In general, pension plans are a form of deferred compensation: workers do not receive income when it is earned but rather receive that income in the future. The Internal Revenue Code (IRC) provides tax advantages to certain deferred compensation schemes: rather than including such compensation in taxable income when it is earned, the compensation is included in taxable income when it is received by the individual (presumably, in retirement). Pension plans may be classified according to whether they are (1) defined benefit (DB) or defined contribution (DC) plans and (2) sponsored by one or more than one employer. With DB plans, participants receive regular monthly benefit payments in retirement (which some refer to as a "traditional" pension). With DC plans, of which the 401(k) plan is the most common, participants have individual accounts that are the basis of income in retirement. The plans that are the subject of this report are DB plans. Pension plans are also classified by whether they are sponsored by one employer (single-employer plans) or by more than one employer (multiemployer and multiple employer plans). Multiemployer pension plans are sponsored by more than one employer (often, though not required to be, in the same industry) and maintained as part of a collective bargaining agreement. Multiple employer plans are sponsored by more than one employer but are not maintained as part of collective bargaining agreements. The plans that are the subject of this report are multiemployer plans. Multiemployer DB pensions are of current concern to Congress because approximately 10% to 15% of participants are in plans that may become insolvent. When a multiemployer pension plan becomes insolvent, the Pension Benefit Guaranty Corporation (PBGC) provides financial assistance to the plan so the plan can continue to pay benefits up to the PBGC guaranteed amount. With plans that receive PBGC financial assistance, there is a statutory maximum benefit that the plan can provide, currently equal to $12,870 per year for an individual with 30 years of service in the plan. The guarantee is not adjusted for changes in the cost of living. Using 2013 data, PBGC estimated that 79% of participants in multiemployer plans that were receiving financial assistance receive their full benefit (e.g., their benefits were below the PBGC maximum guarantee). Among participants in plans that were terminated and likely to need financial assistance in the future, 49% of participants have a benefit below the PBGC maximum guarantee, and 51% have a benefit larger than the PBGC maximum guarantee. Among ongoing plans (neither receiving PBGC financial assistance nor terminated and expected to receive financial assistance), the average benefit is almost twice as large as the average benefit in terminated plans. This suggests that a larger percentage of participants in plans that receive PBGC financial assistance in the future are likely to see benefit reductions as a result of the PBGC maximum guarantee level. PBGC estimates that in the future it will not have sufficient resources from which to provide financial assistance for insolvent plans to pay benefits at the PBGC guarantee level. Most participants would receive less than $2,000 per year because PBGC would be able to provide annual financial assistance equal only to its annual premium revenue, which was $291 million in FY2017. There is no obligation on the part of the federal government to provide financial assistance to PBGC, although some policymakers have stated that some form of federal assistance to PBGC might be necessary to ensure that participants' benefits are not reduced to a fraction of their promised benefits. CRS analyzed public-use Form 5500 data from the Department of Labor (DOL) for the 2015 plan year, the most recent year for which complete data are available. Most private-sector pension plans are required to annually report to the Internal Revenue Service (IRS), DOL, and PBGC information about the plan, such as the number of participants, financial information, and the companies that provide services to the plan. In addition to Form 5500, pension plans are generally required to file additional information in specific schedules. For example, most multiemployer DB plans are required to file Schedule MB, which contains information specific to multiemployer DB plans, such as the zone status of the plan (described below). Each pension plan's Form 5500 and required schedules are available by search on DOL's website. The public-use Form 5500 data included 1,363 plans that indicated they were multiemployer DB pension plans for the 2015 plan year. These plans had 10.8 million participants. The analyzed data in this report consider only multiemployer DB pension plans that filed Schedule MB for the 2015 plan year. Not all multiemployer DB pension plans file Schedule MB. For example, some plans that received PBGC financial assistance or had experienced a withdrawal of all employers in the plan (but which were still paying benefits to retired participants) did not file Schedule MB in 2015. In the public-use Form 5500 data, 1,267 plans with 10.7 million participants filed Schedule MB in 2015. Among participants in these plans that filed Schedule MB in 2015 about 38.3% were active participants (working and accruing benefits in a plan); about 28.5% were retired participants (currently receiving benefits from a plan); about 27.5% were separated, vested participants (not accruing benefits from a plan, but owed benefits and will receive them at eligibility age); and about 5.7% were deceased participants whose beneficiaries are receiving or are entitled to receive benefits. In 2015, multiemployer DB plans that filed Schedule MB had $477.7 billion in assets and owed participants $1,038.0 billion in benefits, resulting in total underfunding of $560.3 billion. The value for liabilities used in this report is the current liability value (also called the RPA '94 [for Retirement Protection Act of 1994], passed as part of the Uruguay Round Agreements Act [ P.L. 103-465 ]) on Schedule MB. Plans report two values of liabilities: the actuarial value and the RPA '94 liability. The main difference is the value of the discount rate that is used to value plan liabilities. The actuarial valuation of liabilities typically discounts them using the expected return on assets. The RPA '94 valuation of liabilities discounts them using a lower