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Effects of Liabilities Assessed Employers Withdrawing From Multiemployer Pension Plans

HRD-85-16 Published: Mar 14, 1985. Publicly Released: Mar 14, 1985.
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Highlights

GAO reviewed the implementation and effects of the withdrawal liability provisions of the Multiemployer Pension Plan Amendments Act of 1980 (MPPAA) on those multiemployer plans not covered by the special rules or exemptions that apply mainly to construction and entertainment industry plans.

Recommendations

Matter for Congressional Consideration

Matter Status Comments
To better protect the financial condition of plans against declines in contributions by major employers, Congress may wish to consider amending MPPAA to revise the partial withdrawal liability rules to allow all plans to adopt an option similar to the 35-percent rule now available to retail food industry plans.
Closed – Not Implemented
As of January 20, 1987, no action had been taken on this recommendation. Follow-up on this recommendation should be discontinued and follow-up on recommendations to Congress will be considered satisfied when they have not been acted on over four follow-up cycles.
Because the application of withdrawal liability in fully funded plans does not seem to have been contemplated under MPPAA, Congress may wish to consider amending MPPAA to exempt employers in fully funded plans from withdrawal liability.
Closed – Implemented
As of January 20, 1987, no congressional action had been taken on this recommendation. However, on December 31, 1986, PBGC published a Notice of Interpretation stating that it had reconsidered its previous opinion and concluded that a fully funded plan does not have a right to assess withdrawal liability. Therefore, the recommendation has been implemented by regulation.

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Topics

Collective bargaining agreementsEmployee benefit plansLabor relationsInsuranceInterest ratesLiability (legal)PensionsFinancial conditionBenefit paymentsFood industry