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Multiemployer Pension Plan Reform/Bailout May Be Greater Than Expected; Guidance Still Forthcoming

The Emergency Pension Plan Relief Act of 2021 (EPPRA), enacted as part of the American Rescue Plan Act of 2021 (ARPA), contained unprecedented financial relief for the most troubled multiemployer pension plans (MEPPs). The MEPPs community is eagerly awaiting guidance from the Pension Benefit Guaranty Corporation (PBGC) on the requirements for MEPPs to apply for the special financial assistance under the ARPA. New Section 4262(c) of ERISA provides that the PBGC will issue this guidance no later than 120 days after enactment or by July 9, 2021. Also, more guidance is anticipated on the impact of this funding windfall on employer’s obligations for withdrawal liability.

In the interim, the Congressional Research Service (CRS) (Multiemployer Defined Benefit Pension Plans Potentially Eligible for Special Financial Assistance Under the American Rescue Plan Act (congress.gov)) indicated that both the universe of plans potentially eligible for ARPA relief and the amount of such relief may be greater than initially anticipated. For example, just one MEPP, the Central States, Southeast & Southwest Areas Pension Plan, reported a funding shortfall of approximately $43.6 billion. While there is no specific amount appropriated under the new law, pre-enactment projections estimate expenditures to qualifying plans of approximately $86 billion. The CRS’s report, issued on May 28, 2021, indicates that the $86 billion figure may be overly optimistic. The number of MEPPs eligible for assistance and the actual amount of assistance may well exceed original estimates. We are closely monitoring how this expansive federal assistance program might provide some relief to contributing employers.

As with most aspects of the ARPA multiemployer subsidy, a myriad of questions remains unanswered. 

Jackson Lewis P.C. © 2022National Law Review, Volume XI, Number 158
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About this Author

Robert R. Perry, Jackson Lewis P.C., labor, employment, benefits, lawyer
Principal

Robert R. Perry is a Principal in the New York City, New York, office of Jackson Lewis P.C. He has more than 20 years of experience in the area of employee benefits law.

Mr. Perry’s practice includes counseling clients on all aspects of employee benefits and executive compensation. Mr. Perry also advocates on behalf of clients in benefits-related disputes, as well as in administrative proceedings before the Internal Revenue Service, the United States Department of Labor and the Pension Benefit Guaranty Corporation.

212-545-4000
David M. Pixley Employee Benefits and ERISA  Lawyer Cleveland Jackson Lewis
Of Counsel

David M. Pixley is Of Counsel in the Cleveland, Ohio office of Jackson Lewis P.C. His practice focuses on employee benefits and ERISA litigation.

Mr. Pixley’s practice includes counseling clients on all aspects of employee benefits and ERISA litigation. His experience includes defending plans and fiduciaries in administrative proceedings, appeals, and litigation related to benefit claims and fiduciary obligations.

In addition to his extensive courtroom experience, Mr. Pixley routinely advises and counsels clients with regard to employee benefit plan...

216-750-0404
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