Congress has approved legislation to revamp the multiemployer-pension program in an attempt to bolster plans that are in dire financial shape.

The pension policy changes, which are part of a $1.1-trillion 2015 spending package the Senate passed late on Dec. 13, would allow sponsors of multiemployer plans in “critical and declining” condition to temporarily or permanently cut members’ vested benefits.

It also would mandate a doubling in the annual per-member premiums the plans pay to the federal Pension Benefit Guaranty Corp. (PBGC), to $26 from $13 now.

The Senate vote follows the House's approval of the bill two days earlier, sending the measure to President Obama, who is expected to sign it.

Multiemployer pensions are prevalent in unionized construction. They cover more than 3 million workers and retirees in the industry and their beneficiaries.

Contractor groups, including the Associated General Contractors of America and the National Electrical Contractors Association, have endorsed the new legislation.

Stephen Sandherr, AGC of America CEO, in a statement after the House vote noted, "Without these new measures, thousands of retirees would likely have been forced to accept the savage cuts to their retirement benefits that come when the Pension Benefit Guaranty Corp. is forced to step in."

Construction unions were divided about the legislation. The plan drew letters of support from Sean McGarvey, North America’s building-trades president, and the heads of the International Union of Operating Engineers and the plumbing and pipefitting workers' union, for example.

But Terry O'Sullivan, general president of the Laborers’ International Union of North America (LIUNA), strongly opposed the proposal.

Under the plan, drafted by House Education and the Workforce Committee Chairman John Kline (R-Minn.) and Rep. George Miller (Calif.), the panel’s top Democrat, trustees of “severely underfunded” plans could cut vested benefits for the workers and retirees the plan covers (see text of amendment).

Miller said in a statement, “This is the last chance that labor unions and their members have to gain some control over the future of their pensions, and this reform would give them the tools they need to rescue themselves.”

In a Dec. 9 letter to House lawmakers, McGarvey said the proposal “will strengthen the multiemployer-pension system for the long term and provide hard-earned security for our members.”

McGarvey added that the building trades “are concerned” about the proposal’s provision to increase premium payments to the PBGC and urged legislators “to take a serious look at PBGC structure and funding next year.”

But LIUNA's O’Sullivan said in a Dec. 11 statement, “Using parliamentary gimmicks and without debate or hearings, Congress is on a path to rob millions of dollars from workers’ pensions to keep a failing government agency [PBGC] on life support.”

Other opponents included the International Association of Machinists, Rep. Alcee Hastings (D-Fla.) said in House Rules Committee hearing on Dec. 10.

Miller told the Rules Committee that the proposal doesn’t mandate benefits cuts; such steps would be up to the pension plans.

He contended that if Congress doesn’t act on multiemployer plans, there is a “high likelihood” that members of plans that fall into default could end up with only $12,000 a year—the amount PBGC pays in such cases when it steps in.

Construction-industry plans accounted for 55% of all multiemployer plans and 37.5% of the people such plans covered in 2010, PBGC said in a 2013 report.

The agency’s fiscal 2014 annual report, released on Nov. 17, said its multiemployer program’s deficit had grown to $42.4 billion, a record level, from $8.3 billion in 2013.

Story updated 12/14/14 with Senate vote, AGC comment.