Data on Multiemployer Defined Benefit (DB) Pension Plans

Multiemployer defined benefit (DB) pension plans are pensions sponsored by more than one employer and maintained as part of a collective bargaining agreement. With DB pensions, participants receive a monthly benefit in retirement that is based on a formula. With multiemployer DB pensions, the formula typically multiplies a dollar amount by the number of years of service the employee has worked for employers that participate in the DB plan.

Some DB pension plans have sufficient resources from which to pay their promised benefits. But, as a result of a variety of factors—such as changes in the unionized workforce and the 2007 to 2009 recession—many multiemployer DB plans are likely to become insolvent over the next 20 years and run out of funds from which to pay benefits owed to participants.

The Pension Benefit Guaranty Corporation (PBGC) is a U.S. government agency that insures the benefits of participants in private-sector DB pension plans. Although PBGC is projected to have sufficient resources to provide financial assistance through 2025 to smaller multiemployer DB plans, the projected insolvency of large multiemployer DB pension plans would likely result in a substantial strain on PBGC’s multiemployer insurance program. In a report released in June 2017, PBGC indicated that the multiemployer insurance program is highly likely to become insolvent by 2025. In the absence of increased financial resources for PBGC, participants in insolvent multiemployer DB pension plans would likely see sharp reductions in their pension benefits.

This report’s data are from the public use file of the Form 5500 annual disclosure for the 2015 plan year (the most recent year for which complete information is available). Nearly all private-sector pension plans (including multiemployer DB plans) are required to file Form 5500 with the Internal Revenue Service (IRS), the Department of Labor (DOL), and PBGC. The Form 5500 information includes breakdowns on the number of plan participants, financial information about the plan, and details of companies providing services to the plan. Multiemployer DB plans specifically are required to report their financial condition as being in one of several categories (referred to as the plan’s “zone status”).

The insolvencies of these plans could affect the employers that contribute to multiemployer plans. For example, an employer in a plan that becomes insolvent plan might have to recognize the total amount of its future obligations to the plan, which could affect the employer’s access to credit and, potentially, its participation in other multiemployer plans.

This report provides data on multiemployer DB plans categorized in several ways. First, the report categorizes the data based on plans’ zone status in 2015. Next, it provides a year-by-year breakdown of the number of plans that are expected to become insolvent and the number of participants in those plans. It then provides information on the 25 largest multiemployer DB plans in 2015 (each plan has at least 75,000 participants). Finally, the report provides data on those employers whose plans indicate they contributed more than 5% of the plans’ total contributions (referred to in this report as “5% contributors”) in the 2015 plan year. It lists (1) the 5% contributors whose total contributions to multiemployer plans were at least $25 million and (2) the 5% contributors in the 12 largest multiemployer plans (as ranked by total contributions to the plan) that are in critical and declining status.

Data on Multiemployer Defined Benefit (DB) Pension Plans

August 10, 2018 (R45187)
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Contents

Summary

Multiemployer defined benefit (DB) pension plans are pensions sponsored by more than one employer and maintained as part of a collective bargaining agreement. With DB pensions, participants receive a monthly benefit in retirement that is based on a formula. With multiemployer DB pensions, the formula typically multiplies a dollar amount by the number of years of service the employee has worked for employers that participate in the DB plan.

Some DB pension plans have sufficient resources from which to pay their promised benefits. But, as a result of a variety of factors—such as changes in the unionized workforce and the 2007 to 2009 recession—many multiemployer DB plans are likely to become insolvent over the next 20 years and run out of funds from which to pay benefits owed to participants.

The Pension Benefit Guaranty Corporation (PBGC) is a U.S. government agency that insures the benefits of participants in private-sector DB pension plans. Although PBGC is projected to have sufficient resources to provide financial assistance through 2025 to smaller multiemployer DB plans, the projected insolvency of large multiemployer DB pension plans would likely result in a substantial strain on PBGC's multiemployer insurance program. In a report released in June 2017, PBGC indicated that the multiemployer insurance program is highly likely to become insolvent by 2025. In the absence of increased financial resources for PBGC, participants in insolvent multiemployer DB pension plans would likely see sharp reductions in their pension benefits.

This report's data are from the public use file of the Form 5500 annual disclosure for the 2015 plan year (the most recent year for which complete information is available). Nearly all private-sector pension plans (including multiemployer DB plans) are required to file Form 5500 with the Internal Revenue Service (IRS), the Department of Labor (DOL), and PBGC. The Form 5500 information includes breakdowns on the number of plan participants, financial information about the plan, and details of companies providing services to the plan. Multiemployer DB plans specifically are required to report their financial condition as being in one of several categories (referred to as the plan's "zone status").

The insolvencies of these plans could affect the employers that contribute to multiemployer plans. For example, an employer in a plan that becomes insolvent plan might have to recognize the total amount of its future obligations to the plan, which could affect the employer's access to credit and, potentially, its participation in other multiemployer plans.

This report provides data on multiemployer DB plans categorized in several ways. First, the report categorizes the data based on plans' zone status in 2015. Next, it provides a year-by-year breakdown of the number of plans that are expected to become insolvent and the number of participants in those plans. It then provides information on the 25 largest multiemployer DB plans in 2015 (each plan has at least 75,000 participants). Finally, the report provides data on those employers whose plans indicate they contributed more than 5% of the plans' total contributions (referred to in this report as "5% contributors") in the 2015 plan year. It lists (1) the 5% contributors whose total contributions to multiemployer plans were at least $25 million and (2) the 5% contributors in the 12 largest multiemployer plans (as ranked by total contributions to the plan) that are in critical and declining status.


