Multi-Employer Plan Funding Notices
Request for Information
On January 11, 2006 the Department of Labor issued final regulations on new funding notices for multiemployer pension plans. Congress passed the Pension Funding Equity Act of 2004 requiring plan administrators of multiemployer defined benefit plans to give workers and retirees certain information about the status of their plans’ funding each year. The new regulation specifies what must be included in the notices.
The notice must be sent within nine months after the close of the 2005 “plan year” (For many plans this date will be September 31, 2006), and must contain the following information:
- The name of the plan along with contact information and information identifying the plan and the plan sponsor.
- The actual percentage of the plan’s funded current liability
- The market value of the plan’s assets.
- The amount of benefit payments for the plan year to which the notice relates, along with the ratio of the assets to the payments.
- A summary of the rules governing insolvent multiemployer plans including benefit limitations, reductions, and suspensions.
- Description of the PBGC’s guarantees of the plan and the limitation of the PBGCs guarantee
These notices must be written so as to be understood by the average plan participant. The following are entitled to receive the notice:
- Every participant covered by the plan.
- Every beneficiary receiving benefits
- Every labor organization representing plan participants
- Every employer that is a party to the collective bargaining agreement which establishes or maintains the plan
- The Pension Benefit Guaranty Corporation
The notices may be distributed to workers in a number of formats, but commonly they are included in company or union newsletters.
Read the final rule [PDF]