Private Sector Multiemployer Pension Plans – A Primer

Alicia H. Munnell Jean-Pierre Aubry

IB#14-13

The brief’s key findings are:

  • Private sector multiemployer pension plans, which are negotiated by a union with a group of employers, have become a focus of congressional interest.
  •  Multiemployer plans have been hurt by an expansion of benefits during the 1990s and the twin financial crises since 2000.
  •  Most are recovering, but a substantial minority faces serious funding problems.
  •  These problems are exacerbated by unique structural challenges:
    • the cyclical nature of the construction industry, which covers the most plan participants;
    • a low ratio of active to total participants that increases the burden on underfunded plans; and
    • insufficient penalties for employers who withdraw from the plans.