Construction Workers

Distressed & Terminated Plans

We work with stakeholders to evaluate and implement the best solutions when pension plans are facing financial insolvency

Title IV of ERISA created the Pension Benefit Guaranty Corporation (PBGC), along with rules and regulations on insolvent or terminating plans. Unfortunately, these rules were enacted for single employer defined benefit pension plans without proper attention to multiemployer plans. Our attorneys have the experience navigating the statutes, regulations and PBGC Opinions needed to understand the procedures that multiemployer plans must follow. 

Since 2006, sections of ERISA were added to provide distressed pension plans with tools to help them avoid insolvency and termination. These laws include the Pension Protection Act of 2006 (PPA) and Multiemployer Pension Reform Act of 2014 (MPRA), both of which created significant reporting and notice requirements for all pension plans, not just distressed plans. 

How our team can help

Our attorneys have worked with many distressed pension plans.  Some were able to use the tools under PPA and MPRA in order to avoid insolvency, while others were required to terminate.  We worked with all of the stakeholders during the termination to manage the withdrawal process for the employers.  In most cases, the plans were able to provide additional benefits to their participants and beneficiaries by negotiating settlements of withdrawal liability payments. Many times, lump sum payments were negotiated that extended the solvency of the pension fund for years.  By forestalling insolvency, these settlement payments extended the assets of the pension plan so benefit reductions were avoided.   

Prior to terminating a multiemployer pension plan due to insolvency, our Attorneys can help manage the administrative burdens required by ERISA. Since multiemployer plans must continue administering the benefits after termination, we work with Plan Sponsors and their staff to have procedures and documentation in place to deal with continuous PBGC oversight.