Even though the bi-partisan, bi-cameral Joint Select Committee (JSC) on multiemployer pensions was not successful last year, Congressional members on the committees of jurisdiction for pension issues, remain engaged trying to find a solution for the multiemployer pension crisis.
Senate staff has indicated Composite Plan design is still on the table as part of the long-term solution to stabilize pension plan funding and prevent a reoccurrence of the current funding crisis but clearly the driving force behind reform is the looming insolvencies of approximately 130 plans.
Common Sense Principles
As lobbying efforts began in 2019, key Hill staff strongly suggested chances for success would be enhanced if stakeholders were united, noting that in the past, successful legislative action on multis hinged on support from a diverse coalition, which gained the needed bipartisan support.
After some discussion by stakeholders, a set of “Common Sense Principles” for multiemployer pension reform were drafted, debated and redrafted several times. Ultimately, a broad coalition signed off on the document. The groups adopting the principles include SMACNA, other construction employers, key union organizations, employers from other industries, the National Coordinating Committee for Multiemployer Plans (NCCMP) and the Chamber of Commerce, among others.
While SMACNA signed on to the principles document early, SMACNA also participated in discussions, as part of the NCCMP Steering Committee, to make changes to the document in a way that would be acceptable to the diverse membership of NCCMP.
The “Principles Document” is being shared with Members and staff on Capitol Hill and includes seven bullet points. These principles point to the features that the coalition members believe are necessary to address looming insolvencies, enhance plan funding, and reduce plan liabilities.
In addition to new plan design, the principles include using the Pension Benefit Guaranty Corporation (PBGC) as the main liability removal tool, increasing PBGC guarantees, keeping PBGC premiums affordable, providing new tools to increase plan funding, and ensuring rule changes don’t adversely impact employers, disrupting the system even more.
Recently there has been talk that the House may act on Ways & Means Chairman Richard Neal’s (D-MA) pension bill, more or less a loan program for failing plans, before the August recess. While it is not likely that what comes out of the Democratic House will be acceptable to the Republican controlled Senate, SMACNA believes this will get the process of negotiating a bill that can attract the broad support it will need for final passage. As difficult as the process will be in 2019, that difficulty will increase in 2020, a presidential election year, so a full court press is on.
It seems most likely a rescue plan for failing plans will not include a direct infusion of money into plans but rather would involve shoring up the PBGC in a way that would mitigate the most extreme benefit cuts for failing plan participants. SMACNA will continue its push for Composite Plans, and will also fight to keep premium increases at an affordable level and to make sure rule changes don’t have a negative impact on an employer’s ability to access credit and bonding.
For more information about multiemployer pension reform, contact SMACNA’s Capitol Hill office team.