October 16, 2013


The War on Pensions Goes Federal : Congress could apply a 'haircut' to previously sacrosanct pensions. (COLE STANGLER, 10/16/13, In These Times)

Like the multi-employer health plans that have become a flashpoint in Obamacare debates, multi-employer pensions offer workers "portability"--a construction worker, for instance, can work for a dozen different employers covered by the same union and continue paying into the same pension fund. Established in union contracts with employers, these plans cover roughly 10 million workers, mostly in construction, but also in manufacturing, retail, service and transportation. 

While the reform bill's language has not yet been drafted, it is expected to closely mirror a February 2013 proposal, Solutions not Bailouts, from the National Coordinating Committee for Multi-Employer Plans (NCCMP), according to the group's executive director Randy DeFrehn. The proposal calls for granting special authority to pension trustees--comprised of representatives from labor and management--to take "early corrective actions" to prevent the future insolvency of the plans. These actions could include cutting benefits to current retirees like Adams. 

A hearing on the topic by the pension subcommittee of the House Education on Workforce was scheduled for October 10, but has been delayed as a result of the shutdown and debt ceiling crises.

The NCCMP, made up of trade unions and employers that administer multi-employer health and pension plans, has poured hundreds of thousands into lobbying for the bill. Its efforts are lent clout by the fact that the group, at least nominally, represents both labor and management. DeFrehn boasts that his organization has lobbied Congress with representatives from the labor movement, including the Central States Fund and several building trades unions. And a number of different unions with multi-employer pension plans, including the Teamsters, International Association of Machinists and Aerospace Workers (IAM), the International Brotherhood of Electrical Workers (IBEW), Service Employees International Union (SEIU) and the United Food and Commercial Workers (UFCW), participated in the NCCMP commission that led to the Solutions not Bailouts recommendations.

Of these unions, only the IAM has publicly broken from the NCCMP's anticipated proposal. Frank Larkin, IAM's communications director, calls the proposed change "the most significant cutback in retiree protections in nearly 40 years."

That's not hyperbole. If adopted, the proposal would strike at the core of Employee Retirement Income Security Act of 1974, designed to keep private-sector employers from withholding promised benefits. Under this foundational pension law and its 1980 amendment, employers are sometimes allowed to renege on promises made to future recipients, but the benefits of current retirees have long been deemed sacrosanct--with very few exceptions.

Posted by at October 16, 2013 8:01 PM

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