Multiemployer Pension Reform Passes Congress; Here's What TAUC Members Need to Know
After two years of effort on the part of TAUC, the National Coordinating Committee for Multiemployer Plans (NCCMP) and numerous stakeholders across the country, the U.S. Congress on December 13 agreed to a continuing appropriations bill for 2015 (H.R. 83) that includes sweeping reforms to the existing multiemployer pension system. It is now headed to President Obama's desk for his signature.
"The passage of multiemployer pension reform is a monumental achievement, one that TAUC and the entire union construction and maintenance industry can proudly celebrate," said TAUC CEO Steve Lindauer. "It is an early Christmas present for a pension system desperately in need of modernization and reform. Many of our member contractors donated their time and financial resources to push the cause of reform as well. From providing financial support, to traveling to Washington and personally visiting their Congressional representatives, these members demonstrated their deep commitment not only to existing and future retirees, but to the longevity of our very industry."
Several major proposals from the NCCMP's Solutions Not Bailouts proposal made it into the final bill, along with other necessary reforms, including:
- Allows plans headed for insolvency (defined in a new category as "critical and declining status") to implement narrowly defined remediation measures and benefit reductions
- Requires a "Retiree Representative" to be appointed for plans with more than 10,000 participants that are considering using the new benefit suspension tools
- Expands the previous, narrow definition of "partition" for which certain plans can qualify
- Increases premiums for the PBGC multiemployer guaranty fund from $13 to $26 per participant beginning after December 31, 2014
- Numerous technical corrections
However, a major element of the Solutions Not Bailouts proposal unfortunately did not make it into the final legislation: giving plan trustees the authority to implement new and innovative plan designs to ensure long-term stability and solvency for plan participants. "In order for this to happen, Congress will need to pass companion legislation in the 2015 Congressional session," Lindauer said. "It is imperative that the union construction and maintenance industry maintain the strong ties of cooperation that have been forged with numerous stakeholders over the past two years to finish the job we started."