed toward a looming crisis that cannot be handled under the current legal and regulatory rules.