The Center for Retirement Research at Boston College has produced a brief in which it promotes the idea that the Pension Benefit Guarantee Corp. be allowed to adopt orphaned pension accounts in multiemployer plans as a way to head off its insolvency.
By "partitioning" orphaned employees of businesses that have willfully left their MEP, or done so through bankruptcy, underfunded plans could shed some of their pension obligations. With fewer distressed MEPs to worry about, the PBGC could then stave off its own financial woes.
The Center for Retirement Research brief suggested that orphaned participants account for as much as 20 percent of the liabilities in MEPs. One particularly troubled plan pays 40 percent of its benefits to orphaned participants.
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Nick Thornton
Nick Thornton is a financial writer covering retirement and health care issues for BenefitsPRO and ALM Media. He greatly enjoys learning from the vast minds in the legal, academic, advisory and money management communities when covering the retirement space. He's also written on international marketing trends, financial institution risk management, defense and energy issues, the restaurant industry in New York City, surfing, cigars, rum, travel, and fishing. When not writing, he's pushing into some land or water.
