Congress passes major change to law on union pensions [View all]

[Omaha Steve]

House Education and Workforce Committee chair John Kline (R-Minn.) explains the pension proposal he cosponsored with Rep. George Miller (D-Calif.)

http://nwlaborpress.org/2014/12/congress-passes-major-change-law-union-pensions/

Dec 16, 2014

By DON McINTOSH, Associate Editor

Severely underfunded union pension plans will be allowed to reduce current retiree benefits in order to avoid future insolvency, under a last-minute amendment attached to the $1.1 trillion federal government appropriations bill known as the “CRomnibus.”

The amendment was sponsored by an unlikely duo: anti-union House Education and Workforce Committee chair John Kline (R-Minn.), and pro-union former committee chair George Miller (D-Calif.), who was serving out his final days of office after 20 years. The 161-page amendment came under the unwieldy name of Amendment 1 to H Res 776 (which itself governed consideration of HR 83). The proposal had support from a number of unions, and opposition from others. It was drawn up by committee staff based for the most part on “Solutions, Not Bailouts” — a proposal introduced last year by the National Coordinating Committee for Multiemployer Plans (NCCMP), a group representing union benefit plans.

Amendment 1 covers multi-employer pension plans — plans that unions jointly sponsor with employer groups, overseen 50-50 by trustees appointed by the union and employers. Employers contribute under the terms of collective bargaining agreements, and the funds are invested so that the plans have enough to pay guaranteed monthly benefits when employees retire. All told, about 10 million people are in multi-employer plans, which are common in unionized construction, trucking, grocery, and service industries. They’re much easier for small employers to join up, and they’re much more stable than single-employer pensions, which fail when the single company fails. But today, many multi-employer plans are in crisis, thanks to stock market downturns and declining employment in union industries. Like single employer pension plans, multi-employer pensions are insured through the Pension Benefit Guaranty Corporation, but PBGC pays out only a fraction of promised benefits when a plan runs out of money, and PBGC is itself in danger of insolvency.

Amendment 1 would shore up PBGC finances by doubling the per-participant premium paid by multi-employer pension plans to $26 per person per year.

FULL story at link.