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Cromnibus Law Passes: The Effect on Multiemployer Pension Plans

Cromnibus Law Passes: The Effect on Multiemployer Pension Plans

Earlier this week, the Multiemployer Pension Reform Act of 2014 (MPRA) was passed as part of the Consolidated and Further Continuing Appropriations Act of 2015 (also known as the Continuing Resolution/omnibus spending bill or “Cromnibus” bill).

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The most significant provision of the MPRA for multiemployer plans is that it allows trustees of pension plans in critical or declining status to adjust vested benefits.  Critical and declining status is defined as “critical plans that are projected to become insolvent during the current plan year or the next 14 plan years (or 19 years if the plan has a ratio of inactive to active participants that exceeds 2 to 1 or if the funded percentage of the plan is less than 80%).”

The MPRA has potential implications for both current and future retirees, given the fact that the law states that plans in “critical or declining status” can temporarily or permanently suspend future as well as current benefits.  Proponents of the measure maintain that it enables distressed plans to avoid bankruptcy and termination.

There are a number of other provisions to the measure, which Lindquist LLP will continue to evaluate and monitor.  Stay tuned for more information.

Contact Lindquist LLP’s Managing Partner Barry T. Omahen, CPA, with questions.  He can be reached at (925) 277-9100.

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