AGC Submits Comments on Multiemployer Pension Reform Implementation
On April 6, AGC filed two group comment letters on implementation of the Multiemployer Pension Reform Act of 2014 (MPRA). One letter was sent to the Pension Benefit Guaranty Corporation (PBGC) in response to a Request for Information about plan partitions and facilitated mergers. The other letter was sent to the Internal Revenue Service (IRS) in response to a Request for Information about suspensions of benefits.
The following contractor associations joined AGC on the comments: The Association of Union Constructors, Mechanical Contractors Association of America, National Electrical Contractors Association, and Sheet Metal and Air Conditioning Contractors’ National Association. Professionals from Horizon Actuarial Services and the law firm Cox, Castle & Nicholson assisted in the drafting.
The letter to IRS highlights that the benefit suspensions under MPRA are designed to address the pressing needs of plans in critical and declining status to act expeditiously to avoid insolvency while saving the maximum amount of benefits possible. AGC believes the intent of the statute is clear, but that the approval process should include a review of the decision‐making process in designing the benefit suspensions and not a full reconsideration of the judgment of the plan trustees and their advisors. AGC asked IRS to provide guidance that clearly sets expectations for the applications while not creating unnecessary burdens on plan trustees that could delay necessary action. Once guidance has been issued, IRS should review and approve applications for benefit suspensions as quickly as possible.
The letter to PBGC reiterates comments to the IRS regarding the need for expedient review. It further asserts that, because partitions and facilitated mergers will usually occur concurrently with benefit suspensions, it is important for PBGC and Treasury to communicate actively with each other throughout the approval process.
AGC will continue to monitor the implementation of MPRA and comment when appropriate. AGC is also advocating for additional legislative reforms to the multiemployer system, including the creation of new plan designs which would further help stabilize the system while limiting employer liability and providing lifetime retirement security to plan participants.
For more information, contact Jim Young at email@example.com or Denise Gold at firstname.lastname@example.org.
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