AGC Pension Update: Industry Letter to Congress

Source:  Email sent Aug. 13 by AGC’s Senior Director, Congressional Relations for Labor, HR and Safety James Young

As many of you know, Congress established the Joint Select Committee on Solvency of Multiemployer Pension Plans (JSC or “Committee”) to improve the solvency of multiemployer pension plans and the Pension Benefit Guaranty Corporation (PBGC). The Committee has a statutory deadline to present a legislative solution this fall. However, many details of any possible solutions can change depending on the outcome of the mid-term elections.

A concern to AGC is some members of the JSC have expanded their interest from finding a legislative solution involving a loan program for critical and declining plans to suggesting plans change discount rates from the long-term rate of return to a more conservative corporate bond rate or 30-year Treasury rates. Either change would pose many challenges to otherwise healthy plans by forcing them into red zone status, thereby requiring employer contributions to increase up to three times. None of that increase would translate to any increase in benefits for participants. There has also been discussion of massive PBGC premium increases.

Because of the threats the JSC pose to the current system, AGC—along with other construction employer associations—delivered a letter to Congress today that focuses entirely on construction employers. The letter outlines the case for composite plans; the case against investment assumption mandates (a real threat to plans viability); and the case for not raising premiums. In addition, it outlines the efforts contractors have taken for years to address funding issues and emphasizes that time is running out.  The letter also reminds everyone that both labor and key legislators agreed to actively pursue composite plans after enactment of the Multiemployer Pension Reform Act in 2014.

AGC remains fully committed to having Congress authorize the composite plan design, as outlined in the GROW Act. In addition, the association continues to play defense against bad ideas. The members of the JSC are listed below. AGC will be reaching out to Chapters and members represented by these committee members on how to engage with them between now and the election.

16 Members of Joint Select Committee on Solvency of Multiemployer Pension Plans
Senate GOP Members Senate DEM Members
Chairman Orrin Hatch (R-UT) Chairman Sherrod Brown (D-OH)
Lamar Alexander (R-TN) Joe Manchin (D-WV)
Rob Portman (R-OH) Heidi Heitkamp (D-ND)
Mike Crapo (R-ID) Tina Smith (D-MN)
   
House GOP Members House DEM Members
Rep. Virginia Foxx  (R-NC) Richard Neal (D-MA)
Phil Roe (R-TN) Bobby Scott (D-VA)
Vern Buchanan (R-FL) Donald Norcross (D-NJ)
David Schweikert (R-AZ) Debbie Dingell (D-MI)

AGC Composite Pension Plan Update

Source: Stephen Sandherr, AGC of America

Recently, AGC participated in a media rollout of the Give Retirement Options to Workers (GROW) Act with the future bill sponsors, the NCCMP and NABTU. The GROW Act is more commonly known as composite plans and has long been an AGC priority. Below are several media stories:

Sandherr/McGarvey OpEd The time is now to ensure multiemployer pension plan security, January 9, 2018 The Hill
Bill Meant to Stabilize Union Pensions on Way in House January 9, 2018 BNA (subscription required)
Lawmakers Working to Overhaul Pension Rules, January 9, 2018 The Washington Free Beacon
Roe, Norcross Unveil Bipartisan Plan to Give Retirement Options to Workers, January 9, 2018 Press Release
The legislation could be formally introduced soon and AGC is calling on members to send letters of support to their legislators by the AGC Legislative Action Center.

Additional Background:

AGC continues to work with Congress, the Building Trades and other stakeholders in the authorization of composite plans. AGC has long viewed the plan design as being comprised of the best features of defined benefit plans and defined contribution plans. These composite plans would offer voluntary options to share risks to provide funding stability, provide lifetime income to participants and limit employer obligations to negotiated contributions only.

Composite plans were was initially proposed in the NCCMPs Solutions not Bailouts but were not included in the Multiemployer Pension Reform Act of 2014 (MPRA). Since that time AGC has led efforts to advance composite plans.

Efforts are also underway to refine proposals to save distressed plans where MPRA is not an option (including but not limited to Central States). We are working to provide credible and realistic solutions to the solvency problems of these plans which will not increase the long-term financial exposure for non-distressed plans in the multiemployer system.

More information can be found on the campaign website: Save Our Futures

Laborers Retirement Plans

Indiana Laborers have two retirement plans: one is a Defined Contribution (DC) plan, and one is a Defined Benefit (DB) plan.

The DC plan was created in 2014, and each Laborer that works under an Indiana Laborers Agreement has money contributed by their employers to this fund. Here is the Summary Annual Report from the Board of Trustees for the Indiana Laborers  Defined Contribution Trust Fund Plan.

Annually each November (or late October) a fund statement is mailed to each Laborer, telling them how much is in their account. This fund is like a 401k for each Laborer, so it’s their money, when they retire. Here is a redacted sample Statement of Individual Account.

