In March, Milliman published a Multiemployer Alert about the funding impact that market declines related to COVID-19 have had on multiemployer defined benefit pension plans. But COVID-19's impact goes beyond the market decline.
Many industries are being hit hard by a sudden drop-off in
industry activity, with concern that the recovery of normal operation could
take several years, reducing the contributions coming into plans. These impacts
are a particular concern for mature plans (those with more benefit payments and
expenses than contributions), and may have a long-lasting impact on plan
funding. Without Congressional action or a speedy market recovery, there may be
another wave of plan failures. Lawmakers need to think carefully before
providing solutions that further strain an already stressed system.
In this Multiemployer Review, Milliman's Kelly Coffing, Tim Connor, and Nina Lantz explain in more detail how COVID-19 could leave the multiemployer pension system even more distressed.