Taft-Hartley Pension Plan

What Does Taft-Hartley Pension Plan Mean?

A Taft-Hartley pension plan is a multi-employer retirement plan established by the Taft-Hartley Act in 1947. Employers contribute a fixed amount on behalf of their employees, who then receive a predetermined benefit upon retirement. This shared pension structure enables employers to pool resources, reducing costs while potentially offering better retirement benefits for their employees.

Insuranceopedia Explains Taft-Hartley Pension Plan

In a Taft-Hartley pension plan, the employee union negotiates the employer’s contribution amount, while a third-party board, comprising equal representatives of employers and employees, manages and invests the contributions. This board also determines the plan’s specifics, such as the required length of employment to qualify for benefits and the retirement payout amounts. Importantly, employers are not held accountable for any investment losses incurred by the plan.