Contractors that employ Laborers here in Indiana should be aware of this new fund, especially since many Laborers may not be aware of this additional growing retirement fund that will help fund their retirement.

In addition the Indiana Laborers also have a DB retirement fund, Indiana Laborers Pension Fund, that in 2014 was determined to be in the critical status Red Zone. In August 2017 ICI learned that this fund, is now certified to be safe (neither endangered or critical), and we are told this fund should be fully funded by 2023.

EEOC Update

SUMMARY: The U.S. Equal Employment Opportunity Commission (EEOC) announces that, until further notice, filers subject to the EEO–1 reporting requirement should not submit aggregate data about W–2 (Box 1) income and hours worked, which is the information required by ‘‘Component 2’’ of the EEO–1 report as approved on September 29, 2016. However, filers should continue to submit data on the ethnicity, race, and sex of workers by job category (‘‘Component 1’’ of the EEO–1 report). This is the same type of EEO–1 data that filers have submitted in the past.

DATES: All EEO–1 filers should submit and certify their 2017 EEO–1 reports (Component 1 data only) by March 31, 2018. They should count employees for purposes of this EEO–1 report during a ‘‘workforce snapshot period’’ between October 1 and December 31, 2017.

Federal Register Notice

2017 Safety Program Awards Application Instructions

ELIGIBILITY

To be considered for an award, applicants must meet the following eligibility requirements:

  • Current ICI membership;
  • No OSHA citable work-related fatalities since January 1, 2016;
  • Must have one or more active jobsites available for visit during August and September 2017;
  • Must allow a random and unannounced jobsite validation and worker interviews;
  • Award recipients must work with ICI’s Safety Committee to participate in a safety roundtable gathering in early 2018.

We will announce the award recipients at ICI’s 2017 Membership Meeting.

COMPLETING THE APPLICATION

The ICI application process consists of three parts:

  1. Interactive application form which is filled in and submitted electronically once you have completed all of the requested information. Each section of the application clearly states what is required for that section.
  2. The application form will also request some independent documentation. These documents should be scanned and saved as a pdf file and included as an attachment to the email when you send your application.
  3. Once the completed application form is sent to ICI via email, ICI will send you links to electronic supervisor and onsite worker surveys. You will need to provide those links via text or email to your supervisors and onsite workers so they can take the one or two minute survey.

NOTE: Please contact the ICI office at ici@indianaconstructors.org, or by phone at (317) 634-7547 if your company is unable to participate electronically.

DEADLINE

Applications are submitted electronically and must be received by Friday, June 30, 2017. At least the minimum number of all supervisor and onsite worker surveys must be submitted by the June 30 deadline (refer to application for minimum number needed).

CONFIDENTIALITY

To ensure fairness in the judging process, ICI will remove all identifying information, such as company name and address, from the applications and supporting documentation before providing information to ICI’s Safety Program Awards Selection Committee.

COMPANY SAFETY PROGRAM

  • Please provide “yes” or “no” answers to three questions, adding explanations and/or comments as appropriate.
  • Please attach a sample copy of one of your jobsite safety plan, hazard analysis and preventative action.
  • Please attach a sample copy of your written plan to provide task-specific, hands-on training for new hires and employees who transfer to a new task.

COMPONENTS OF SAFETY PROGRAM

Please attach a copy of the Table of Contents from your company’s safety manual.

TARGETED QUESTIONS – SHORT ANSWER

Please provide brief answers to the two questions. These short answers provide additional insight into a contractors safety efforts that safety numbers may not show; your written answers to these questions will HELP Judges to better understand a contractor’s safety efforts and programs. Although ICI will remove all identifying information, please refrain from using the company name and/or company-specific acronyms in this section.

SURVEYS

This year, we are using electronic surveys to make it easier for companies to distribute and request anonymous feedback from employees about the company’s safety program. Contractors without the capabilities of doing the surveys electronically should call the ICI office at (317) 634-7547 for paper surveys and instructions.

APPLICATION SUBMITTAL

Completed applications will be automatically sent to ICI via the interactive application form. Survey forms should be submitted by June 30, 2017.

Two-Pool Withdrawal Liability

Source: Pension Benefit Guaranty Corporation (PBGC)

The Pension Benefit Guaranty Corporation is publishing a request for information (RFI) in the Federal Register seeking input on proposed “two-pool” alternative withdrawal liability arrangements. These arrangements involve an alternative method for measuring the withdrawal liability amount and the annual payment amount that an employer would owe the plan. PBGC wants input from the general public and all interested stakeholders, including multiemployer plan participants and beneficiaries, plan sponsors, and employers on these types of actions. For more information, visit: Request for Information: Two Pool Withdrawal Liability. To read the full request for information and provide input, please visit Requests for Approving Certain Alternative Methods for Computing Withdrawal Liability; Settlement of Withdrawal and Mass Withdrawal Liability.