Senators Release Multiemployer Pension Reform Proposal

from Pension Fund Notes

November 21, 2019

U.S. Senators Charles Grassley (R-IA) and Lamar Alexander (R-TN) yesterday released a proposal that would provide financial relief to troubled multiemployer pension plans and make some structural changes to the multiemployer pension system. Sens. Grassley and Alexander are chairmen of the Senate Finance and Senate Health, Education, Labor and Pensions Committees, respectively. We are encouraged to see activity in the Senate to try to address the nationwide multiemployer pension crisis.

The proposal is laid out in a 79-page technical explanation. The Trustees and their expert advisers are reviewing the proposal to determine if it would address the challenges facing the AFM-EPF and to evaluate the other ways that the proposal may affect our Plan and our participants.

As we informed participants in July, the House of Representatives passed the Butch Lewis Act with largely Democratic support, but the bill has not moved forward in the Republican-controlled Senate. We are hopeful that this new proposal will restart negotiations between Republicans and Democrats in Congress to arrive at a bipartisan legislative solution.

With only one month remaining until Congress adjourns, it is unclear if legislation can be passed and signed by the President this year. The Trustees will continue to take every action available under existing federal law to prevent the Fund from running out of money to pay benefits. This includes applying to the U.S. Treasury Department to reduce benefits under the Multiemployer Pension Reform Act (MPRA). If Congress passes legislation that allows us to withdraw our MPRA application or roll back benefit reductions while still avoiding insolvency, then the Trustees plan to do that.

As discussed in previous issues of Pension Fund Notes, the Trustees expect to submit a MPRA application in late December. Participants will receive a notice in January that will include a personalized statement with each participant’s current monthly benefit and estimated reduced benefit, if applicable. If the MPRA application is approved by the U.S. Treasury Department, benefit reductions would not go into effect until January 2021.

We will report back to you once the Trustees and their advisers have evaluated the Grassley-Alexander proposal. We encourage all participants to use the tools on the Plan website to contact your Member of Congress and urge them to take action to protect your retirement security.