In a letter following a recent Congressional hearing on retirement security, SMACNA urged the House to support multiemployer pension composite plan design by backing Education and Workforce Committee Chairman John Kline’s draft proposal on Composite Plans. It is SMACNA’s hope that the hearing results in bipartisan agreement and that Congress will act this year. SMACNA proudly represents 3,500 construction companies throughout the country that have been willing to contribute generously to plans with lifetime retirement benefits negotiated through its collective bargaining process. They contributed approximately $460 million in 2015 to The Sheet Metal Workers’ National Pension Fund (NPF) and a similar amount has been contributed to dozens of SMACNA local DB plans. Unfortunately, the Defined Benefit (DB) system has destabilized in recent years and SMACNA believes America’s retirement system will be stronger and better if Congress authorizes Composite Plans, a new pension option for collectively bargained plans.
If contributing employers – the majority of whom are extremely worried about the status of the current system – begin to implement exit strategies, the DB system will weaken and the PBGC will be further undermined and much more quickly than currently anticipated.
SMACNA employers, some very large but the vast majority small and family-owned, have spent their lives, sometimes generations, building, maintaining and growing their businesses. While proud to provide middle class jobs, owners will not sit idly by and watch a lifetime of work go down because of failing pension plans. Too many DB plans have unknowable and unpredictable risk. Our employers want the opportunity to continue to provide a lifetime of retirement benefits and Composite Plans would give them that opportunity without risking the viability of their businesses.
Give Workers a Choice
The dramatic shift in this country from Defined Benefit plans to Defined Contribution plans is already beginning to spill over into the multiemployer world. Facing a choice between a Defined Contribution plan and a Composite Plan, workers will choose the Composite Plan. SMACNA urges Congress to give employers and workers that choice.
Composite Plans have been designed around the familiar give and take of collective bargaining and would require any transition to be negotiated and approved by both labor and management fund trustees.
Composite Plan Design to Benefit Workers and Employers
The stakeholders have different needs but Composite Plan design has features employers and workers alike consider important in today’s changing economic environment. The proposed design takes every reasonable precaution to ensure plans are secure and to assure that benefits already earned are not lost. For employers, Composite Plans provide cost predictability.
SMACNA is urging the quickest possible action on Chairman Kline’s proposal to help modernize and reinvigorate the multiemployer retirement system so SMACNA employers can continue to provide good middle class jobs with health and pension benefits that benefit their workers and their families, their communities and the U.S. economy.