Chamber Signs Coalition Letter Urging Congress to Address Multiemployer Pension Plan Crisis

Tuesday, June 11, 2019 - 9:30pm

On June 11, 2019, the U.S. Chamber of Commerce sign a coalition letter along with several additional stakeholders, encouraging Congress to address the growing multiemployer pension plan crisis and offer legislative solutions for all plans. 

Download the Letter 

 

June 11, 2019

The Honorable Bobby Scott
Chairman
Committee on Education and Labor
U.S. House of Representatives
Washington, DC 20515

The Honorable Virginia Foxx
Ranking Member
Committee on Education and Labor
U.S. House of Representatives
Washington, DC 20515

Dear Chairman Scott and Ranking Member Foxx:

On behalf of the undersigned groups that have joined together as representatives of labor, employers,
pension plans and other stakeholders, we urge Congress to address the growing multiemployer pension
plan crisis and offer legislative solutions for all plans.

The multiemployer pension system is an integral part of the U.S. economy. In 2015, the multiemployer
system paid $158 billion in federal and $82 billion in state and local taxes, supported 13.6 million
American jobs, and contributed more than $1 trillion to U.S. GDP. This includes $41 billion in pension
payments and $203 billion in wages to active employees. These plans provide more than 10 million
workers the ability to accrue retirement benefits in industries such as trucking, food services, and
construction.

Historically these plans have offered stable retirements for millions of workers, but the entire system is
under threat of collapse. Due to a confluence of economic, statutory, regulatory, and demographic
events, approximately 130 multiemployer pension plans (including several that are systemically
important) are projected to run out of money within the next several years. These plans represent 1.5
million participants. Additionally, the plans’ insurer of last resort, the Pension Benefit Guaranty
Corporation (PBGC), will become insolvent in 2025 concurrently with the insolvency of the Central States
Pension Fund, which is the largest multiemployer pension plan with respect to benefit payment.

Without changes to the law, it will be impossible for these plans and the PBGC to avoid insolvency,
resulting in billions in lost tax revenue and billions in new safety net entitlement spending. However,
with targeted legislation to create incentives for plans to enhance funding and reduce plan liabilities,
many additional problems can be avoided.

We support achievable solutions that will restore the solvency of distressed plans and maximize benefits
for participants, while not harming plans that are financially healthy or undermining plans with viable
rehabilitation efforts underway. These solutions can use existing partitioning authority at the PBGC to
provide a one-time program to remove plan liabilities from distressed plans. Any new funding for this
authority must not be on the backs of healthier plans and must be shared across those impacted.

When Congress provides relief, tools must be provided to plans to ensure that plan failures are not
repeated. This can be done by giving plans the ability to proactively manage plan funding and risks
without handcuffing employers with increased withdrawal liability and unsustainable contribution rate
increases.

Finally, to ensure there is not a repeat of this crisis, plans must be given the option to adopt new plan
designs, such as modifications to the existing authority for variable defined benefit plans and 414(k)
plans, such as composite plans, and other new plan designs. This will allow plans to attract new
employers, eliminate the potential for underfunding and help prevent a reoccurrence of the current
funding crisis. This should be done in conjunction with other reforms.

2019 is a critical year for legislative action. Every year that Congress fails to address these problems,
they become more difficult and more expensive to solve while raising the risks of market-based
consequences for the more than 200,000 employers that participate in multiemployer pension plans.
We look forward to working with you in a bipartisan manner to secure the retirement of millions of
active and retired workers and the fiscal stability of their contributing employers and the U.S. taxpayer.

Sincerely,

AGC of Colorado

AGC of Massachusetts

AGC of Metropolitan Washington DC

AGC of Michigan

AGC of Missouri

AGC of Northwest Ohio, Inc.

AGC of Ohio

AGC of Western Kentucky

AGC Oregon-Columbia Chapter

AGC, West Central Ohio Division

American Licorice Company

Annabelle Candy Company, Inc.

Arizona Chapter, Associated General

Contractors of America

Associated General Contractors of America

Associated General Contractors of the Quad

Cities

Associated General Contractors of Wisconsin

Associated Wholesale Grocers, Inc.

Bimbo Bakeries USA

Central Illinois Builders of AGC

Chicagoland AGC

D.W. Dickey & Son, Inc.

Dairy Farmers of America, Inc.

Dean Foods

Delaware Contractors Association

DHL

FAIR Committee of WNY

FCA International

Frankford Candy

International Council of Employers of

Bricklayers and Allied Craftworkers

International Warehouse Logistics Association

Kellogg Company

Maryland AGC

Mechanical Contractors Association of America

National Association of Manufacturers

National Beer Wholesalers Association

National Coordinating Committee for

Multiemployer Plans

National Electrical Contractors Association

Nestlé

Nickles Bakery

Ohio Contractors Association

Penske Truck Leasing Co., L.P.

Schnuck Markets, Inc.

Schwebel Baking Company

Sheet Metal and Air Conditioning Contractors’

National Association

Sodexo

Spangler Candy Company

The Associated General Contractors of New

York State

The Association of Food and Dairy Retailers,

Wholesalers, and Manufacturers

The Association of Union Constructors

The Connecticut Construction Industries

Association, Inc

The Freeman Company

The Kroger Co.

The Signatory Wall and Ceiling Contractors

Alliance

The Standard Group, LLC

The Topps Company

Tramonte Distributors

U.S. Chamber of Commerce

UNFI

United Association of Plumbers and Fitters

United Brotherhood of Carpenters and Joiners

of America

United Dairy, Inc.

Universal Oil, Inc.

UPS