Withdrawing from a multiemployer plan can trigger a liability payment that a small contractor cannot survive

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The PBGC guarantees the monthly benefit up to a statutory cap if a single-employer plan runs out of money Public sector pensions still promise a formula while most private sector workers carry only a pot Collective defined contribution pools longevity risk without promising anyone a fixed formula Longevity and return assumptions decide the contribution an employer must make each year A subsidized early retirement factor inside a defined benefit plan can be worth more than a year of salary Cliff vesting at five years means leaving at four years and eleven months pays nothing from the employer side Converting the pension to a lump sum uses the plan's own rate which is rarely the annuity you could buy outside Raising the contribution rate and raising the retirement age solve the same cost from opposite sides A defined benefit formula multiplies final average salary by years of service and an accrual rate Pay-as-you-go financing means this year's contributions pay this year's retirees with no fund set aside