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Committee Chairmen Introduce Multiemployer Pension Plan Reform in House

On January 21, Representative Neal (D-MA), Chair of the House Ways and Means Committee, and Representative Scott (D-VA), Chair of the House Education and Labor Committee, introduced nearly identical bills, curiously each named the “Emergency Pension Plan Relief Act of 2021” (EPPRA), into the committees they chair. We previously wrote about the single employer plan funding relief provisions of the bills. Here we cover the key multiemployer plan provisions of the bills, particularly from the standpoint of contributing employers.


To review, for those less familiar with multiemployer pension plans, these are plans subject to collective bargaining to which often large numbers of employers contribute. Rather than negotiating specific benefits, what employers and unions negotiate are levels of contributions. At least theoretically based on the levels of benefits that those contributions can support, the trustees of the plan (these trustees are divided equally among management and labor) determine the benefits that will be accrued under a plan. 

Particularly important for contributing employers, there are several key differences (from single employer pensions) for multiemployer pensions, including:

  • Multiemployer pensions are insured by a separate PBGC fund from the one that is used for single-employer plans, and while the single-employer plan is currently well-funded, the multiemployer fund is projected to run out of money in just a few years;
  • When multiemployer pension funds have a low funded status, i.e., plan assets are small compared to plan liabilities, employers may be required to make additional contributions under a “rehabilitation plan” or “funding improvement plan;” and
  • If an employer chooses to withdraw from an underfunded multiemployer pension, it may owe the fund a withdrawal liability for its share of the underfunded amount.


The multiemployer plan provisions of EPPRA focus on preserving the currently failing multiemployer pension system. While the Scott version of the bill includes certain provisions related to funding relief where shortfalls are due to COVID, the most significant proposed change (included in both bills) would be a new partition program. As we see it, the partition program seeks to achieve three main goals:

  • Improve the funded status of certain multiemployer pensions by partitioning off a portion of those plans to the PBGC;
  • Save the multiemployer fund of the PBGC with a bailout aimed at those partitions from the General Fund of the US Treasury; and
  • Save a remaining, better funded and therefore more stable multiemployer pension fund system, encouraging greater employer participation in these funds and with it, creation of more union jobs.

EPPRA partition

Multiemployer plans that would be eligible for partitioning through 2024 would be those in critical and declining status, those with significant underfunding and at least 50% more retirees than actives, those that have suspended benefits, and certain plans that have already become insolvent. The PBGC would then have the ability to partition off enough of the liabilities so that the remaining plans would be projected to remain solvent and well-funded for 30 years. When done, all previously suspended benefits would be required to be restored. However, and this is important for contributing employers, withdrawing employers would still be assessed withdrawal liability on their share of the underfunding included in the partitioned off liabilities.

This is an expensive provision. Essentially, it will place with the PBGC likely hundreds of billions of dollars in unfunded liabilities. But, both bills provide that the Treasury is to provide the PBGC with amounts to cover those unfunded liabilities and that such amounts are to come from Treasury’s General Fund. So, in essence, while the path to getting there is a bit circuitous, this is effectively a bailout.

Other provisions

Other provisions of these bills that will affect the funds, but are of less consequence in our view to contributing employers, include repeal of previous benefit suspensions under the Multiemployer Pension Reform Act (MPRA) for critical and declining plans, temporary suspension of zone status designation, temporary extension of the rehabilitation and funding improvement plan periods for plans in critical and declining status, increase in the PBGC guarantee for plan participants, and certain changes to the Funding Standard Account rules.


Unlike other recent efforts to save the multiemployer pension system, this one appears to have a significant chance of passage. Representative Neal has urged House Speaker Pelosi to incorporate his bill (and presumably would accept Representative Scott’s as an alternative) in any COVID-relief legislation. 

And, unlike with other recent efforts, the federal government is now in a position where the White House and both Houses of Congress are controlled by the same party (Democrats). In particular, the Biden Administration has made the creation of “good-paying union jobs” a high priority.

As these bills move, we will continue to follow them from the standpoint of contributing employers.

What to Read Next

House Committee Chairmen introduce single employer funding relief

On January 21, 2021, Congressman Neal (D-MA), Chairman of the House Ways and Means Committee, and Congressman Scott (D-VA), Chairman of the House Education and Labor Committee, introduced single employer plan funding relief proposals. Both bills are titled the “Emergency Pension Plan Relief Act of 2021.”