1/7/2015 – New law allows cuts in multiemployer pensions (MarketWatch)

When President Obama signed the omnibus budget and spending bill in December 2014, he also signed into law sweeping changes, through the Multiemployer Pension Reform Act of 2014, to private sector multiemployer plans. (The pension-reform measure was folded into the larger omnibus bill.) The most controversial proposal in the pension act allows deeply troubled multiemployer plans to suspend—read “cut”—benefit payments to retirees and accrued benefits for participants.

Multiemployer defined benefit plans, which are created by bargaining agreements between a labor union and two or more employers, cover about 10 million unionized participants. These plans expanded benefits during the stock market boom in the 1990s and then lost substantial assets in the wake of two financial crises after the turn of the century. In addition, many plans are in industries—such as construction—hurt by the prolonged recession, or in others such as trucking that face a shrinking pool of unionized workers.

Read the full article in MarketWatch.