Background on Multiemployer Pension Plans

In general, pension plans are a form of deferred compensation: workers do not receive income when it is earned but rather receive that income in the future. The Internal Revenue Code (IRC) provides tax advantages to certain deferred compensation schemes: rather than including such compensation in taxable income when it is earned, the compensation is included in taxable income when it is received by the individual (presumably, in retirement).

Pension plans may be classified according to whether they are (1) defined benefit (DB) or defined contribution (DC) plans and (2) sponsored by one or more than one employer. With DB plans, participants receive regular monthly benefit payments in retirement (which some refer to as a "traditional" pension).1 With DC plans, of which the 401(k) plan is the most common, participants have individual accounts that are the basis of income in retirement. The plans that are the subject of this report are DB plans.

Pension plans are also classified by whether they are sponsored by one employer (single-employer plans) or by more than one employer (multiemployer and multiple employer plans). Multiemployer pension plans are sponsored by more than one employer (often, though not required to be, in the same industry) and maintained as part of a collective bargaining agreement. Multiple employer plans are sponsored by more than one employer but are not maintained as part of collective bargaining agreements.2 The plans that are the subject of this report are multiemployer plans.

Multiemployer DB pensions are of current concern to Congress because approximately 10% to 15% of participants are in plans that may become insolvent.3 When a multiemployer pension plan becomes insolvent, the Pension Benefit Guaranty Corporation (PBGC) provides financial assistance to the plan so the plan can continue to pay benefits up to the PBGC guaranteed amount.4 With plans that receive PBGC financial assistance, there is a statutory maximum benefit that the plan can provide, currently equal to $12,870 per year for an individual with 30 years of service in the plan.5 The guarantee is not adjusted for changes in the cost of living.

Using 2013 data, PBGC estimated that 79% of participants in multiemployer plans that were receiving financial assistance receive their full benefit (e.g., their benefits were below the PBGC maximum guarantee).6 Among participants in plans that were terminated and likely to need financial assistance in the future, 49% of participants have a benefit below the PBGC maximum guarantee, and 51% have a benefit larger than the PBGC maximum guarantee. Among ongoing plans (neither receiving PBGC financial assistance nor terminated and expected to receive financial assistance), the average benefit is almost twice as large as the average benefit in terminated plans. This suggests that a larger percentage of participants in plans that receive PBGC financial assistance in the future are likely to see benefit reductions as a result of the PBGC maximum guarantee level.7

PBGC estimates that in the future it will not have sufficient resources from which to provide financial assistance for insolvent plans to pay benefits at the PBGC guarantee level. Most participants would receive less than $2,000 per year because PBGC would be able to provide annual financial assistance equal only to its annual premium revenue, which was $291 million in FY2017.8 There is no obligation on the part of the federal government to provide financial assistance to PBGC,9 although some policymakers have stated that some form of federal assistance to PBGC might be necessary to ensure that participants' benefits are not reduced to a fraction of their promised benefits.10

Multiemployer Pension Plan Data

CRS analyzed public-use Form 5500 data from the Department of Labor (DOL) for the 2015 plan year,11 the most recent year for which complete data are available.12 Most private-sector pension plans are required to annually report to the Internal Revenue Service (IRS), DOL, and PBGC information about the plan, such as the number of participants, financial information, and the companies that provide services to the plan. In addition to Form 5500, pension plans are generally required to file additional information in specific schedules. For example, most multiemployer DB plans are required to file Schedule MB, which contains information specific to multiemployer DB plans, such as the zone status of the plan (described below). Each pension plan's Form 5500 and required schedules are available by search on DOL's website.13

The public-use Form 5500 data included 1,363 plans that indicated they were multiemployer DB pension plans for the 2015 plan year.14 These plans had 10.8 million participants.15

The analyzed data in this report consider only multiemployer DB pension plans that filed Schedule MB for the 2015 plan year. Not all multiemployer DB pension plans file Schedule MB. For example, some plans that received PBGC financial assistance or had experienced a withdrawal of all employers in the plan (but which were still paying benefits to retired participants) did not file Schedule MB in 2015.

In the public-use Form 5500 data, 1,267 plans with 10.7 million participants filed Schedule MB in 2015. Among participants in these plans that filed Schedule MB in 2015

  • about 38.3% were active participants (working and accruing benefits in a plan);
  • about 28.5% were retired participants (currently receiving benefits from a plan);
  • about 27.5% were separated, vested participants (not accruing benefits from a plan, but owed benefits and will receive them at eligibility age); and
  • about 5.7% were deceased participants whose beneficiaries are receiving or are entitled to receive benefits.

In 2015, multiemployer DB plans that filed Schedule MB had $477.7 billion in assets and owed participants $1,038.0 billion in benefits, resulting in total underfunding of $560.3 billion.

The value for liabilities used in this report is the current liability value (also called the RPA '94 [for Retirement Protection Act of 1994], passed as part of the Uruguay Round Agreements Act [P.L. 103-465]) on Schedule MB.16 Plans report two values of liabilities: the actuarial value and the RPA '94 liability. The main difference is the value of the discount rate that is used to value plan liabilities. The actuarial valuation of liabilities typically discounts them using the expected return on assets. The RPA '94 valuation of liabilities discounts them using a lower rate, based on interest rates on 30-year Treasury securities.17 The RPA '94 valuation method results in a higher valuation of plan liabilities compared to the actuarial valuation method. Among plans that filed Schedule MB in 2015, the median RPA '94 rate was 3.51%, and the median rate used to calculate the actuarial value of liabilities was 7.5%. The discount rate used by PBGC is based on a survey of insurance annuity prices and is closer to the RPA '94 rate.18 For example, the PBGC for discounting multiemployer plan liabilities in 2014 (the most recent year available) was 3.54%.19

Among the 1,267 multiemployer plans in 2015 that submitted Schedule MB, 1,246 were underfunded (owed more in future benefits than had in current assets), 17 plans were overfunded (had more in assets than owed in future benefits), and 4 plans did not report any assets or liabilities.

