The House Education and Labor Committee passed an amended version of H.R. 397, a bill to establish a government funded Pension Rehabilitation Trust Fund for failing multiemployer pension plans. In a contentious session, the Democratically controlled Committee passed the bill on a strict party-line vote with Republicans opposed to the bill, in part, because it is not passable in the Republican held Senate and they see it as a complete bailout of union plans.
In a letter sent to the Education and Labor Committee before the vote, it was argued that based on previously agreed to principles, reform needs to include new plan design, use the Pension Benefit Guaranty Corporation (PBGC) as the main liability removal tool, increase PBGC guarantees, keep PBGC premiums affordable, provide new tools to increase plan funding, and ensure rule changes don’t adversely impact employers, disrupting the system even more.
The bill must now be considered in the House Ways and Means Committee before it can go to the House floor for a vote. The Ways and Means Committee is expected to consider H.R. 397 in the next two weeks with floor consideration before the August recess, setting up Senate action in the fall. SMACNA will be in touch with Ways & Means members from both parties before it takes its votes, and has encouraged members of both parties to include Composite Plans in a final bill.
As was previously reported, the Senate is not expected to take action on multiemployer pension reform until a bill comes over from the House. Many believe that the Senate will take a different approach than the House on the issue of failing plans and PBGC projected insolvencies.
At the present time, it seems most likely a rescue plan for failing plans will not include a direct infusion of money, 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.