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December 15, 2014

Congress passes many of the recommendations of Solutions Not Bailouts

On Saturday night, Congress passed the Consolidated and Further Continuing Appropriations Act, 2015, which contains many of the recommendations put forward in Solutions Not Bailouts.  This legislation will provide many troubled multiemployer plans with the tools they need to remain solvent and protect long-term participant benefits, and will also address several technical issues and shortcomings of the Pension Protection Act.

While this legislation represents a landmark achievement, the job is not complete. We are committed to continuing to work on this issue until we successfully pass companion legislation in the next Congress. That legislation will authorize the new and innovative plan designs that will give multiemployer plan trustees the flexibility they need to remove the remaining obstacles that prevent plans and contributing employers from taking the next step in the evolutionary process. These innovations are necessary so that plans in some industries can continue to provide the modest and dependable retirement income that allows plan participants to retire with dignity after having spent a lifetime of service in their chosen fields.

AGMA was part of a coalition that went to Washington D.C. in December to speak about the importance of Solutions Not Bailouts to our local funds. The association will continue to be a part of the conversation via FCA International.

The congressional plan calls for allowing trustees of severely underfunded plans to adjust vested benefits before falling into the crosshairs of a needed bailout. Meanwhile, it will also give PBGC the power to take action for failing plans and allow adjustment to current plan premium structure. Other modifications include providing protections for the most vulnerable retirees, which include disabled and individuals aged 75 and older, all the while requiring plan participant approval on all proposed benefit adjustments including the “fail-safe mechanism” for needed funding assistance.