The Cleveland Building and Construction Trades Council hosted the “lunch and learn” event on Feb. 27 to hear updates on efforts by Congress to solve problems related to failing multiemployer pension plans.
More than 70 building trades leaders and signatory contractors gathered last month at Laborers Local 310 Hall to listen to event keynote speaker Michael D. Scott, the Executive Director for the National Coordinating Committee for Multiemployer Plans (NCCMP), discuss what CBCTC Executive Secretary Dave Wondolowski described as, “the biggest issue facing our industry today.”
The NCCMP is a non-profit, non-partisan organization dedicated to the advocacy and protection of multiemployer pension plans, their sponsors, participants and beneficiaries.
Multiemployer pension plans are private-sector defined benefit pensions usually co-sponsored by multiple employers in a common industry, established under a collective bargaining agreement with a union.
According to Scott, over the past 10 to 15 years, roughly 10 percent of all multiemployer plans are in critical danger of failing, and another roughly 34 percent are struggling to avoid a similar classification. Since the Great Recession, some multiemployer pension plans have become dangerously underfunded and are on track to become insolvent.
Scott said under normal circumstances, when a pension plan becomes insolvent the U.S. pension insurance system, operated by the Pension Benefit Guaranty Corp. (PBGC), would step in. However, the PBGC, which is financed by premium sponsors, not tax dollars, was similarly overwhelmed by the Recession, and could be insolvent in six to 10 years without changes. This scenario could create another major financial crisis for the U.S. economy.
A failed attempt by Congress last year to produce a solution acceptable to all interested groups makes action this year of the utmost importance. If a solution is not agreed upon this year, Scott believes any help will not come until at least 2021, following the next presidential election. He fears waiting two more years will be too late to save a number of struggling pension plans already on the path to insolvency.
He said affiliated members of the Cleveland Building Trades and other Ohio building trades do not have the luxury of inaction. They must understand their futures hinge on finding a solution to these failing plans.
Scott urged attendees to contact their U.S. Representative or U.S. Senator and tell them their vote – and the votes of their family members – will be decided based on who supports the best fix for multiemployer pension plans.