Zone Status of Multiemployer Plans in 2015

The Pension Protection Act of 2006 (PPA; P.L. 109-280) required that multiemployer plans that meet specified financial criteria must report to the IRS their financial condition as being in one of several categories. The categories are described in Table 1.

Table 1. Multiemployer Funding Status Categories

Category

Description

No Category (sometimes called green zone)

Plans that do not meet any of the categories below are often called green zone plans. A green zone plan does not have to address its underfunding, if any.

Endangered (sometimes called yellow zone) / Seriously Endangered (sometimes called orange zone))

A plan is in endangered status if (1) the plan's funding ratio is less than 80% funded or (2) the plan has a funding deficiency in the current year or is projected to have one in the next six years. A plan is seriously endangered if it meets both of these criteria.

Critical (sometimes called red zone)

A plan is in critical status if any of the following conditions apply: (1) the plan's funding ratio is less than 65% and in the next six years the value of the plan's assets and contributions will be less than the value of benefits; (2) in the current year, the plan is not expected to receive 100% of the contributions required by the plan sponsor, or the plan is not expected to receive 100% of the required contributions for any of the next three years (four years if the plan's funding percentage is 65% or less); (3) the plan is expected to be insolvent within five years (within seven years if the plan's funding percentage is 65% or less); or (4) the cost of the current year's benefits and the interest on unfunded liabilities are greater than the contributions for the current year, the present value of benefits for inactive participants is greater than the present value of benefits for active participants, and there is expected to be a funding deficiency within five years. Plans not in critical status may elect to be in critical status if they are projected to be so in the next five years.

Critical and Declining

A plan is in critical and declining status if (1) it is in critical status and (2) the plan actuary projects the plan will become insolvent within the current year or within either the next 14 years or the next 19 years, as specified in law. Plans in critical and declining status must provide notice to plan participants, beneficiaries, the collective bargaining parties, PBGC, and DOL.

Plans in critical and declining status may be eligible to apply to the U.S. Department of the Treasury to reduce benefits to participants up to certain limits, if the benefit reductions restore the plan to solvency.

Source: Congressional Research Service (CRS).

Note: The Pension Protection Act of 2006 (PPA; P.L. 109-280) required plans to report their status as endangered, seriously endangered, or critical. The Multiemployer Pension Reform Act of 2014 (MPRA; passed as part of P.L. 113-235) added the status of critical and declining.

Table 2 lists the number of plans, participants, and total underfunding in each zone for the 2015 plan year.

Plans that are in endangered or seriously endangered status must adopt a funding improvement plan.20 A funding improvement plan is a range of options (such as increased contributions and reductions in future benefit accruals) that, when adopted, will reduce a plan underfunding. The reduction in underfunding is by 33% during a 10-year funding improvement period (for plans in endangered status) or by 20% during a 15-year funding improvement period (for plans in seriously endangered status). Plans in endangered or seriously endangered status cannot increase benefits during the funding improvement period.

Plans in critical status must adopt a rehabilitation plan.21 The rehabilitation plan is a range of options (such as increased employer contributions and reductions in future benefit accruals) that, when adopted, will allow the plan to emerge from critical status during a 10-year rehabilitation period. If a plan cannot emerge from critical status by the end of the rehabilitation period using reasonable measures (referred to as a plan that has exhausted reasonable measures, or an ERM plan),22 it must either install measures to (1) emerge from critical status at a later time (after the end of the rehabilitation period) or (2) forestall insolvency. Plans in critical status may not increase benefits during the rehabilitation period. In Table 2, plans that are in critical status are classified by whether (1) they are projected to emerge from critical status within the rehabilitation period, or (2) they indicated that they have exhausted reasonable measures and would not emerge from critical status within the rehabilitation period and that the rehabilitation plan is designed to forestall insolvency.23 Some of the ERM plans are likely to become insolvent, although they do not meet the definition of being in critical and declining status.

CRS analysis of 2015 Form 5500 data reported in Table 2 indicated the following:

  • Green Zone: Eight hundred plans were in the green zone. These plans covered 5.8 million participants (55.9%).
  • Endangered or Seriously Endangered: One hundred fifty-six plans were either endangered or seriously endangered. These plans covered 1.2 million participants (11.6%).
  • Critical: Two hundred fifteen plans were in critical status. These plans covered 2.2 million participants (21.3%). One hundred forty-five plans were in critical status but were expected to emerge from critical status by the end of the rehabilitation period. Seventy of the 215 plans in critical status do not expect to able to emerge from critical status by the end of the rehabilitation period and will remain in critical status past the end of the rehabilitation period (or indefinitely), or possibly become insolvent.
  • Critical and Declining: Eighty-three plans were in critical and declining status. These plans covered 1.2 million participants (11.3%).

Table 2. Zone Status of Multiemployer Defined Benefit Plans in 2015

(among plans that reported zone status on Form 5500 Schedule MB for 2015 plan year)

Status

Plans

Participants
(As Reported on Schedule MB)

 

Number

Percentage Among Multiemployer Plans That Reported Zone Status

Underfunding (in billions of dollars; RPA '94 Method)

Number

Percentage Among Participants in Multiemployer Plans that Reported Zone Status

Green Zone

800

63.7%

-$277.4

5,760,428

55.9%

Endangered

151

12.0%

-$94.4

1,170,746

11.4%

Seriously Endangered

5

0.4%

-$2.7

24,773

0.2%

Critical

215

17.1%

-$114.7

2,193,968

21.3%

Projected to Emerge from Critical Status

145

11.5%

-$94.9

1,521,765

14.8%

Has Exhausted Reasonable Measures (ERM)

70

5.6%

-$19.8

672,203

6.5%

Critical and Declining

83

6.6%

-$71.0

1,161,981

11.3%

Total

1,254

100.0%

-$560.3

10,311,896

100.0%

Source: CRS analysis of Form 5500 data sets available from DOL website.

