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)