Budget Bill Established Joint Committee on Solvency of Multiemployer Plans
On February 9, 2018, Congress established a "Joint Select Committee on Solvency of Multiemployer Pension Plans" (Joint Committee) as part of the recently passed budget act. The goal of the Joint Committee is to improve the solvency of multiemployer plans and the Pension Benefit Guaranty Corporation (PBGC). The Joint Committee is required to vote on a report containing its findings, recommendations, and proposed legislative language by November 30, 2018. This alert describes some of what is known about the Joint Committee and the process it will follow.
The legislation recognizes that over one million individuals participate in multiemployer plans that are projected to become insolvent in the near future. In addition, the PBGC is projected to run out of money to guarantee benefits for these plans in the next 10 years. Accordingly, various members of Congress have expressed concern about the underfunding of multiemployer plans.
Senator Sherrod Brown had proposed the Butch Lewis Act that would rescue insolvent multiemployer plans through subsidized loans.1 Other members of Congress discussed allowing "composite plans," but no actual legislation was introduced. Other groups had proposed ideas for legislation as well. The establishment of the Joint Committee was included in the Bipartisan Budget Act of 2018 (Public Law 115-123) as an interim step that will enable Congress to better consider the various proposals.
Here's some of what we know about the Joint Committee and the process:
- The Joint Committee will consist of 16 members, and we expect that it will be composed of equal numbers of Democrats and Republicans. There will be eight Senators and eight Representatives. Four Representatives will be appointed by each of the Speaker of the House and the Minority Leader of the House. Four Senators will be appointed by each of the Majority Leader of the Senate and the Minority Leader of the Senate. Members of the Joint Committee are to be appointed not later than February 23, 2018 (14 calendar days after the date of enactment).
- The Joint Committee is required to hold its initial meeting within 30 days and must "hold (i) not less than 5 public meetings or public hearings; and (ii) not less than 3 public hearings, which may include field hearings." The report of the Joint Committee and the proposed legislative language will need to be approved by both a majority of the Republican-appointed members and a majority of the Democratic-appointed members. Thus, it appears that without the approval of a majority of the committee appointees from each party, there will be no report and no recommendation.
- The Joint Committee must submit the final report and legislative language to the President, the Vice President, the Speaker of the House of Representatives, and the majority and minority leaders of each House of Congress not later than 15 calendar days after approval by the Joint Committee. The budget bill provides for a specified procedure for considering the legislative recommendations contained in the report. It appears that 60 votes will be needed in the Senate for any legislation to proceed.
Some think Congress has a better chance to address the multiemployer plan issues after the mid-term elections. Even if the select committee is able to agree on a solution to the multiemployer program, there is still a long and difficult process before any bill can be enacted. Thus, it will be critical for members to hear from affected individuals and families. The cost to the Federal government may be a factor in any relief that is provided.
Cheiron is an actuarial consulting firm that provides actuarial and consulting advice. However, we are neither attorneys nor accountants. Accordingly, we do not provide legal services or tax advice.
1See the Cheiron Alert of November 17, 2017, which is here.