SMACNA, in a joint effort with other companies and organizations, has expressed to Congress its strong opposition to any proposal that would further limit the withdrawal liability of a limited class of employers participating in multiemployer plans. Such a proposal would undermine retiree benefits, increase liabilities for other employers in the plans, and accelerate multiemployer plan insolvencies.
While proponents say additional limitations on multiemployer plan withdrawal liability are needed to allow auto dealers and other small businesses to sell their businesses or pass them on to their children, current law already includes multiple provisions to ensure that small businesses are not unfairly burdened by the threat of withdrawal liability in these situations. For example, current law permits small business owners to retain the majority of the value upon the sale of their business’ assets regardless of the size of the potential withdrawal liability assessment, and also permits the transfer of company stock to the business owner’s children or an unrelated buyer without triggering withdrawal liability.
Some of the plans that would be the target of withdrawal liability relief provisions are dangerously near the tipping point to insolvency, and any such proposals could easily push them over the edge. Meanwhile, the Pension Benefit Guaranty Corporation multiemployer program is also facing insolvency in less than ten years. Instead of according special treatment to single interest groups on a one-off basis, we urge Congress to instead work expeditiously to pass comprehensive multiemployer plan reform that strengthens, not undermines, troubled plans and the PBGC.