PBGC Multiemployer Guarantee Increased
FOR IMMEDIATE RELEASE
December 26, 2000
The Consolidated Appropriations Act, 2001 was signed into law by President Clinton on Dec. 21, 2000. The Act includes a provision that more than doubles the Pension Benefit Guaranty Corporation's (PBGC) maximum benefit guarantee for workers in multiemployer pension plans. For a worker with 30 years under the plan, the maximum annual guarantee increases from $5,850 to $12,870. The legislation marks the first increase in PBGC's multiemployer guarantee since 1980.
"This is an increase we have been urging for a long time. The increase provides these hard-working men and women with true pension protection," said PBGC Executive Director David Strauss.
Multiemployer defined benefit pension plans are collectively bargained pension arrangements involving more than one unrelated employer, usually in a common industry where workers often move from job to job, such as construction and trucking. There are about 9 million workers and retirees in 1,800 multiemployer plans. Under its multiemployer insurance program, PBGC provides financial assistance to a multiemployer plan when the plan is unable to pay benefits when due. Technical Update 00-7 explains the change in law.
PBGC is a federal corporation created under the Employee Retirement Income Security Act of 1974 to guarantee payment of basic pension benefits earned by some 43 million American workers and retirees participating in more than 40,000 private-sector defined benefit pension plans. The agency receives no funds from general tax revenues. Operations are financed largely by insurance premiums paid by companies that sponsor pension plans and investment returns.>
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PBGC No. 01-15