In February 2018, Congress established a Joint Select Committee on the Solvency of Multiemployer Pension Plans to take a comprehensive look at the multiemployer pension crisis and develop legislation to address it by November 30, 2018.
In the following nine months, AFM-EPF Trustees, the Federation and employer representatives spent days on Capitol Hill, meeting with legislators and their staffs to advocate for a solution. The Plan's website also provided tools for participants and contributing employers to call or send emails to their own Members of Congress and the Joint Select Committee, urging them to take action.
While the Joint Select Committee members negotiated for weeks to reach a bipartisan compromise and made considerable progress, they were unable to agree on a solution by November 30, 2018.
Even so, there were some new developments in Congress in 2019. In July 2019, the U.S. House of Representatives passed HR 397, the "Rehabilitation for Multiemployer Pensions Act." Also known as the "Butch Lewis Act," this bill would provide low-interest government loans to struggling multiemployer pension funds, including the AFM-EPF. If necessary, these loans can be coupled with additional financial assistance from the Pension Benefit Guaranty Corporation (PBGC). The bill would provide a multiemployer fund with enough money to pay current retirees and beneficiaries their benefits for life, and allow the fund to grow back to stronger financial footing. Thus far, the Senate version of the Butch Lewis Act (S2254) has not moved forward.
A second legislative proposal was released in November 2019 by Senators Charles Grassley and Lamar Alexander. This proposal would allow struggling multiemployer pension plans to "partition" (which means that they would transfer a portion of participants' benefit liabilities to a second plan administered by the Trustees but funded by the PBGC) in order to remain solvent in the future. The original plans would no longer have to fund the benefit payments associated with these liabilities, which would put plans in a better position to regain their financial footing.
The AFM-EPF would qualify for a partition under this proposal. However, the Trustees do not support the proposal as drafted because it has serious flaws that would negatively affect our participants, our Plan and the multiemployer system as a whole. The current iteration of the proposal imposes overly burdensome benefit reductions, undermines union and employer support for plans, and excessively increases PBGC premiums. In fact, the total size of the Plan-wide benefit reduction could be greater under the Grassley-Alexander proposal than under the Plan's proposed MPRA benefit reduction.
It is hoped that with two competing proposals now on the table, Republicans and Democrats in Congress can work toward a compromise bipartisan solution that would protect our Plan and treat our participants fairly.
The Trustees, the Federation and a great many of our employers will continue to be vocal advocates for our Plan's interests every step of the way. We will continue to alert participants at key moments when it is particularly important that Members of Congress hear from participants. It will take the combined voices of participants, multiemployer funds, unions and employers across the country to achieve a positive outcome in Washington. Participants can use the tools on our website
to contact their Members of Congress.