MEPATs

MEPATs, or Multiemployer Pension Plans, are retirement plans sponsored by more than one employer, typically established through collective bargaining agreements between labor unions and employer associations. These plans pool the assets contributed by multiple employers to provide retirement benefits for their participating employees. The primary advantage for employers is the sharing of administrative costs and investment risks, while employees benefit from the security of a larger, diversified pension fund and the portability of their benefits if they change jobs within the same industry or union.

The administration of MEPATs is typically overseen by a joint board of trustees, composed of equal representation from labor and management. This board is responsible for setting investment policies, managing the plan's assets, and ensuring compliance with federal regulations such as the Employee Retirement Income Security Act (ERISA). Contributions to MEPATs are usually determined by a formula based on hours worked, wages earned, or a flat rate per employee. Benefits are typically paid as a defined benefit, meaning retirees receive a predetermined monthly payment for life, calculated based on factors like years of service and salary history.

MEPATs are common in industries where employees frequently move between employers, such as construction, trucking, and manufacturing. While they offer stability and security, they can also face challenges related to funding levels, economic downturns, and demographic shifts. Regulations aim to ensure these plans remain solvent and can meet their long-term obligations to retirees.