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.