...Multiemployer pension plans face uncertain future
(From Page 3)
solvencies threaten to drive the
PBGC’s multiemployer insurance fund
into insolvency in about 2023,” he said.
“If this occurs, retirees depending on
the PBGC multiemployer insurance
fund would see their pension payments
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reduced to a small fraction of their orig-
inal value — or nothing at all.”
In an effort to prevent that from hap-
pening, the National Coordinating
Committee on Multiemployer Plans
(NCCMP) established a Retirement
Security Review Commission more
than a year ago to craft reforms that
tackle the structural problems plaguing
the system — and that have the support
of both business and labor.
The report — “Solutions, Not Bail-
outs” — was presented to the House
subcommittee on March 5.
It recommends modifying ERISA’s
anti-cutback rule to allow for partial
suspension of accrued benefits for ac-
tive and inactive vested participants,
and to partially reduce benefits of re-
tirees already collecting a pension
check. NCCMP says reductions would
be limited “to the extent necessary to
prevent insolvency,” but would never
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go below 110 percent of the PBGC
guaranteed amounts.
NCCMP also seeks additional secu-
rity for plans that weathered the crash;
plans that are on the path to recovery
measured by rehab blueprints; and
plans “that, with expanded access to
tools in the Pension Protection Act
(PPA) and (in) subsequent relief legis-
lation, will be able to achieve their
statutorily-mandated funding goals.”
Additionally the report recommends
giving trustees flexibility to create new
multiemployer plan designs to help
prevent insolvency.
Anthony Perrone, secretary-treas-
urer of United Food and Commercial
Workers, testified before the subcom-
mittee that his union recently worked
out a new plan design with Kroger to
let the grocery chain merge four shaky
plans into one larger whole, and bor-
row $1 billion at low interest to bring it
from 71 percent funded to 100 percent
funded.
UFCW co-manages more than 60
plans with its employer partners, cov-
ering 700,000 active workers and an-
other 700,000 retirees. The largest of
them — the $5.2 billion UFCW Indus-
try Pension Fund — covers 92,000
workers at more than 500 employers.
Critics have already surfaced, char-
acterizing the proposals as a “union
bailout.”
“... the clear message from Congressional leaders that
no bailout would be forthcoming to protect the private
multiemployer pension system overall, despite having
provided enormous financial relief to those in the
financial services industry whose actions precipitated
the depletion of the pension funds’ assets.”
FROM THE REPORT : ‘ SOLUTIONS NOT BAILOUTS ’
NATIONAL COORDINATING COMMITTEE FOR MULTIEMPLOYER PLANS
The NCCMP report itself notes up
front “the clear message from Con-
gressional leaders that no bailout would
be forthcoming to protect the private
multiemployer pension system overall,
despite having provided enormous fi-
nancial relief to those in the financial
services industry whose actions precip-
itated the depletion of the pension
funds’ assets.”
Harold Force, president of Force
Construction of Columbus, Indiana,
speaking on behalf of Associated Gen-
eral Contractors, told the House sub-
committee that multiemployer pension
plan relief is not a union bailout.
“Contributions to these plans are
funded entirely by employers, not
unions,” he said.
Trust plans are overseen by an equal
number of labor and management
trustees.
“Trustees of a plan must be given
the flexibility to make changes,” Force
testified. “New tools are needed to try
to revolutionize the pension system and
save the defined benefit system — both
for the directly interested parties such
as employers and participants, but also
for the PBGC.”
Funding provisions of the Pension
Protection Act of 2006 (PPA) expire on
Dec. 31, 2014.
(Editor’s Note: Press Associates
Inc. contributed to this report.)
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PAGE 4
NORTHWEST LABOR PRESS
MAY 3, 2013