Multiemployer Pensions and the American Rescue Plan Act of 2021: A Progress Report

Abstract

At the end of FY 2020, there were 1369 multiemployer (“union”) pension plans in the United States with almost 10.9 million participants. However, the structure of those participants had changed drastically. By FY 2018, only 36.4% were active members for whom employers made contributions. A total of 66.6% were either retired and collecting retirement benefits or separated-vested former employees entitled to future benefits. Multiemployer pension plans in the private sector of the United States were in trouble. The American Rescue Plan Act of 2021 allocated $97 billion to about 250 troubled multiemployer plans with three million participants for Special Financial Assistance (SFA). Thus far 21 plans with 123,375 participants have been approved to receive $502.9 from transfers from the U.S. Treasury Department. The remainder of the allocation is to be distributed by 2030. This paper examines this important development and its implications.