New Plan Outlines Private Sector Solutions to Protect Multiemployer Plans and Spur the Economy
The need for dramatic, permanent reform of multiemployer pension plans has been a legislative and research priority for the National Electrical Contractors Association (NECA) since temporary measures were adopted in 2006 under the Pension Protection Act. Today, NECA endorses the reform recommendations compiled by the Partnership for Multiemployer Retirement Security. NECA is a founding member of the Partnership, a unique coalition of business and labor groups that work together to protect multiemployer pension plan solvency.
The Partnership report outlines a series of reforms to ensure that multiemployer pension plans are able to continue to provide cost-effective and reliable retirement benefits to millions of working class Americans while protecting taxpayers. This report was completed over 18 months with input from more than 40 stakeholders from both business and labor. NECA contributed its own research from its Labor Relations Task Force, which has studied the issue of electrical contractors' defined benefit plans for more than three years.
The proposals are outlined in the report, "Solutions not Bailouts: A Comprehensive Plan from Business and Labor to Safeguard Multiemployer Retirement Security, Protect Taxpayers and Spur Economic Growth." The full report can be viewed online.
"NECA member contractors contribute to 112 local or regional defined benefit plans that cover more than 174,000 workers," said NECA CEO John M. Grau. "Based on current market values, 75 percent of the assets of all these plans is held in plans that are in the green zone [plans classified as solvent], and 70 percent of the participants are covered by green plans. However, we need to put permanent reform measures in place as soon as possible to ensure all the employees of NECA contractors have security in their retirement. The Partnership's report offers the best solutions to protect the workers who work for all NECA contractors."
The recent economic downturn has exacerbated the cumulative effects of three decades of statutory and regulatory changes to multiemployer pension plans. This is further compounded by the addition of broader financial reporting requirements, tightening credit markets, and unprecedented competitive pressures on contributing employers, leading to an environment of decreased long-term viability of many plans as new employers are discouraged from participating and existing employers are encouraged to withdraw.
The report offers specific, private-sector recommendations for reform that will improve the retirement security of plan participants, enhance the ability of plans to retain contributing employers by limiting financial volatility, and help prevent the need for federal funding of such plans.
"To protect multiemployer retirement security, we need solutions that address the long term challenges facing both employers and employees," said Marco Giamberardino, NECA Executive Director, Government Affairs. "The proposals presented in the NCCMP Retirement Security Review Commission Report do just that. These joint solutions will ensure that these plans continue their mission of providing reliable retirement benefits to millions of working class Americans and enable the employers who fund the plans to remain strong contributors to the national economy. But we need to move quickly to adopt these recommendations to protect both the workers and the economic investment the plans provide."
For more information on the Partnership, or to read the full report, visit www.solutionsnotbailouts.com. Marco Giamberardino is available as an expert media source on the legislation for multiemployer pension plans and the economic impact of NECA members' contributions to these plans.
About NECA: NECA is the voice of the $130 billion electrical construction industry that brings power, light, and communication technology to buildings and communities across the U.S. NECA contractors help customers achieve their goals for energy conservation, efficiency and renewable power. NECA’s national office and 119 local chapters advance the industry through advocacy, education, research and standards development. For more information, visit www.necanet.org.