Representatives of multiemployer plans proposed changes in pension law today to the Senate Health, Education, Labor and Pensions Committee. At a hearing, Jeffrey Noddle, chairman, president and CEO of SuperValu Inc., told the committee that participating employers need more access to information about the current funding levels of multiemployer plans. "Without this information, it is difficult to engage in collective bargaining in an informed manner and to work with the plan trustees to address the underfunding problem," he said.
Mr. Noddle also asked senators to support a proposal that would require the trustees of multiemployer plans that are only 65% to 80% funded to work with their actuaries in developing a plan to reach fully funded status over a seven-year period. "While many of the multiemployer plans in our industry are well funded, the funding standard account in some of these plans could reach a crisis state in four to six years if some of the laws governing these plans are not changed," he said.
Cash balance and other hybrid pension plans require urgent legislative changes to protect their status, said Bill Sweetnam, a partner in the Groom Law Group and former benefits tax counsel at the Treasury Department. Mr. Sweetnam, who testified on behalf of the American Benefits Council, urged the senators to clarify that such plans are not age discriminatory and protect methods that employers have chosen for protecting the benefits of older workers during cash balance conversions, without mandating protections proposed by some participant groups.
Sen. Tom Harkin, D-Iowa, a member of the committee, announced plans to reintroduce legislation he had earlier proposed that would require employers to allow all employees to stay in the pension plan when they convert to a cash balance plan and prevent companies from instituting "wearaways" or pension plateaus for older workers during conversions.