Legislation Introduced to Aid Struggling Defined Benefit Plans
House Ways and Means Committee Chairman Richard Neal (D-MA) has introduced in the initial days of the 117th Congress the Emergency Pension Plan Relief Act (EPPRA) of 2021. Rep. Neal has previously introduced legislation to aid struggling defined benefit pension plans, including the Rehabilitation for Multiemployer Pensions Act—also known as the Butch Lewis Act—during the 116th Congress. EPPRA has some features in common with that legislation.
EPPRA has limited provisions addressing the solvency of single employer defined benefit pension plans. They include allowing certain single employer plan funding shortfalls to be amortized over 15 years instead of 7 years and extending pension funding stabilization percentages for single employer pension plans.
Among EPPRA’s multiemployer pension plan provisions are the following.
- Expand existing Pension Benefit Guaranty Corporation (PBGC) authority to allow the agency to provide financial assistance to certain qualifying plans that are in critical or declining status, to help them maintain solvency and provide benefits.
- Following enactment, deny new approvals for plans seeking to suspend benefits under the Multiemployer Pension Reform Act.
- Delay future designations of multiemployer plans as being in endangered, critical, or critical-and-declining status, in order to provide flexibility and ease administrative burdens during the coronavirus (COVID-19) public health crisis.
- Provide certain multiemployer plans in endangered or critical status an extension of their rehabilitation periods, giving them additional time to improve contribution rates, limit benefit accruals, and maintain plan funding.
- Allow plans that experienced investment losses in 2019 and 2020 to amortize such losses over an extended period of time.
- Double certain PBGC benefit guarantees for multiemployer plan participants and beneficiaries.