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EPPRA’s Impact on Healthy Pension Plans



In March 2021, the Butch Lewis Emergency Pension Plan Relief Act of 2021 (EPPRA) was signed into law by President Biden. Commentary on the legislation has mainly focused on the law’s effects on underfunded multiemployer pension plans, as eligible plans can receive a lump sum of financial assistance without any repayment obligation from a newly created PBGC fund. While it will have a more minimal impact on plans that are not nearing insolvency, EPPRA’s effects should still be on the radar for healthy plans.


PBGC Multiemployer Insurance Program premiums will increase after December 31, 2030. Before EPPRA, the premium was set to $31 per participant for plan year 2021 and would increase with average wages in future years. Under this system, the Congressional Budget Office projected the rate would be $44 for plan year 2031. However, EPPRA now mandates that the rate increase to $52 per participant for plan year 2031, then increase with wages thereafter.


Further, the Congressional Budget Office previously estimated that the Multiemployer Insurance Program of the PBGC would be insolvent in 2027. Because EPPRA now allows struggling plans to rely on grants to remain solvent, there will be less pressure on the PBGC to provide benefits to beneficiaries of failing plans. As a result, the Congressional Budget Office now estimates that the Multiemployer Insurance Program will remain solvent until mid-2040.


While healthy plans will hopefully not need to rely on the PBGC, a stable PBGC is a welcome safety net to all pension plans.

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