Bi-partisan legislation one piece of plan to save multiemployer pensions
On Feb. 14, U.S. Reps. Phil Roe (R-Tenn.) and Donald Norcross (D-N.J.) introduced H.R. 4997, the Give Retirement Options to Workers (GROW) Act. This legislation authorizes the creation of composite plans, which modernize traditional multiemployer pension plans by combining key features of defined benefit and defined contribution plans.
“I’m an electrician by trade who participated in the multiemployer pension system for 37 years, as both a rank-and-file worker and a negotiator. The GROW Act offers another tool in the toolbox for workers to grow their retirement savings and employers to grow their businesses,” said Norcross in a statement on his website.
Under the GROW Act, qualified retired workers will still receive lifetime income, and the benefits they earned under a traditional multiemployer plan are protected even after they are shifted into a composite plan under the GROW Act.
For employers, the GROW Act offers greater stability by eliminating the uncertainty and volatility currently faced in the multiemployer system. Under the plan, employers will negotiate a fixed contribution rate and limit their risk, and employees will gain financial security.
In a prepared statement on the North America’s Building Trades Union website, the NABTU thanked Reps. Roe and Norcross for introducing the legislation and said the bi-partisan bill is “designed to ensure both the retirement security of American workers and the financial health of the job creating employers of America by strengthening and modernizing the multiemployer pension plan system.”
“While the Joint Select Committee will address those multiemployer plans at critical risk of insolvency today, the GROW Act offers an immediate way forward for Congress to safeguard the multiemployer system for tomorrow,” said the NABTU. “The GROW Act allows plans that are healthy today to make structural changes, so they can continue to provide retirement security for American workers and their families in the years to come.”
In a statement on his website, Roe said, “I’m confident this could be one piece of the multi-pronged approach needed to address the multiemployer pension crisis. By encouraging these plans – sometimes called “composite” plans – we are hoping to keep multiemployer plans as a viable retirement option for employees and employers alike.”
The Bipartisan Budget Act, signed into law on Feb. 20, created a bicameral, bipartisan Joint Select Committee on the Solvency of Multiemployer Pension Plans to develop solutions to the multiemployer pension crisis.
This committee is charged with improving the solvency of multiemployer pension plans as well as the Pension Benefit Guaranty Corp. and is required to hold public hearings and vote on legislative recommendations by Nov. 30. The select committee will be dissolved by Dec. 31.
The GROW Act was placed in both the House Education and the Workforce Committee and the House Ways and Means Committee for further consideration.