The Treasury Dept. has taken steps to implement a 2014 law that directed major changes for multiemployer pension plans. But some in Congress want to reverse a provision that lets sponsors of ailing plans seek to cut members' benefits.
Multiemployer plans cover about 10 million workers and retirees and are common in unionized construction. In 2010, coverage in the construction industry accounted for 55% of all multiemployer plans and 37.5% of the people those plans covered, the federal Pension Benefit Guaranty Corp. said in a 2013 report.
Enacted on Dec. 16, the omnibus spending bill included provisions aimed at bolstering the weakening multiemployer plan program. PBGC reported last November that the program's fiscal 2014 deficit had jumped to $42.4 billion from $8.3 billion in 2013.
Congressional critics are focusing on a provision that allows sponsors of financially ailing plans to apply to Treasury for permission to reduce plan members' benefits. Treasury on June 17 announced proposed and temporary rules laying out that application process.
Sen. Bernard Sanders (I-Vt.) and Rep. Marcy Kaptur (D-Ohio) on June 18 announced they will introduce a bill to undo the benefit-cut provision. Sanders said, "We made a commitment 40 years ago to workers in this country that companies will never renege on a pension promise. We need to restore that commitment."
Treasury notes that sponsors cannot apply to trim benefits until they have exhausted "all reasonable measures" to deal with plans' financial woes.
Treasury also named attorney Kenneth R. Feinberg as special master to review multiemployer plan sponsors' applications. He has supervised such high-profile matters as the federal post-9/11 victims compensation fund and claims stemming from the 2010 Deepwater Horizon oil spill.
Marco Giamberardino, National Electrical Contractors Association executive director for government affairs, said that last year's pension law and the follow-on regulations have helped multiemployer plans and their members "immeasurably."
He added, "The ability to take advantage of [the law's] self-help provisions will provide a measure of stability unattainable under prior law."
Giamberardino said, "Rather than supporting repeal, we urge that it be given time to realize its full potential."
Story updated on June 24 to include NECA comments.