Struggling multiemployer pension funds will be able to reduce retiree benefits under legislation that received final Senate approval Saturday as part of a congressional spending package already approved by the House.
The multiemployer piece of the legislation, aimed at preventing plans from becoming insolvent and winding up at the Pension Benefit Guaranty Corp., also increases PBGC multiemployer annual premiums to $26 per participant from $13.
Retiree groups expressed deep disapproval, but Randy DeFrehn, executive director of the National Coordinating Committee for Multiemployer Plans, which spearheaded the proposal, said in a statement that it brought workers and retirees “one big step closer to having their retirement security restored.”
The bill, which President Barack Obama is expected to sign, also includes wording clarifying that common business transactions will not add liability for defined benefit plan sponsors unless the transactions could lead to PBGC liabilities. Sponsor groups have argued that recent PBGC enforcement of the rule known as Section 4062(e) “demonstrated a fundamental misinterpretation of the law,” American Benefits Council President James Klein said in a statement.