House Subcommittee Holds Hearing on PBGC and Multi-employer Pension Plans

On Feb. 2, 2012, the House Education and Workforce Subcommittee on Health, Employment, Labor and Pensions held a hearing entitled, “Examining the Challenges Facing PBGC and Defined Benefit Pension Plans.” The hearing explored the financial and management challenges at the Pension Benefit Guaranty Corporation (PBGC), as well as policy proposals intended to strengthen the financial standing of the PBGC. PBGC Director Joshua Gotbaum testified at the hearing and addressed the $26 billion deficit the PBGC currently faces. Gotbaum also discussed several options that Congress could take to encourage more secure retirements. His options included finding ways to strengthen existing plans, facilitate new options, helping individuals understand their retirement choices, and reducing administrative and regulatory burdens.  Gotbaum also addressed multiemployer pension plans and recognized that some of the plans are substantially underfunded and the traditional remedies won’t be enough. The PBGC will publish a multiemployer plan report soon that will help Congress identify reform proposals in the coming months. The Executive Director of the National Coordinating Committee for Multiemployer Plans (NCCMP), Randy DeFrehen, also testified during the hearing.  The NCCMP is a coalition of multiemployer plans and AGC serves on the Retirement Security Review Commission of the NCCMP that is developing legislative recommendations for Congress. Before the hearing, AGC sent a letter to the committee highlighting the significant losses multiemployer plans took in recent years and that recent legislative relief has not been sufficient to offset the economic recession in the construction industry. AGC will continue to work with the agencies and Congress to make structural changes to the current system to ensure construction employers can continue to provide long-term retirement security for their workers. The letter submitted to the committee by AGC provided reform principles to consider while Congress works on reform legislation. For more information, please contact Jim Young at (202) 547-0133 or youngj@agc.org.