Multiemployer Plan

In Detail

Multiemployer pension plans, also called Taft-Hartley plans, are collectively bargained retirement plans that cover workers across multiple employers in the same industry. They are most common in industries with mobile workforces like construction, trucking, mining, entertainment, and retail. Roughly 1,400 multiemployer plans cover about 11 million workers and retirees. These plans allow workers to change employers within the industry while continuing to build retirement benefits under a single plan.

However, multiemployer plans face unique financial challenges. When one participating employer goes bankrupt, its pension obligations shift to the remaining employers, creating a cascading effect. If enough employers withdraw, the plan can enter a "death spiral" where each departure increases costs for remaining employers. About 130 multiemployer plans covering 1.3 million participants were classified as "critical and declining" status before the American Rescue Plan Act of 2021 provided emergency assistance.

Multiemployer plans have different PBGC guarantee levels than single-employer plans — the maximum guarantee is significantly lower, at roughly $12,870 per year for a participant with 30 years of service, compared to $81,000 for single-employer plans.