The Congress-passed $1.9 trillion COVID-relief bill contains multiemployer pension plan provisions of interest to contributing construction contractors including specific COVID related provisions and funding relief for eligible plans. The COVID related pension provisions are intended to provide plans relief to plans that were impacted by COVID with investment losses or contribution losses. Meanwhile the bill provides significant multiemployer pension relief through a Special Financial Assistance Program by providing a one-time lump sum payment to eligible plans to pay all benefits through 2051 (30 years) with no expectation of repayment. It is estimated there are about 100 critical and declining plans, some critical plans and a few endangered plans in the construction industry that could be eligible for some relief. Starting in 2031 PBGC premiums would be increased to $52/year and indexed for inflation every year after for all plans and participants. Premiums are currently scheduled to be about $43 in 2031 because of indexing.
Looking ahead, there will be opportunities for significant regulatory rulemakings and interpretations on important provisions like withdrawal liability calculations, future accruals, and employer contribution rates. In recent years there have significant legislative threats to the multiemployer pension plan system including massive PBGC premium increases, employer assessments, participant benefit reductions, increased withdrawal liability and mandating lower assumption rates. None of those harmful public policy changes are included the American Rescue Plan Act. However, at the same time a long AGC advocated policy change, authorization of Composite Plan design, which incorporates the best features of DB and DC plans by offering voluntary options to share risks, funding stability, lifetime income to participants, and limiting employer obligations to negotiated contributions only, without cost to the taxpayer, was not included. AGC will make authorization of new plan design a priority and will ensure the implementation of the American Rescue Plan Act considers the impact on construction employers.
For more info, contact Jim Young, Senior Director, Congressional Relations, HR, Labor and Safety, at jim.young@agc.org or (202) 547-0133.