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Time to Modernize Multiemployer Pension System

The Subcommittee on Health, Employment, Labor, and Pensions, chaired by Rep. Phil Roe (R-TN), today held a hearing to discuss ways to further strengthen the multiemployer pension system. The hearing, entitled, “Examining Reforms to Modernize the Multiemployer Pension System," follows a bipartisan proposal enacted into law last year that includes policies to shore up the federal backstop for multiemployer plans and provide the trustees of these plans new tools to avoid insolvency.

“Today’s hearing represents the next step in a long process to strengthen the retirement security of America’s workers,” remarked Chairman Roe. “This effort began more than three years ago for a simple reason: A pension crisis threatened the well-being of countless workers, employers, and retirees, as well as American taxpayers ... Through our continued oversight, it has become abundantly clear that workers need new options to help plan for their retirement.”

“We need new tools in our toolbox to address the challenges which were not contemplated when multiemployer pension rules were initially put in place,” said Andrew Scoggin, Vice President of Albertson’s LLC. “Congress needs to equip employers and employees with the regulatory flexibility necessary to make changes to benefits programs that do not run afoul of beneficiaries, their employers, or the system as a whole.”

To help accomplish this goal, in 2013, the National Coordinating Committee for Multiemployer Plans (NCCMP) released a proposal that would allow for the creation of so-called “composite” plans. These innovative plans would combine aspects of both defined benefit and defined contribution plans to deliver annuitized, lifetime income without the drawbacks associated with traditional multiemployer plans.

Randy DeFrehn, Executive Director of the NCCMP, described the composite plan model as the “next logical step in the evolution” of multiemployer plans. DeFrehn added, “The composite plan provides the best of both worlds. If enacted, the structure and safeguards will provide greater long-term retirement security by creating a path for contributing employers to remain in and new employers to enter the multiemployer system without presenting existential risks, while providing the greatest possible benefit for covered participants.”

Speaking in support of NCCMP’s proposal, Steve Sandherr of the Associated General Contractors of America testified, “We think Congress should allow collective bargaining parties or plan trustees the option to decide whether to adopt the composite plan model, which more equally distributes some of the risks associated with retirement plans so employers don’t have to shoulder the entire burden … the new plan design is essential to the shared goal of protecting both those who earn benefits and those employers that contribute retirement benefits to them.”

Mark McManus, General Secretary-Treasurer of United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry, echoed this sentiment: “From the perspective of the United Association, the most important feature is that these plans provide for the accumulation of benefits and provide a life time benefit in a manner similar to traditional defined benefit plans.” McManus continued, “The opportunity for creative solutions to our retirement income dilemma is within our grasp. We strongly encourage Congress to take advantage of it …”

Chairman Roe and other members noted their intention to do just that. “It is easy to find areas of disagreement on this subcommittee,” concluded Chairman Roe, “especially as we address policies so central to the well-being of the American people. But I have always appreciated the bipartisan approach the committee has taken on this important issue, and I pledge to do my part to continue that tradition in the work that lies ahead.”

To learn more about today’s hearing, read witness testimony, or to watch an archived webcast, visit


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