After months of development, House Education and Workforce Committee Chairman John Kline released a discussion draft of NECA-supported multiemployer pension reform legislation authorizing the use of composite plans at a Capitol Hill press event held Sept. 9.
Introduction of the discussion draft has been a long time coming. NECA has been advocating for passage of Composite Plans going back as far as 2013. While similar language authorizing Composite Plans was set for inclusion in the original Multiemployer Pension Reform Act of 2014, it was taken out at the last minute.
“Chairman Kline pledged to move forward with this legislation this Congress, and NECA will continue to work with him to ensure there will be strong bipartisan support to get this bill passed before the end of the year,” said NECA Executive Director of Government Affairs Marco Giamberardino. “NECA thanks the Chairman for his tireless work in finding new ways to modernize the current multiemployer system by creating new flexible plan designs, known as Composite Plans.”
Added Giamberardino: “It is clear that a transient workforce, an aging population, and a weak economic recovery have led to unsustainable pension contributions and unfunded withdrawal liabilities that continue to put a strain on contributing employers. Facing growing risks, employers are forced to consider paying their withdrawal liability, and may face bankruptcy if they were to exit the system. This harms retirees receiving benefits, saddles other participating employers with a larger financial burden, and weakens the system overall. Composite plans would limit the financial risk for the employers while providing effective benefit protections for plan participants.”
Giamberardino said the adoption of Composite Plans would be voluntary and subject to the collective bargaining process.
“While no current defined benefit plan would be required to adopt any of these provisions, it is an important tool that should be made available to plans who choose to take advantage of this option,” Giamberardino said. “NECA urges members of Congress from both sides of the aisle to support Chairman Kline’s proposal.”