The 1980 Multiemployer Pension Plan Amendments Act An Assessment Of Funding Requirement Changes

Author : U S Government Accountability Office (G
Publisher : BiblioGov
ISBN 13 : 9781289075194
Total Pages : 42 pages
Book Rating : 4.0/5 (751 download)

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Download or read book 1980 Multiemployer Pension Amendments written by U S Government Accountability Office (G and published by BiblioGov. This book was released on 2013-06 with total page 42 pages. Available in PDF, EPUB and Kindle. Book excerpt: In response to a congressional request, GAO reported on: (1) changes in the Pension Plan Insurance Program's financial condition since the Multiemployer Pension Plan Amendments Act of 1980 (MPPAA) was enacted; (2) the act's initial effects on the program, plan participants, and contributing employers; and (3) possible effects of the act over the long term. GAO found that, at the time MPPAA was enacted in 1980, the insurance program had an $8.5 million deficit, but 4 years later, it had a $17.2 million surplus. During the same period, the program's cash reserve increased from three times annual disbursements to seven times. Both improvements came about because the increased premium rate generated more than enough revenue to pay program liabilities, while average disbursements remained relatively constant before and after the act went into effect. GAO found that MPPAA provisions provided protection to the program without significantly increasing costs to most employers, because: (1) plan funding provisions, for most plans, required higher employer contributions than before; (2) withdrawal liability provisions, as of mid-fiscal-year 1983, resulted in about $260 million being potentially collectable from employers who withdrew from the 149 plans; and (3) a special provision eliminated withdrawal liability for about 68 percent of the 3,853 employers withdrawing from sample plans with unfunded benefits and reduced liability for another 12 percent. GAO believes that: (1) the program remains exposed to billions of dollars in potential losses from unfunded plan benefits; (2) MPPAA provisions may be inadequate to protect the program because collections of withdrawal liabilities from bankrupt employers may be limited; (3) the act's withdrawal liability provisions may cause new employers not to join the plans; and (4) participants' benefits may be significantly affected by employers acting to slow or stop benefits improvements.