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.