Congressional staff continues to tell SMACNA that we must increase efforts in the push for Composite Plans. Opponents of Composite Plans are asking members of Congress to pass relief for failing plans but to drop Composite Plan design from the package, even though Composites would be a voluntary option for multiemployer plans.
Opponents to Composite Plans have employed a grassroots strategy of steady contact with the members of Congress. Employers need to match these efforts with their own strong grassroots efforts to contact Congress.
What SMACNA Members and Chapters Can Do
Contact your Congressional Delegation in the House and Senate — both Republicans and Democrats — in support of Composite Plans. The future of the multiemployer system and the PBGC depend on the viability of contributing employers (that’s you!) and the future of contributing employers could depend on modernizing the system with a new option for plans.
Take Immediate Action
The Senate and the House are back in session. Those who want pension relief for failing plans are actively lobbying to have it included in any must-pass bill that comes along — a COVID relief package or the bill to fund the government. Opponents of Composite Plans are calling for Congress to cut language which has been included in previous bills.
What to Emphasize
Support Composite Plan/GROW Act language using some of the following key points:
Plans that aren’t failing need help too. It is unreasonable to support the use of federal money to shore-up failing plans headed to the PBGC while opposing a voluntary solution for plans not yet failing, where labor and management agree to transition to Composite Plans, which also would provide a lifetime pension benefit.
Composite Plans honor the collective bargaining system. Employers and a strong core of the building trades unions endorse authorizing the use of Composite Plans. Stress that you believe in the bargaining process to build a strong, resilient industry that survives long into the future.
The multiemployer system needs Composite Plans. This is necessary to prevent the employer base in the DB system from further shrinkage. Both Labor and Management seek to modernize the multiemployer benefit system with a new, voluntaryretirement vehicle. Right now, the only choice is between a defined benefit (DB) plan and a defined contribution (DC) plan. Single employer plans have already moved away from DB plans. The multiemployer system needs Congress to authorize the new hybrid option of Composite Plans.
Protections for workers are deeply embedded in Composite Plan design. Composites would:
- Provide a lifetime annuity, not a lump-sum payout that workers outlive.
- Require conservative plan funding.
- Include strict procedures that must be followed before changing core benefits in the event of severe economic distress.
- Protect “Legacy Plan” benefits so no worker loses any benefits in their old plan.
PBGC premiums. Would continue to be paid for all participants in the “legacy” plan and Pension Benefit Guaranty Corporation (PBGC) liabilities would go down as individual plan liabilities shrink.