US - A coalition of trade unions, employers and affiliated organisations have presented members of Congress with draft legislation that will reform the funding rules for multiemployer pension plans.
The “fairly aggressive” plan would require faster funding of accrued actuarial liabilities, increase the maximum deductible amounts that employers can claim on contributions to the plans and would require plan trustees to develop a “benefit security plan” if the funded status of the pension scheme began to erode, said Randy DeFrehn of the National Coordinating Committee for Multiemployer Plans.
The proposal has been presented to members of the House and Senate committees that oversee legislation concerning multiemployer pension plans, and formal legislation containing parts of the proposal is anticipated to be introduced in late May or early June, DeFrehn said.
Multiemployer pension plans cover union members in a variety of industries. The schemes are jointly managed by trade unions and the employers who make contributions to the funds, and are overwhelmingly defined benefit schemes. The plans cover workers who generally move frequently between jobs, such as lorry drivers and construction workers.
“What we’re suggesting here is that for a plan in significant financial trouble, rather than have it default because of a deficiency, the bargaining parties would review a plan that was proposed by the trustees to reduce some of the ancillary benefits so that the benefits could be supported by the contributions that are coming in,” DeFrehn said.
“It wouldn’t really have an effect on existing pensioners. it would be for people who have not yet retired. Some of the sweeteners that have been added over the years when times were good, and sounded like a good idea at the time, these might be some things that might get rolled back.”
The plan was developed by representatives from trade unions and employers in the construction, lorry driving, food service and entertainment industries, DeFrehn added.
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