Notes: Percentages of plans and participants do not add to 100% due to rounding. Eight plans that received PBGC financial assistance are not included, even if the plan filed Schedule MB, because not all plans that receive PBGC financial assistance file Schedule MB. In addition, 22 plans filed Schedule MB in the Form 5500 data but did not report a zone status for the 2015 plan year. For these plans, CRS examined the Form 5500 filed with DOL. In 15 instances, CRS added the plans' zone status after an examination of the Schedule MB attached to the plan's actuarial report. In four instances, the plans indicated that they were inoperable (for example, they had experienced a mass withdrawal in a previous year and had no active participants in the plan) or were receiving PBGC financial assistance and are not included in the analysis of Table 2 and Table 3. CRS was unable to determine the zone status of three plans. These plans were not included in the analysis in Table 2 and Table 3. A plan in critical status must develop a rehabilitation plan, which is a set of options intended to allow the plan to emerge from critical status during the rehabilitation period. However, some plans are in such poor financial condition that they cannot adopt any reasonable options to emerge from critical status by the end of their rehabilitation period. These plans are referred to as having exhausted reasonable measures (ERM plans). Rehabilitation for ERM plans is based on forestalling plan insolvency. Some ERM plans may become insolvent (but do not meet the criteria for being in declining status). Other ERM plans indicated that they would not become insolvent but would remain in critical status after their rehabilitation period will have ended.

Multiemployer Plan Insolvencies by Year

As noted above, data from Schedule MB of Form 5500 for the 2015 plan year showed that 83 plans indicated that they were in critical and declining status and expected to become insolvent.

As part of their Form 5500 filings, multiemployer plans that are in critical and declining status must indicate the year in which they expect to become insolvent. Table 3 lists by year of expected insolvency the number of pension plans and participants in critical and declining status. The table also contains the dollar amount of benefits the plans paid in 2015. The amount of benefits paid on a yearly basis at insolvency is likely to be different compared to the amount reported for 2015, particularly for plans with an insolvency year many years in the future. However, this information provides context on the scale of the problem. In addition, because of the maximum guarantee, some participants would likely not receive 100% of the benefits earned under the plan. As noted above, PBGC estimated that 51% of participants in plans that are currently terminated and are likely to receive PBGC financial assistance in the future would likely see their benefits reduced because of the PBGC maximum guarantee.

An additional 70 plans had exhausted reasonable measures and would either be unable to emerge from critical status or become insolvent. These plans are not included in the analysis of Table 3.

Table 3. Expected Year of Insolvency of Multiemployer Employer Plans in Critical and Declining Status

(2015 plan year data)

Expected Year of Insolvency

Number of Plans

Number of Participants

Benefits Paid by Plans in 2015

2016

1

4,571

$49,645,538

2017

3

5,106

$14,650,616

2018

1

1,148

$9,263,748

2019

2

2,879

$16,804,535

2020

5

9,369

$41,141,269

2021

6

67,660

$230,067,157

2022

6

156,736

$813,078,187

2023

4

4,811

$15,196,087

2024

7

7,343

$51,675,542

2025

10

414,057

$2,989,803,588

2026

3

4,002

$32,181,201

2027

2

3,200

$22,053,207

2028

6

82,936

$238,874,016

2029

2

81,095

$195,044,050

2030

4

97,747

$267,505,459

2031

7

11,464

$49,202,401

2032

6

80,867

$249,664,381

2033

1

310

$347,924

2034

3

6,353

$40,248,624

2036

1

2,255

$1,498,117

2040

1

2,025

$7,514,897

2046

1

113,040

$635,596,595

2100a

1

3,007

$5,092,218

Total

83

1,161,981

$5,976,149,357

Source: CRS analysis of Form 5500 data for the 2015 Plan Year.

a. One plan in critical and declining status listed the year 2100 as the expected year of insolvency on Schedule MB. Plans in critical and declining status are projected to become insolvent within 19 years. The plan indicated that its rehabilitation plan was based on forestalling insolvency and to fund the plan over approximately 30 years. Not all multiemployer DB pension plans' 2016 Form 5500 was available. This plan had 2016 information available which indicated its status as critical.

The 25 Largest Multiemployer Plans

Plans with 75,000 or more participants, which were the 25 largest multiemployer DB pension plans (by the number of participants) in the 2015 plan year, are listed in Table 4. For each plan, the table contains the number of participants, the zone status in 2015, the funded percentage, the amount of underfunding in the plan, and the amount of expected payments in the 2015 plan year. In total, these plans have 4.7 million participants, which is 44.4% of participants in multiemployer plans that filed Schedule MB in 2015.