rate, based on interest rates on 30-year Treasury securities. The RPA '94 valuation method results in a higher valuation of plan liabilities compared to the actuarial valuation method. Among plans that filed Schedule MB in 2015, the median RPA '94 rate was 3.51%, and the median rate used to calculate the actuarial value of liabilities was 7.5%. The discount rate used by PBGC is based on a survey of insurance annuity prices and is closer to the RPA '94 rate. For example, the PBGC for discounting multiemployer plan liabilities in 2014 (the most recent year available) was 3.54%. Among the 1,267 multiemployer plans in 2015 that submitted Schedule MB, 1,246 were underfunded (owed more in future benefits than had in current assets), 17 plans were overfunded (had more in assets than owed in future benefits), and 4 plans did not report any assets or liabilities. The Pension Protection Act of 2006 (PPA; P.L. 109-280 ) required that multiemployer plans that meet specified financial criteria must report to the IRS their financial condition as being in one of several categories. The categories are described in Table 1 . Table 2 lists the number of plans, participants, and total underfunding in each zone for the 2015 plan year. Plans that are in endangered or seriously endangered status must adopt a funding improvement plan. A funding improvement plan is a range of options (such as increased contributions and reductions in future benefit accruals) that, when adopted, will reduce a plan underfunding. The reduction in underfunding is by 33% during a 10-year funding improvement period (for plans in endangered status) or by 20% during a 15-year funding improvement period (for plans in seriously endangered status). Plans in endangered or seriously endangered status cannot increase benefits during the funding improvement period. Plans in critical status must adopt a rehabilitation plan. The rehabilitation plan is a range of options (such as increased employer contributions and reductions in future benefit accruals) that, when adopted, will allow the plan to emerge from critical status during a 10-year rehabilitation period. If a plan cannot emerge from critical status by the end of the rehabilitation period using reasonable measures (referred to as a plan that has exhausted reasonable measures, or an ERM plan), it must either install measures to (1) emerge from critical status at a later time (after the end of the rehabilitation period) or (2) forestall insolvency. Plans in critical status may not increase benefits during the rehabilitation period. In Table 2 , plans that are in critical status are classified by whether (1) they are projected to emerge from critical status within the rehabilitation period, or (2) they indicated that they have exhausted reasonable measures and would not emerge from critical status within the rehabilitation period and that the rehabilitation plan is designed to forestall insolvency. Some of the ERM plans are likely to become insolvent, although they do not meet the definition of being in critical and declining status. CRS analysis of 2015 Form 5500 data reported in Table 2 indicated the following: Green Zone: Eight hundred plans were in the green zone. These plans covered 5.8 million participants (55.9%). Endangered or Seriously Endangered: One hundred fifty-six plans were either endangered or seriously endangered. These plans covered 1.2 million participants (11.6%). Critical: Two hundred fifteen plans were in critical status. These plans covered 2.2 million participants (21.3%). One hundred forty-five plans were in critical status but were expected to emerge from critical status by the end of the rehabilitation period. Seventy of the 215 plans in critical status do not expect to able to emerge from critical status by the end of the rehabilitation period and will remain in critical status past the end of the rehabilitation period (or indefinitely), or possibly become insolvent. Critical and Declining: Eighty-three plans were in critical and declining status. These plans covered 1.2 million participants (11.3%). As noted above, data from Schedule MB of Form 5500 for the 2015 plan year showed that 83 plans indicated that they were in critical and declining status and expected to become insolvent. As part of their Form 5500 filings, multiemployer plans that are in critical and declining status must indicate the year in which they expect to become insolvent. Table 3 lists by year of expected insolvency the number of pension plans and participants in critical and declining status. The table also contains the dollar amount of benefits the plans paid in 2015. The amount of benefits paid on a yearly basis at insolvency is likely to be different compared to the amount reported for 2015, particularly for plans with an insolvency year many years in the future. However, this information provides context on the scale of the problem. In addition, because of the maximum guarantee, some participants would likely not receive 100% of the benefits earned under the plan. As noted above, PBGC estimated that 51% of participants in plans that are currently terminated and are likely to receive PBGC financial assistance in the future would likely see their benefits reduced because of the PBGC maximum guarantee. An additional 70 plans had exhausted reasonable measures and would either be unable to emerge from critical status or become insolvent. These plans are not included in the analysis of Table 3 . Plans with 75,000 or more participants, which were the 25 largest multiemployer DB pension plans (by the number of participants) in the 2015 plan year, are listed in Table 4 . For each plan, the table contains the number of participants, the zone status in 2015, the funded percentage, the amount of underfunding in the plan, and the amount of expected payments in the 2015 plan year. In total, these plans have 4.7 million participants, which is 44.4% of participants in multiemployer plans that filed Schedule MB in 2015. Some employers participate in more than one multiemployer DB pension plan, and the insolvency of one plan in which a particular employer participates could have implications for the other plans in which that employer also participates. For example, an employer that leaves a multiemployer plan generally has to pay withdrawal liability, which is the employer's share of unfunded benefits in that plan. An employer that withdraws from a plan