Wondering about the latest multiemployer pension reform updates? You can always check the International Foundation Multiemployer Pension Reform Act (MPRA) page for updates, but here are four things I have on my radar—including the very latest on the Butch Lewis Act.
1. The Butch Lewis Act
Updated: July 25, 2019:The Rehabilitation for Multiemployer Pensions Act (HR 397), also known as the Butch Lewis Act, was introduced January 9, 2019 and passed the House on July 24, 2019. Also on July 24, 2019 the Senate introduced a companion bill (S 2254) and PBGC Director Gordon Hartogensis issued a statement calling for Congress to enact a bipartisan long-term solution on the multiemployer pension system.
The bills would create a new agency called the Pension Rehabilitation Administration within the Department of the Treasury and a related trust fund to make loans to multiemployer defined benefit pension plans either in critical and declining status (including any plan with respect to which a suspension of benefits has been approved) or insolvent, if the plan became insolvent after December 16, 2014 and has not been terminated. Treasury must issue bonds to fund the loan program and transfer amounts equal to the proceeds to the trust fund established by this bill. The Pension Rehabilitation Administration may use the funds, without a further appropriation, to make loans, pay principal and interest on the bonds, or for administrative and operating expenses. The bills allow the sponsor of a multiemployer pension plan that is applying for a loan under this bill to also apply to PBGC for financial assistance if, after receiving the loan, the plan will still become (or remain) insolvent within the 30-year period beginning on the date of the loan.
For more details, see Update on the Butch Lewis Act and the Congressional Research Service summary on HR 397 updated July 19, 2019.
2. The Pension Accountability Act
The Pension Accountability Act (S 833) was introduced on March 14, 2019. This bill amends MPRA with respect to participant votes on the suspension of benefits under multiemployer plans in critical and declining status. Currently, unreturned participant ballots are counted as a “yes” vote for benefit suspensions. The bill would change the voting process to count only returned ballots.
3. The Hearing The Cost of Inaction: Why Congress Must Address the Multiemployer Pension Crisis
To pick up where the Multiemployer Pension Solvency Discussions: What’s Next? blog left off, the Joint Select Committee on Solvency of Multiemployer Pension Plans expired November 30, 2018 without proposing a reform package. On March 7, 2019, the House Committee on Education and Labor—Subcommittee on Health, Employment, Labor, and Pensions (HELP) took its first action to continue the work of the Joint Select Committee by holding a hearing titled The Cost of Inaction: Why Congress Must Address the Multiemployer Pension Crisis.
4. The Proposed Rule to Simplify Methods for Computing Withdrawal Liability The Pension Accountability Act
On February 6, 2019, the Pension Benefit Guaranty Corporation (PBGC) issued a proposed rule on simplified methods for determining an employer’s share of unfunded vested benefits and an employer’s annual withdrawal liability payment for multiemployer pension plans in endangered or critical status. For more details on key provisions, see this Proskauer alert. It’s expected that PBGC will review public comments and issue a final rule with an effective date.
The International Foundation will continue to follow legislative and regulatory updates for multiemployer pension plans. Check out our Multiemployer Pension Reform Act (MPRA) page for future updates on multiemployer pension reform.
Jenny Lucey, CEBS
Manager, Reference/Research Services at the International Foundation
The latest from Word on Benefits:
harold smith
need to do something for retieres that have worked a life time and where promised a pension