Table 4. The 25 Largest Multiemployer Defined Benefit Pension Plans in 2015 Plan Year

Plan Name

Participants at End of Plan Year

Zone Status in 2015

Funded Percentage (Current Value of Assets / RPA '94 Current Liability)

Funding Amount
(Current Value of Assets – RPA '94 Current Liability)

Expected Benefit Payments in 2015 Plan Year

Western Conference of Teamsters Pension Plan

585,062

Green Zone

57.6%

-$27,032,091,000

$2,609,744,000

National Electrical Benefit Fund

522,849

Green Zone

46.0%

-$15,217,649,264

$968,597,487

Legacy Plan of The National Retirement Funda

407,404

Critical

37.4%

-$4,045,997,889

$318,838,728

Central States, Southeast and Southwest Areas Pension Plan

397,492

Critical & Declining

33.0%

-$36,236,915,333

$2,912,185,230

IAM National Pension Fund

270,018

Green Zone

55.2%

-$8,857,465,848

$668,217,547

1199 SEIU Health Care Employees Pension Fund

251,797

Green Zone

47.0%

-$10,689,091,818

$805,189,351

United Food and Commercial Workers Intl Union - Industry Pension Fund

219,997

Green Zone

59.6%

-$3,872,594,599

$365,005,922

U.F.C.W. Consolidated Pension Fund

202,670

Green Zone

52.9%

-$3,368,734,127

$268,484,313

Central Pension Fund of the IUOE and Participating Employers

191,138

Green Zone

49.1%

-$14,879,763,321

$964,111,800

Southern California UFCW Unions and Food Employers Joint Pension Trust Fund

176,731

Critical

41.0%

-$6,563,314,710

$454,040,762

Plumbers and Pipefitters National Pension Fund

140,620

Endangered

40.1%

-$8,329,469,400

$581,749,582

Sheet Metal Workers' National Pension Fund

135,270

Endangered

34.1%

-$7,722,445,985

$482,984,733

UFCW - Northern California Employers Joint Pension

123,573

Critical

36.4%

-$5,898,795,399

$400,166,585

Bakery and Confectionery Union and Industry International Pension Fund

113,040

Critical & Declining

42.6%

-$6,478,546,764

$635,596,595

Steelworkers Pension Trust

111,250

Green Zone

49.8%

-$3,863,660,412

$223,907,572

United Mine Workers of America 1974 Pension Plan

104,258

Critical & Declining

39.8%

-$5,767,540,282

$617,619,324

S.E.I.U. National Industry Pension Fund

101,970

Critical

45.9%

-$1,320,242,979

$116,871,263

Sound Retirement Trust

96,256

Critical

40.5%

-$2,988,692,841

$162,088,742

Building Service 32BJ Pension Fund

96,119

Critical

33.5%

-$4,205,404,323

$264,944,014

Southern Nevada Culinary and Bartenders Pension Plan

94,464

Green Zone

55.9%

-$1,553,515,000

$136,839,590

1199 SEIU Home Care Employees Pension Fund

88,644

Green Zone

60.4%

-$214,655,518

$24,692,909

Adjustable Plan of the National Retirement Funda

78,268

Green Zone

n/a

n/a

n/a

Motion Picture Industry Pension Plan

78,295

Green Zone

37.2%

-$5,545,732,000

$274,477,000

International Painters and Allied Trades Industry Pension Plan

78,244

Endangered

36.3%

-$5,376,580,189

$383,477,028

Bricklayers and Trowel Trades International Pension Fund

77,025

Endangered

36.3%

-$2,506,421,386

$167,354,267

Source: CRS analysis of Form 5500 data for the 2015 Plan Year.

Notes: The funded percentage and plan underfunding are calculated using the current value of assets and the RPA '94 current liability.

a. The Legacy Plan of the National Retirement Fund and the Adjustable Plan of the National Retirement Fund were established January 1, 2015, after the National Retirement Fund was frozen. The Adjustable Plan does not list any funding liabilities or expected benefit payments in the 2015 plan year. For the 2016 plan year, the plan listed its underfunding as $40,526,444 and expected benefit payments of $6,718,583.

5% Contributors

Some employers participate in more than one multiemployer DB pension plan, and the insolvency of one plan in which a particular employer participates could have implications for the other plans in which that employer also participates. For example, an employer that leaves a multiemployer plan generally has to pay withdrawal liability, which is the employer's share of unfunded benefits in that plan.24 An employer that withdraws from a plan may be required to acknowledge the withdrawal liability in its financial statements, potentially affecting the employer's access to credit and its financial health.25 Other multiemployer plans to which an employer is a large contributor could be affected if that employer is forced to withdraw from those plans because of financial difficulties.

Schedule R, Part V, Line 13 of Form 5500 requires multiemployer DB plans to list employers that contribute more than 5% of that plan's total contributions (referred to in this report as "5% contributors"). Employer contributions listed in Form 5500 include (1) regular employer contributions (for employers with active participants in the plan) and (2) employer withdrawal liability (for employers that have withdrawn from the plan).26 For the purposes of calculating the 5% threshold, it is unclear whether plans should include withdrawal liability in the calculations. PBGC indicated that its staff's view was that withdrawal liability should not be included in the calculations and that other agencies were considering the issue in possible revisions to Form 5500.27

In addition to the employer's name, the form lists each employer's Employer Identification Number (EIN)28 and dollar amount contributed.29

Of the 1,363 multiemployer plans, 1,163 plans indicated that they had at least one 5% contributor in 2015. Among plans with at least one 5% contributor, the median number of 5% contributors was four. Table 5 lists employers whose contributions as 5% contributors totaled $25 million or more in 2015.30 Note that an employer's total contributions to all of the multiemployer plans to which it contributed could have been larger than the amount listed in Table 5 if the employer contributed to additional plans, but whose contributions to those other plans were less than 5% of a plan's total contributions.31

The United Parcel Service (UPS) is the largest 5% contributor in terms of the dollar amount of contributions as a 5% contributor. A number of grocery chains contributed at least $25 million as 5% contributors: Kroger, Stop and Shop, Safeway, and Albertsons are among the 10 largest 5% contributors (as ranked by contributions as 5% contributors).32

Table 5. Employers That Contributed at Least $25 Million as 5% Contributors in 2015 Plan Year

Employer

Amount of Contributions as a 5% Contributor

Number of Plans to Which Company Contributes at Least 5% of Total Contributions

United Parcel Service

$1,558,542,886

25

Kroger

$283,426,005

9

Safewaya

$164,139,961

11

ABF Freight Systems

$109,511,925

10

Otis Elevator Company

$92,221,223

1

Thyssenkrupp Elevator

$85,426,979

1

U.S. Steel

$73,991,156

4

Arcelor Mittal

$68,975,880

4

Albertsonsa

$67,561,790

7

Elevator Products Corp.

