a is s u e br i e f - american academy of actuaries.pdfVIP

A I S S U E B R I E F Ja n u a ry 2 0 0 5 A M E R I C A N A C A D E M Y of A C T U A R I E S Principles of Pension Funding Reform for Multiemployer Plans Def i n e d ben ef it p ension p lans are an imp o rtant sou rce of reti rem ent income to the Am erican wo rker, and they p rovi d e g u a ra n te ed lif etime p ension ben ef i t s . Def i n e d ben ef it p ension p lan sp o n so rs are of t h ree basic typ es: p riva te se ctor sin- g l e - em pl oy er p lans covering em pl oyees at a s ing le co m pa ny, p u blic s e ctor p ension p lans t hat c over g overn m ent em pl oy- e e s , and mu l ti em pl oy er p lans t hat c over e m pl oye es w ithin a n i ndu s try or t ra d e . The v a ri ous typ es of s po n so red p en s i o n p lans have i mp o rtant d iff eren ce s . This issue bri ef f o c u ses on t he u nique n eeds of mu l ti em pl oy er def i n e d b en ef it p en s i o n p lans under p ension f unding ref o rm . A cco rding to the Pension Ben ef it Gu a ra n ty Co rp o ra tion (PB GC), the U. S . f ed eral agency that insu res p en s i o n ben ef i t s , in 20 03, mu l ti em pl oye r def i n e d b en ef it p ension p lans covered 9 .7 million p a rti ci pa n t s . T h ere a re a bout 1,600 mu l ti em pl oyer p ension p lans i n t he Un i ted St a te s . Typ i c a l ly, the p lans c over e m pl oyees in an indu s try or t rade i n a g e o- g rap hic are a , or a g roup of rel a ted occ u pa tions that is rep re sen ted by the same union. D ue to their diff erent ch a ra cteri s ti cs , the reg u l a t o ry s tru c