Legislation creating a new hybrid multiemployer retirement plan design was unveiled Tuesday on Capitol Hill.
House co-sponsors Phil Roe, R-Tenn., and Donald Norcross, D-N.J., are putting the finishing touches on a bill they said could be introduced within the next few weeks.
The proposal, developed with the National Coordinating Committee for Multiemployer Plans, calls for new multiemployer pension plans with both defined benefit and defined contribution features.
Fund assets would be professionally managed, and the defined benefit component of plans would have to be 120% funded to protect against market volatility.
Participants in existing multiemployer pension funds could join the new plans if a majority elects to do so through their respective collective bargaining agreements, which would also require them to contribute to legacy plans that would be closed to further accruals. Employers would negotiate a fixed contribution amount and be responsible only for their share, as opposed to unfunded liabilities that many multiemployer plans face.
Details are still to come on how the plans would be set up and overseen.
The current multiemployer system "has to be built for growth because the system is stagnant," Mr. Norcross said at a press briefing. Other legislative proposals to revamp multiemployer plans are on "a parallel track" and would not be in conflict, he said.
Brent Booker, secretary-treasurer of North America's Building Trades Unions, which represents 14 international unions, noted at the briefing that the hybrid, or composite, idea exists in Canada, and "extensive stress testing confirms this (would) work in the United States."
Brian Turmail, vice president of public affairs and strategic initiatives with the Associated General Contractors of America, said that the construction industry is in expansion mode now, and in a recent survey of AGC members, 78% supported the new approach.
"This will allow plans to bring in new employers," said Michael Scott, NCCMP executive director.