NYT: Thought Secure, Pooled Pensions Teeter and Fall (more than one million people will lose theirs)

http://dealbook.nytimes.com/2014/04/12/thought-secure-pooled-pensions-teeter-and-fall/?_php=true&_type=blogs&_php=true&_type=blogs&partner=EXCITE&ei=5043&_r=1&

By MARY WILLIAMS WALSH APRIL 12, 2014, 11:20 AM



Chang W. Lee/The New York Times
Carol Cascio received a letter saying that her husband’s pension plan had been “terminated by mass withdrawal.”


The pensions of millions of Americans are being threatened because of trouble in a part of the retirement world long considered so safe that no one gave it a second thought.

The pensions belong to people in multiemployer plans — big pooled investment funds with many sponsoring companies and a union. Multiemployer pensions are not only backed by federal insurance, but they also were thought to be even more secure than single-company pensions because when one company in a multiemployer pool failed, the others were required to pick up its “orphaned” retirees.

Today, however, the aging of the work force, the decline of unions, deregulation and two big stock crashes have taken a grievous toll on multiemployer pensions, which cover 10 million Americans. Dozens of multiemployer plans have already failed, and some giant ones are teetering — including, notably, the Teamsters’ Central States pension plan, with more than 400,000 members.

In February, the Congressional Budget Office projected that the federal multiemployer insurer would run out of money in seven years, which would leave retirees in failed plans with nothing.

FULL story at link.