$65,784,626

2

Twentieth Century Fox Film

$61,650,069

6

SSA Terminals

$60,314,720

4

Ralphs

$56,849,917

3

Von's Grocery Company

$51,900,162

1

Marine Terminals Corporation

$51,384,140

8

Total Terminals International

$50,967,779

2

Kone, Inc.

$50,762,448

1

Stop & Shop

$50,435,610

6

Bimbo Bakeries

$49,708,653

13

APM Terminals Pacific

$41,989,871

3

Giant Food

$41,065,121

4

Warner Brothers Pictures

$41,032,082

3

SSA Marine Inc.

$40,835,130

2

United Airlines

$39,605,118

1

Savemart Supermarkets

$38,767,146

2

Stater Brothers Market

$37,150,859

1

Walt Disney Pictures

$36,408,472

3

Pacific Crane Maintenance Co LP

$36,215,331

1

UFCW International Union

$33,968,000

1

Jack Cooper Transport

$33,675,902

3

City Of New Yorkb

$33,305,709

2

Universal City Studios

$32,321,640

2

Allina Health System

$32,139,418

5

Roadway Express

$31,431,867

4

Spirit Aerosystems, Inc.

$30,849,934

1

Columbia Pictures Industries

$30,274,936

2

Mt. Sinai

$30,117,958

3

American Building Maintenance

$29,592,958

10

Yusen Terminals, Inc.

$29,234,634

1

West Coast Terminal and Stevedore

$28,183,201

1

ACCO Engineered Systems

$27,623,403

10

Smiths Food

$26,969,508

4

Steward Health Care System, LLC

$26,622,000

1

Mondelez Global LLC

$26,363,764

1

Enerfab Inc.

$26,171,438

1

Acme Markets

$25,851,856

3

Source: CRS analysis of Form 5500 data for the 2015 plan year.

Notes: An employer's contributions to all multiemployer plans to which it contributed in 2015 could have been larger if the employer was not a 5% contributor in some additional plans.

a. Safeway and Albertsons merged in 2015.

b. Although the City of New York is a government employer, the multiemployer plans to which it contributes are not government pension plans. These plans are the Cultural Institutions Pension Plan and the 32BJ School Workers Pension Fund.

5% Contributors in the Largest Critical and Declining Multiemployer DB Plans

Table 6 lists the 5% contributors in the 12 largest multiemployer DB plans that are in critical and declining status (ranked by the amount of total contributions to the plan for the 2015 plan year) and the number of plans in which each employer is a 5% contributor. Table 6 also lists the amount of the employer's contributions, the total number of contributing employers to the plan, the total amount of contributions to the plan, and the amount of contributions from 5% contributors as a percentage of total plan contributions. Total plan contributions include both required employer contributions and withdrawal liability, although plans might not include withdrawal liability payments when determining 5% contributors.33

Table 6. Contributions and 5% Employers in the 12 Largest Critical and Declining Multiemployer DB Pension Plans, Ranked by Total Contributions in 2015 Plan Year

Plan Name

5% Contributors (number of plans to which company is 5% contributor)

Contributions by 5% Contributors

Number of 5% Contributors

Total Number of Contributors

Total Plan Contributions

Contributions by 5% Contributors as a Percentage of Total Contributions

Central States, Southeast and Southwest Areas Pension Plan

3

1,458

$1,275,947,643

10.9%

ABF Freight System (10)

$77,573,671

 

 

 

 

YRC Inc. (4)

$30,909,960

 

 

 

 

Jack Cooper Transport Company, Inc. (3)

$30,778,906

 

 

 

 

Bakery & Confectionery Union and Industry International Pension Fund

5

226

$159,476,736

60.0%

Bimbo Bakeries (13)

$34,284,709

 

 

 

 

Mondelez Global LLC (1)

$26,363,764

 

 

 

 

Albertsons (7)

$15,696,538

 

 

 

 

Kroger (9)

$11,454,178

 

 

 

 

United States Bakery (1)

$7,851,871

 

 

 

 

Pace Industry Union-Management Pension Fund

5

89

$59,446,728

31.7%

Clearwater Paper Corporation (1)

$5,673,885

 

 

 

 

Westrock Company (1)

$3,908,467

 

 

 

 

Huhtamaki Americas Inc. (1)

$3,677,468

 

 

 

 

Georgia Pacific Corporation (1)

$3,563,411

 

 

 

 

Robert Wood Johnson University Hospital (1)

$2,022,847

 

 

 

 

United Mine Workers of America 1974 Pension Plan

10

42

$57,026,000

84.7%

Jim Walter Resources, Inc. (1)

$8,996,997

 

 

 

 

Cumberland Coal Resources, LP (1)

$7,517,126

 

 

 

 

Marshall County Coal Company (1)

$6,851,065

 

 

 

 

Drummond Company, Inc. (1)

$4,272,350

 

 

 

 

Ohio County Coal Company (1)

$3,966,574

 

 

 

 

Harrison County Coal Company (1)

$3,670,343

 

 

 

 

Marion County Coal Company (1)

$3,551,652

 

 

 

 

Pinnacle Mining Company, LLC (1)

$3,212,801

 

 

 

 

Oak Grove Resources, LLC (1)

$3,202,766

 

 

 

 

Ohio Valley Coal Company (1)

$3,035,834

 

 

 

 

GCIU - Employer Retirement Benefit Plan

 

1

233

$48,333,245

1.2%

Chicago Tribune Company (B,C) (1)

