AGC Calls on Congress to Make Additional Reforms
Last week the Pension Benefit Guaranty Corporation (PBGC) issued its FY 2016 Projections Report detailing an increasing multiemployer pension program deficit with the probability of PBGC insolvency by 2025 without action. The deficit increased to $59 billion in 2016 and is projected to increase to $80 billion by 2026. According to the report, 100 plans are expected to become insolvent over the next 20 years, a handful of them being in the construction industry.
While the Multiemployer Pension Reform Act of 2014 was meant to address many of the troubled plans, it was slow to be implemented and used by the Obama Administration. The law allowed plans heading toward insolvency to apply to the Treasury Department for benefit reductions if those reductions would allow the plan to remain solvent. To date, 15 plans have applied to Treasury with three applications having been accepted, several others remain under review.
AGC continues to monitor the viability of the PBGC and will oppose schemes to place excessive fees or premiums on plans to fund the failing PBGC. AGC is also advocating that Congress authorize a new type of multiemployer pension plan design, composite plans, that could provide an additional voluntary option to provide a lifetime benefit for employees, requires no government funding, and provides a much needed relief for employers and has been supported by labor and management. AGC hopes congress could begin consideration of the proposal this fall.
For more information, contact Jim Young at youngj@agc.org or (202) 547-0133.