A new report details the stresses to which multiemployer defined benefit pension plans(MEPPs) are subject, and analyzes how much effect eachdifferent type has on plans that are healthy and plans that mightnot be so healthy.

The Society of Actuaries released its report “Multiemployer PlanStress Metrics,” which looks at data it says are two keymetrics:

  • Previous Benefit Cost (PBC)

  • Previous Benefit Cost Factor (PBCF)

PBC “measures the annualized cost per current active participantto pay off a plan’s unfunded liability,” the report said, addingthat it is “calculated by dividing a plan’s unfunded liabilityamortized over 15 years by the number of active participants in theplan.”

PBCF, which completes the picture, “fills the gaps left by thePBC. It compares the annual cost of paying off unfunded liabilitiesto the cost of funding the current year’s benefit accruals.”

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