$598,288

 

 

 

 

Graphic Communications Conference of The International Brotherhood of Teamsters National Pension Fund

 

3

110

$45,802,377

1.8%

Cenveo Corporation (1)

$357,558

 

 

 

 

Arandell Corporation (2)

$249,882

 

 

 

 

Commercial Lithographing (1)

$235,226

 

 

 

 

FELRA and UFCW Pension Plan

 

2

4

$45,682,919

99.8%

Giant Food (4)

$27,767,341

 

 

 

 

Safeway (11)

$17,837,379

 

 

 

 

Automotive Industries Pension Plan

 

3

155

$29,612,275

26.8%

United Parcel Service (25)

$3,258,933

 

 

 

 

Gillig Corporation (1)

$2,569,166

 

 

 

 

SSA Terminals (4)

$2,097,200

 

 

 

 

United Food and Commercial Workers Unions and Employers Midwest Pension Fund

4

69

$24,789,858

31.9%

Kroger (9)

$2,585,693

 

 

 

 

Schnucks (7)

$2,397,506

 

 

 

 

Strack and Van Til (1)

$1,925,364

 

 

 

 

Supervalu (6)

$1,005,790

 

 

 

 

Teamsters Employers Local 945 Pension Fund

5

30

$23,618,082

5.7%

Republic Services, Inc. (1)

$894,925

 

 

 

 

Pinto Services (1)

$118,165

 

 

 

 

T. Farese & Sons (1)

$118,165

 

 

 

 

Allegro Sanitation (1)

$115,250

 

 

 

 

Veolia Environmental Services, Inc. (1)

$94,685

 

 

 

 

National Integrated Group Pension Plan

 

2

189

$20,414,258

10.3%

IAC Mendon LLC. (1)

$1,235,179

 

 

 

 

Tri County Electric Co., Inc. (1)

$861,410

 

 

 

 

UFCW Union & Partcipating (sic) Food Industry Employers Tri-State Pension Funda

3

10

$19,725,505

96.2%

Acme (3)

$14,496,109

 

 

 

 

Superfresh (1)

$3,654,718

 

 

 

 

Pathmark (5)

$826,612

 

 

 

 

Source: CRS analysis of Form 5500 data for the 2015 plan year.

Notes: A 5% contributors is an employer which contributed more than 5% of a plan's contributions. Multiemployer plans might or might not include withdrawal liability calculations in calculating the 5% threshold for employer calculations. PBGC indicated that in the view of PBGC staff, withdrawal liability was not meant to be included in the calculations but that the issue involved other federal agencies, which were considering a possible revision to Form 5500. See American Bar Association, Joint Committee on Employee Benefits, Q&A Session with PBGC, May 9, 2012, p. Question 31, https://www.americanbar.org/content/dam/aba/events/employee_benefits/2012_pbgc_final.authcheckdam.pdf. For the purposes of this table, total plan contributions are taken from Schedule MB of Form 5500, which include withdrawal liability and required employer contributions.

a. The incorrect spelling of "Participating" is as listed by the plan. It is not corrected here because the corrected spelling would not be returned on the DOL Form 5500 search page.

Author Contact Information

[author name scrubbed], Specialist in Income Security ([email address scrubbed], [phone number scrubbed])

Footnotes

1.

In some DB plans, participants have the option to receive an actuarially equivalent lump-sum payment at retirement in lieu of the annuity. Typically, an annuity is a monthly payment for life.

2.

Multiple employer pension plans are not common. The Government Accountability Office (GAO) indicated that about 0.7% of private-sector pension plans were multiple employer pension plans. See U.S. Government Accountability Office, Federal Agencies Should Collect Data and Coordinate Oversight of Multiple Employer Plans, GAO-12-665, September 13, 2012, p. 10, at http://www.gao.gov/assets/650/648285.pdf.

3.

For additional background, see CRS Report R43305, Multiemployer Defined Benefit (DB) Pension Plans: A Primer and Analysis of Policy Options.

4.

For more about PBGC, see CRS Report 95-118, Pension Benefit Guaranty Corporation (PBGC): A Primer, or CRS In Focus IF10492, An Overview of the Pension Benefit Guaranty Corporation (PBGC).

5.

The guarantee is more than $12,870 per year for an individual with more than 30 years of service in the plan and less than $12,870 per year for an individual with less than 30 years of service in the plan. More information is available at Pension Benefit Guaranty Corporation, Multiemployer Benefit Guarantees, https://www.pbgc.gov/prac/multiemployer/multiemployer-benefit-guarantees.

6.

See Pension Benefit Guaranty Study, PBGC's Multiemployer Guarantee, March 2015, at https://www.pbgc.gov/documents/2015-ME-Guarantee-Study-Final.pdf. The study considered only reductions in benefits because of the maximum guarantee and did not consider the effect of the likely insolvency of PBGC.

7.

The average monthly benefit in terminated plans that are likely to receive PBGC financial assistance was $383.33; in plans that were projected to become insolvent within 10 years was $546.17; and in remaining, ongoing plans was $1,010.44. See Pension Benefit Guaranty Corporation, PBGC's Multiemployer Guarantee, March 2015, Figure 4, at https://www.pbgc.gov/documents/2015-ME-Guarantee-Study-Final.pdf.

8.

See Pension Benefit Guaranty Corporation, "PBGC Projections: Multiemployer Program Likely Insolvent by the End of 2025; Single-Employer Program Likely to Eliminate Deficit by 2022," press release, August 3, 2017, at https://www.pbgc.gov/news/press/releases/pr17-04. Additionally, the National Coordinating Committee for Multiemployer Plans (NCCMP) estimated that participants in 12 plans that applied for benefit reductions under MPRA would see a 53% reduction in benefits as a result of the PBGC maximum guarantee were these plans to become insolvent and receive PBGC financial assistance. The presentation did not indicate what percentage of participants in those plans would see benefit reductions. See National Coordinating Committee on Multiemployer Pensions, Multiemployer Pension Facts and the National Economic Impact, January 5, 2018, at http://nccmp.org/wp-content/uploads/2018/01/Multiemployer-Pension-Facts-and-the-National-Economic-Impact-Jan-5-2018.pdf.

