SMACNA has received word that the Joint Select Committee on Solvency of Multiemployer Pension Plans (JSC) has been unable to come to agreement. There is little expectation that the JSC will work beyond the November 30th deadline.
The goal of the JSC was to find solutions for failing multiemployer pension plans and for the Pension Benefit Guaranty Corporation (PBGC) funding crisis by November 30. As the JSC work progressed, it became clear the Committee was seriously considering solutions that would negatively affect plans other than those going insolvent. SMACNA increased its engagement with members of the JSC and others to mitigate any negative impact to SMACNA plans. At the same time, we worked for passage of the GROW Act to authorize the use of Composite Plans.
As we reported last week, the JSC floated a proposal but it drew serious criticism from construction employers (including SMACNA), building trades unions and many plans. Disappointingly, the long-discussed loan program was not included and any rescue for participants in failing plans would have been left to the PBGC. Also, as SMACNA had warned was possible, the proposal would have tightened the funding rules in a way that would have had a seriously detrimental impact on most multiemployer plans. PBGC premiums under this proposal would have increased to an unacceptable level. While Composite Plans remained in the mix, the proposed funding rules would have made it less likely that plans could take advantage of the hybrid design.
While it is unlikely the JSC will work beyond November 30th, individual members could continue to negotiate with each other to find something acceptable to more stakeholders and attempt to attach that as part of the “must-pass” Omnibus bill or the proposed Tax Extenders bill during the lame-duck session.
Until the legislative session is concluded, SMACNA’s Capitol Hill office will remain hyper-vigilant and continue to deliver the message that we need Composite Plans now and that we oppose PBGC premium increases and restructuring of funding rules that would harm plans.
If you have any questions, please feel free to contact the Capitol Hill office at (202) 547-8202.