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PBGC Finalizes Guidance on Mergers and Transfers Between Multiemployer Plans

For Immediate Release

WASHINGTON - The Pension Benefit Guaranty Corporation is issuing rules to implement its authority to facilitate mergers of multiemployer pension plans. Mergers of multiemployer plans can help protect the benefits earned by workers and retirees and extend the solvency of troubled plans. This rulemaking also updates the general rules on plan mergers and transfers.

“Although we have limited resources to address the anticipated insolvencies of multiemployer plans, facilitated mergers under this final rule could help preserve retirement benefits for workers and retirees in some struggling multiemployer plans,” said PBGC Director Tom Reeder. “Merged plans may save money from lower administration and investment expenses and provide greater stability by expanding the base of employers that contribute to the plan.”

Merger assistance is one of the few tools PBGC has to help struggling multiemployer plans but given the limited resources in PBGC’s Multiemployer Insurance Program, it does not offer a global solution to the funding crisis in the multiemployer pension system.

PBGC will publish a final rule on multiemployer plan mergers and transfers in the Federal Register on September 14, 2018, to implement procedural and informational requirements for facilitated merger requests. 

The Multiemployer Pension Reform Act of 2014 gave PBGC the authority to facilitate plan mergers under certain conditions. If, among other conditions, one or more of the plans involved in the merger is in critical and declining status (generally, plans projected to become insolvent within 20 years), PBGC may provide financial assistance for the merged plan to remain solvent. Even with limits on PBGC’s resources for multiemployer plans, facilitated mergers under this final rule will give troubled plans a chance to remain solvent.  In turn, the merged plans will help preserve participants’ benefits, which may be reduced absent a merger.

Under MPRA, the financial assistance PBGC provides to facilitate a merger cannot impair PBGC’s ability to meet its existing financial assistance obligations to other multiemployer plans.

The final regulation updates the general requirements on plan mergers and transfers of plan assets and liabilities between multiemployer plans. Provisions relating to plan solvency requirements may be addressed in a later rulemaking to allow for more consideration of public comments received on the proposed regulation.

In May, PBGC announced that its insurance program for multiemployer plans continues to face insolvency by the end of fiscal year 2025, according to findings in the FY 2017 Projections Report. The likelihood that the Multiemployer Program will run out of money before the end of FY 2025 has grown to over 90 percent, and there remains a significant chance the program will run out of money during FY 2024. The Multiemployer Insurance Program covers over 10 million people.

About PBGC:

PBGC protects the pension benefits of nearly 40 million Americans in private-sector pension plans. The agency operates two separate insurance programs — one covering pension plans sponsored by a single employer and another covering multiemployer pension plans, which are sponsored by more than one employer and maintained under collective bargaining agreements. PBGC is currently responsible for the benefits of about 1.5 million people in failed pension plans. PBGC receives no taxpayer dollars. Its operations are financed by insurance premiums, investment income, and, for the single-employer program, assets and recoveries from failed single-employer plans. For more information visit

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