may be required to acknowledge the withdrawal liability in its financial statements, potentially affecting the employer's access to credit and its financial health. Other multiemployer plans to which an employer is a large contributor could be affected if that employer is forced to withdraw from those plans because of financial difficulties. Schedule R, Part V, Line 13 of Form 5500 requires multiemployer DB plans to list employers that contribute more than 5% of that plan's total contributions (referred to in this report as "5% contributors"). Employer contributions listed in Form 5500 include (1) regular employer contributions (for employers with active participants in the plan) and (2) employer withdrawal liability (for employers that have withdrawn from the plan). For the purposes of calculating the 5% threshold, it is unclear whether plans should include withdrawal liability in the calculations. PBGC indicated that its staff's view was that withdrawal liability should not be included in the calculations and that other agencies were considering the issue in possible revisions to Form 5500. In addition to the employer's name, the form lists each employer's Employer Identification Number (EIN) and dollar amount contributed. Of the 1,363 multiemployer plans, 1,163 plans indicated that they had at least one 5% contributor in 2015. Among plans with at least one 5% contributor, the median number of 5% contributors was four. Table 5 lists employers whose contributions as 5% contributors totaled $25 million or more in 2015. Note that an employer's total contributions to all of the multiemployer plans to which it contributed could have been larger than the amount listed in Table 5 if the employer contributed to additional plans, but whose contributions to those other plans were less than 5% of a plan's total contributions. The United Parcel Service (UPS) is the largest 5% contributor in terms of the dollar amount of contributions as a 5% contributor. A number of grocery chains contributed at least $25 million as 5% contributors: Kroger, Stop and Shop, Safeway, and Albertsons are among the 10 largest 5% contributors (as ranked by contributions as 5% contributors). Table 6 lists the 5% contributors in the 12 largest multiemployer DB plans that are in critical and declining status (ranked by the amount of total contributions to the plan for the 2015 plan year) and the number of plans in which each employer is a 5% contributor. Table 6 also lists the amount of the employer's contributions, the total number of contributing employers to the plan, the total amount of contributions to the plan, and the amount of contributions from 5% contributors as a percentage of total plan contributions. Total plan contributions include both required employer contributions and withdrawal liability, although plans might not include withdrawal liability payments when determining 5% contributors.

Summary:
Multiemployer defined benefit (DB) pension plans are pensions sponsored by more than one employer and maintained as part of a collective bargaining agreement. With DB pensions, participants receive a monthly benefit in retirement that is based on a formula. With multiemployer DB pensions, the formula typically multiplies a dollar amount by the number of years of service the employee has worked for employers that participate in the DB plan. Some DB pension plans have sufficient resources from which to pay their promised benefits. But, as a result of a variety of factors--such as changes in the unionized workforce and the 2007 to 2009 recession--many multiemployer DB plans are likely to become insolvent over the next 20 years and run out of funds from which to pay benefits owed to participants. The Pension Benefit Guaranty Corporation (PBGC) is a U.S. government agency that insures the benefits of participants in private-sector DB pension plans. Although PBGC is projected to have sufficient resources to provide financial assistance through 2025 to smaller multiemployer DB plans, the projected insolvency of large multiemployer DB pension plans would likely result in a substantial strain on PBGC's multiemployer insurance program. In a report released in June 2017, PBGC indicated that the multiemployer insurance program is highly likely to become insolvent by 2025. In the absence of increased financial resources for PBGC, participants in insolvent multiemployer DB pension plans would likely see sharp reductions in their pension benefits. This report's data are from the public use file of the Form 5500 annual disclosure for the 2015 plan year (the most recent year for which complete information is available). Nearly all private-sector pension plans (including multiemployer DB plans) are required to file Form 5500 with the Internal Revenue Service (IRS), the Department of Labor (DOL), and PBGC. The Form 5500 information includes breakdowns on the number of plan participants, financial information about the plan, and details of companies providing services to the plan. Multiemployer DB plans specifically are required to report their financial condition as being in one of several categories (referred to as the plan's "zone status"). The insolvencies of these plans could affect the employers that contribute to multiemployer plans. For example, an employer in a plan that becomes insolvent plan might have to recognize the total amount of its future obligations to the plan, which could affect the employer's access to credit and, potentially, its participation in other multiemployer plans. This report provides data on multiemployer DB plans categorized in several ways. First, the report categorizes the data based on plans' zone status in 2015. Next, it provides a year-by-year breakdown of the number of plans that are expected to become insolvent and the number of participants in those plans. It then provides information on the 25 largest multiemployer DB plans in 2015 (each plan has at least 75,000 participants). Finally, the report provides data on those employers whose plans indicate they contributed more than 5% of the plans' total contributions (referred to in this report as "5% contributors") in the 2015 plan year. It lists (1) the 5% contributors whose total contributions to multiemployer plans were at least $25 million and (2) the 5% contributors in the 12 largest multiemployer plans (as ranked by total contributions to the plan) that are in critical and declining status.