A commission comprising industry and union officials, including a large construction contingent, has called for short- and long-term actions, ranging from minor tweaks to major changes, to bolster the ailing multi-employer pension system.
The National Coordinating Committee for Multiemployer Plans panel's Feb. 19 report may help shape bills on multi-employer pension rules. Marco Giamberardino, National Electrical Contractors Association executive director for government affairs, says, "The goal is to see legislation pass before the end of this year."
The report says there is "a need for fundamental restructuring of some basic precepts of [the Employment Retirement Income Security Act] for multi-employer plans if such plans are to continue their mission for the foreseeable future." It also says leaders in Congress, including House Education and the Workforce Committee members, have opposed rescuing private pension plans with federal funds.
Unionized construction relies on multi-employer plans, with 3.9 million workers, retirees and other participants in 2010, said the federal Pension Benefit Guaranty Corp. in a Jan. 29 report. PBGC said 27% of such multi-employer plans were in critical status in 2009. Construction plans' underfunding totaled $193.3 billion in 2010.
The panel proposes altering rules for critical "red zone" and endangered "yellow zone" plans; moving the plans' retirement age closer to Social Security's (age 67); and letting big plans link with small ones without taking on small plans' unfunded liabilities. It also calls for trustees of "deeply troubled plans" to have limited authority for early remedial steps, such as partial suspension of workers' and retirees' benefits, and suggests encouraging "innovative plan designs," such as variable annuities and plans that reduce or eliminate liability for firms that withdraw from them.