9.

See 29 U.S.C. §1302 (g)(2), which states that the "United States is not liable for any obligation or liability incurred by the corporation."

10.

For example, S. 2147, the Butch Lewis Act of 2017; H.R. 4444, the Rehabilitation for Multiemployer Pensions Act; and S. 1076/H.R. 2412, the Keep Our Pension Promises Act, would provide U.S. Treasury funds to PBGC if it had insufficient resources from which to provide financial assistance to plans as required by the bills.

11.

A plan year is "a 12-month period designated by a retirement plan for calculating vesting and eligibility, among other things. The plan year can be the calendar year or an alternative period, for example, July 1 to June 30." See https://www.irs.gov/retirement-plans/plan-participant-employee/definitions.

12.

Available at https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/public-disclosure/foia/form-5500-datasets.

13.

Available at https://www.efast.dol.gov/portal/app/disseminate?execution=e1s1.

14.

These were plans that indicated on Form 5500 that they were a multiemployer plan on Part I, Line A, and that they were a DB plan in the List of Plan Characteristics Codes in Part II, Line 8a, or that they filed a Schedule MB. One plan had three filings in the data; only the most recent filing was included in this analysis.

15.

This includes the number of active participants, retired participants receiving benefits, retired or separated participants entitled to future benefits, and deceased participants whose beneficiaries are receiving or are entitled to receive future benefits.

16.

For more information on discounting liabilities in pension plans, see Appendix A of CRS Report R43305, Multiemployer Defined Benefit (DB) Pension Plans: A Primer and Analysis of Policy Options.

17.

See Pension Benefit Guaranty Corporation, Technical Update Number: 95-1, January 26, 1995, at https://www.pbgc.gov/prac/other-guidance/tu/technical-update-95-1-retirement-protection-act-1994.

18.

See Pension Benefit Guaranty Corporation, The Financial Condition of PBGC's Multiemployer Insurance Program, 2001, footnote 2, at https://www.pbgc.gov/documents/financial_condition_of_multiemployer_1201.pdf.

19.

See Pension Benefit Guaranty Corporation, 2015 Pension Insurance Data Tables, table M-11, at https://www.pbgc.gov/sites/default/files/2015-pension-data-tables.pdf.

20.

See 26 U.S.C. §432(c).

21.

See 26 U.S.C. §432(e).

22.

See https://www.pbgc.gov/documents/Projections-Report-2015.pdf.

23.

On Schedule MB of Form 5500, plans in critical status must indicate the year in which they (1) expect to emerge from critical status or (2) become insolvent.

24.

For more on withdrawal liability, see https://www.pbgc.gov/prac/multiemployer/withdrawal-liability, or Charles B. Wolf and Patrick W. Spangler, Withdrawal Liability To Multi-Employer Pension Plans Under ERISA, Vedder Price P.C., https://www.vedderprice.com/-/media/files/vedder-thinking/publications/2015/05/updates-to-withdrawal-liability-to-multiemployer-p/files/2015-withdrawal-liability-to-multiemployer-pension/fileattachment/2015-withdrawal-liability-to-multiemployer-pension.pdf.

25.

See, for example, Hazel Bradford, Groups Tackle Multiemployer Plans' Withdrawal Liability, Pensions and Investments, July 8, 2013, http://www.pionline.com/article/20130708/PRINT/307089995/groups-tackle-multiemployer-plans-withdrawal-liability; or McGuire Woods, FASB Updates Multiemployer Plan Disclosure Requirements: Estimate of Withdrawal Liability Not Required, September 28, 2011, https://www.mcguirewoods.com/Client-Resources/Alerts/2011/9/FASB-Updates-Multiemployer-Plan-Disclosure-Requirements-Estimate-of-Withdrawal-Liability-Not-Required.aspx.

26.

Attached to each Form 5500 available via search on the DOL website is the plan's audited financial statements report. Plans' financial statements sometimes report the amount of contributions from active employers and the amount of contributions that are withdrawal liability.

27.

See American Bar Association, Joint Committee on Employee Benefits, Q&A Session with PBGC, May 9, 2012, p. Question 31, https://www.americanbar.org/content/dam/aba/events/employee_benefits/2012_pbgc_final.authcheckdam.pdf.

28.

An EIN is a number issued by the IRS to identify a business entity. See Employer ID Numbers available at https://www.irs.gov/businesses/small-businesses-self-employed/employer-id-numbers.

29.

CRS examined the Schedule R data and made edits where appropriate. CRS first grouped employers based on the listed EIN. Employers that appeared on multiple Schedule Rs (e.g., they were 5% contributors in more than one plan) were sometimes spelled differently. For example, the United Parcel Service also appeared as United Parcel Services, UPS, and United Parcel Service Inc.

30.

Total contributions include both employer and employee contributions. Most contributions to multiemployer contributions are from employers. CRS analysis of the Form 5500 data indicated that among plans that filed Schedule MB, 1.7% had employee contributions in 2015. Among multiemployer DB plans that had employee contributions in 2015, employee contributions were 2.0% of the plans' total contributions.

31.

It is not possible to determine the contribution amounts of employers that contributed 5% or less of total contributions to a plan.

32.

Safeway and Albertsons merged in 2015.

33.

The Form 5500 data do not list separately contributions from withdrawal liability and required employer contributions.