The Center for Retirement Research at Boston College has produced a brief in which it promotes the idea that the Pension Benefit Guarantee Corp. be allowed to adopt orphaned pension accounts in multiemployer plans as a way to head off its insolvency.
By "partitioning" orphaned employees of businesses that have willfully left their MEP, or done so through bankruptcy, underfunded plans could shed some of their pension obligations. With fewer distressed MEPs to worry about, the PBGC could then stave off its own financial woes.
The Center for Retirement Research brief suggested that orphaned participants account for as much as 20 percent of the liabilities in MEPs. One particularly troubled plan pays 40 percent of its benefits to orphaned participants.
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