Multiemployer Pension Update

Source: James Young, Senior Director, Congressional Relations, HR, Labor and Safety, AGC of America

Among the flurry of week one Biden Administration executive actions and legislative maneuvering, House Democrats have released legislation to shore up the multiemployer pension system. The Emergency Pension Plan Relief Act of 2021 includes previously considered multiemployer pension reform elements that includes the concept of a special partition program for eligible “critical and declining” plans. While the proposal avoids draconian funding rule changes or premium increases that have been debated in recent years, the bill DOES NOT include authorization of Composite Plans.

The legislation, in its current form, is highly unlikely to become law unless the US Senate makes significant changes to their filibuster rules due to its estimated $52 billion cost to the US Treasury. However, elements of the funding relief could be considered alongside a future COVID relief package without Republican support. To further confuse everybody, two versions of the Emergency Pension Plan Relief Act of 2021 were introduced with the only difference being how long plans would be eligible for partition relief:

Emergency Pension Plan Relief Act of 2021, HR 423Emergency Pension Plan Relief Act of 2021, HR 409
Press ReleasePress Release
Fact SheetSummary
Section-by-SectionText
Text

AGC is pleased to see one of the first legislative proposals introduced in the new Congress addresses the multiemployer pension funding crisis and will continue to work with our labor partners and advocate for adoption of the Composite Plan design.

Buy American vs. Buy America

President Joseph R. Biden Jr. signed an executive order intended to strengthen Buy American provisions. Congress passed the Buy American Act in 1933. This program covers specified products and requires the U.S. government to purchase domestic construction materials. The Buy American Act created a national preference for the government to procure only domestic materials used for public construction unless a waiver had been granted. The 1933 Act applies to direct purchases by the federal government, but not third parties, such as private contractors given procurement funding through government endowments.

In summary, the executive order intends to strengthen oversite and leadership and increase waiver scrutiny and inter-agency communication about domestic preferences with respect to Buy American Act provisions.

The Executive Order does not apply to the Buy America Act. The Buy America Act is familiar those operating primarily in the transportation industry performing on projects utilizing funds administered by Federal Highway Administration (FHWA) for state and local public works entities. The Buy America Act was established within Section 165 of the Surface Transportation Assistance Act of 1982, which was a transportation funding and policy act created under the Reagan administration. This provision addresses concerns over the surface transportation of highways and bridges. The Buy America Act was intended to give preference for the use of domestically produced materials on any procurements funded at least in part by the federal government.

Public Hearing Notice – NPDES General Permit Changes

The Environmental Rules Board (ERB) will hold a public hearing through Zoom on amendments to 327 IAC 5 and 327 IAC 15 concerning National Pollutant Discharge Elimination System general permits. The meeting is scheduled for September 9, 2020, at 1:30 p.m.

Link to notice of Public Hearing.

The purpose and subject matter of this rulemaking are to change the method of issuance of general permits from the current permit by rule process to administratively issued permits.

The purpose of the meeting is to provide for public comment prior to the final adoption of the revisions to 327 IAC 5 and 327 IAC 15. Article 5 is Industrial Wastewater Pretreatment Programs and NPDES. Article 5 NPDES General Permit Rule Program.

Link to the proposed draft.

ICI has participated in IDEM meetings concerning the proposed revisions. Please contact Dan Osborn with questions.

Multiemployer Projections Show Need for Program Changes

Absent changes in law, the financial condition of PBGC’s Multiemployer Insurance Program will continue to worsen over the next 10 years. About 125 multiemployer plans covering 1.4 million people are expected to run out of money over the next 20 years. More and larger claims on the Multiemployer Program over the next few years will deplete program assets and lead to the program’s insolvency by the end of FY 2025.

Projections for FY 2028 show a wide range of potential outcomes, with an average projected negative net position of about $90 billion in future dollars ($66 billion in today’s dollars).

If the Multiemployer Program were to run out of money, current law would require PBGC to decrease guarantees to the amount that can be paid from Multiemployer Program premium income. This would result in reducing guarantees to a fraction of current values. PBGC’s guarantee is the amount of retirement benefits that PBGC insures for each participant, which is capped by law.

The President’s FY 2020 Budget contains a proposal to shore up PBGC’s Multiemployer Program. The budget proposes to create a new variable rate premium and an exit premium for the Multiemployer Program. It would raise an additional $18 billion in premium revenue over the 10-year budget window. The proposal includes a provision allowing for a waiver of the additional premium if needed to avoid increasing the insolvency risk of the most troubled plans.

AGC of America is working to make Congress aware of this problem and proposing solutions.

Contact ICI’s Director of Labor Relations George Sheraw (317) 634-7547 with questions about PBGC’s Multiemployer Program.

Utility Excavator Filing Requirement Repealed in 2019 Session

Excavators contracting with utility facility operators or owners are no longer required to file a statement of compliance with the Indiana Secretary of State’s office as of May 1, 2019.

House Bill 1487 repealed Indiana Code language, which was enacted in 2018, that required utility excavators to file a statement of compliance with their annual registration due to the Indiana Secretary of State’s office. The filing required a $30 filing fee. The Secretary of State’s office is working to return filings and fees to excavator’s that submitted after May 1, 2019.  

Comment on Annual Employment Data Requirement

The Federal Highway Administration (FHWA) opened up a comment public comment period regarding the annual employment data submission requirement regulation Title 23, Part 140(a). Contractors and state transportation agencies must submit employment data annully from federal aid transportation construction contracts on form PR-1391, Federal-Aid Highway Construction Contractors Summary of Employment Data. This report provides employment workforce data including the number of minorities, women, and nonminorities in specific highway construction job categories. For additional details about the requirements, use of data, and the request for comment, please see the Federal Register Notice 2019-11768.

To submit comments, go to the Federal eRulemaking Portal: Go to http://www.regulations.gov

DOT Docket ID 2019–0022. Comments are due by August 5, 2019.