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Old 03-08-2019, 08:56 AM
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Mary Pat Campbell
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House panel hears ideas for solving ‘urgent’ multiemployer crisis

Solutions to a multiemployer pension crisis will be painful but will only get harder and more costly if there is further delay, witnesses told the House Education and Labor subcommittee on health, employment, labor and pensions Thursday.

The hearing, titled "Cost of Inaction: Why Congress must address the multiemployer crisis," heard from business executives, multiemployer actuarial experts, academics and a retiree from Hostess Brands Inc. on the imminent crisis for an estimated 10% of multiemployer pension plans covering 1.5 million participants that are headed toward insolvency.

The situation is equally dire for the Pension Benefit Guaranty Corp.'s multiemployer program. Without congressional action, participants in struggling plans face benefit cuts of 50% or more; when the PBGC multiemployer program itself becomes insolvent as projected to happen by 2025, those cuts will deepen to 90%, testified Joshua Shapiro, vice president of pensions with the American Academy of Actuaries.

Bipartisanship to be key to change in WashingtonTwo more multiemployer plans get OK to reduce benefitsWays and Means Committee renews retirement security focus
The impact on federal tax revenue and social safety nets is also sizable, said Mariah Becker, director of research and education for the National Coordinating Committee for Multiemployer Plans. Over a 30-year horizon, an estimated $32 billion to $103 billion in taxes would not be paid if some plan participants lose their pension benefits, while government social safety program costs could increase $170 billion to $240 billion.

Committee members on both sides of the political aisle voiced support for a bipartisan solution that addresses the current plans in crisis but also offers structural reforms for all multiemployer pension plans. Possible reforms discussed included higher multiemployer PBGC premiums, changes to discount rates used to calculate obligations, and changes to assumed rates of return on investments, all of which could build on last year's legislative proposal to create a federal loan program for multiemployer pension funds.

H.R. 397, the Rehabilitation for Multiemployer Pensions Act, is sponsored by House Ways and Means Committee Chairman Richard Neal, D-Mass., and has bipartisan support. United Steelworkers International President Leo W. Gerard said in a statement that the bill "would make sure that American workers get the secure retirements they deserve," and pledged to support its passage.

"I don't think we can talk about this without assuming there will be shared pain," said ranking subcommittee Chairman Tim Walberg, R-Mich.

"This crisis is one of the most important and urgent issues within our committee's jurisdiction," said subcommittee Chairwoman Frederica S. Wilson, D-Fla., who promised more hearings soon to work on a solution. "Congress cannot afford to wait any longer," Ms. Wilson said.
Congress Must Address The Multiemployer Pension Crisis

NCCMP’s Mariah Becker testifies to U.S. House of Representatives on why congress must address the multiemployer pension crisis.

Multiemployer Pension Crisis
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WASHINGTON, DC – March 7, 2019 – This morning, Mariah Becker, Director of Research and Education for the National Coordinating Committee for Multiemployer Plans (NCCMP), testified to the United States House of Representatives Subcommittee on Health, Employment, Labor, and Pensions at the Rayburn House Office Building.

“NCCMP appreciated the opportunity to testify in front of Congress today to provide our perspective on the serious consequences that the looming insolvencies of certain multiemployer pension plans and the PBGC will deliver to plan participants, contributing employers, the national economy, and the U.S. Government,” said Michael Scott, Executive Director of the NCCMP. “Mariah clarified the many nuances of the issues involved in the crisis and impressed upon them the urgent need for a bipartisan solution in 2019.”

“After hearing from Mariah today, we hope this Committee has a deeper appreciation for the root causes of this crisis, the massive financial impact that inaction would bring to retirees and the U.S. Government, and the critical reasons why it needs to be addressed in 2019,” said Scott. "NCCMP remains vigilant in our efforts to solve this crisis, and we will keep engaging Congress and the Administration until a viable solution that solves the problem while also protecting and preserving financially healthy plans is signed into law.”

About NCCMP: The National Coordinating Committee on Multiemployer Plans is a non-partisan, nonprofit, tax-exempt social welfare organization created in 1974 with members, plans, unions and contributing employers in every major segment of the multiemployer universe. The NCCMP is the only national organization devoted exclusively to representing the interests of multiemployer plans, organized labor and the job-creating employers of America who jointly sponsor them, and the more than 20 million active and retired American workers and their families who rely on multiemployer retirement and welfare plans. The NCCMP’s purpose is to assure an environment in which multiemployer plans can continue their vital role in providing retirement, health, training, and other benefits to America’s working men and women.

About NABTU: North America’s Building Trades Unions is an alliance of 14 national and international unions in the building and construction industry that collectively represent over 3 million skilled craft professionals in the United States and Canada. Each year, our unions and our signatory contractor partners invest over $1 billion in private sector money to fund and operate over 1,900 apprenticeship training and education facilities across North America that produce the safest, most highly trained, and productive skilled craft workers found anywhere in the world. NABTU is dedicated to creating economic security and employment opportunities for its construction workers by safeguarding wage and benefits standards, promoting responsible private capital investments, investing in renown apprenticeship and training, and creating pathways to the middle class for women, communities of color and military veterans in the construction industry.


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