5500 Preparer's Manual for 2012 Plan Years
The premier resource in the field of Form 5500 preparation, 5500 Preparer's Manual will help you handle the required annual Form 5500 filings for both pension benefits and welfare benefit plans.
from Spencer’s Benefits Reports: The Pension Benefit Guaranty Corporation (PBGC) on May 26 announced that the Chicago Truck Drivers, Helpers & Warehouse Workers Union (Independent) Pension Fund, a multiemployer pension plan based in Chicago, Ill., has been divided into two separate plans. The agency’s action, effective July 1, extends the solvency of the Chicago truckers’ plan, and preserves full benefits for about 3,700 workers and retirees of non-bankrupt trucking firms that contribute to the plan.
Another 1,500 current and former employees of bankrupt trucking firms will be shifted into a newly created multiemployer plan that will receive about $4 million annually in financial assistance from the PBGC. Retirees in the new plan will receive benefits according to the limits set by federal pension law. Individuals who retire after 30 years of service may be eligible for a guaranteed benefit of up to $12,870.
The PBGC approved the move because without partition, the Chicago plan may have become insolvent in 2013, and federal benefit limits would have applied to all its retirees. Partition of the plan may delay insolvency to 2019 or later.
The Chicago plan’s administrator applied for partition because the plan was running out of money to pay benefits. The shortfall resulted from the bankruptcy and withdrawal from the plan of 52 contributing employers from 1982 to 2004, which reduced the plan’s funding levels.
Federal pension law allows the PBGC to partition multiemployer pension plans in cases where a significant number of contributing employers have filed for bankruptcy, the plan is likely to become insolvent in the near future, and to reduce the risk of plan insolvency.
The Chicago plan was created in February 1955 and currently has 57 contributing employers, not including the 52 employers that have withdrawn from the plan because of bankruptcy. According to plan documents, the Chicago plan’s contributing employers, mostly trucking concerns, were heavily affected by the recession in the late 1990s, which forced a significant number of companies to withdraw from the fund or file for bankruptcy protection and cease operation.
In June, the Chicago plan’s administrator will send letters explaining the change to workers and retirees in the new plan. Currently the PBGC gives assistance to 42 insolvent multiemployer plans, which cover approximately 94,000 participants.
For more information, visit http://www.pbgc.gov/.
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