According to a New York Times article, the next land mine to blow up in the pension world could be the pooled multiemployer plans used by unions. The Congressional Budget Office estimates that the federal multiemployer pension insurance pool could run out of money in seven years, causing some firms to start cutting back on some benefits and eliminating others.
Pooled multiemployer plans were thought to be safer than single pension plans because the risk was spread out, meaning that there is less insurance than for private pensions. But with an aging workforce, the decline of unions, deregulation and volatile markets, many of the 10 million people covered by multiemployer plans could be at risk. And with this kind of outlook, why would any new companies join one, with healthier companies like UPS bailing?
Couple the looming multiemployer plans crisis with the growing deficits of state and municipal DB plans, and the picture looks pretty bleak.
