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MCAA President Lynch, Others Hopeful About Pension Plan Reforms

Feb. 27, 2013
According to the Quality Construction Alliance Coalition (QCA), the reform proposals were crafted by national experts from the business and labor groups that collectively sponsor this country’s 1500-plus multiemployer plans that provide stable and reliable pension benefits to over 10 million workers and their families. Importantly, the proposals would allow plans to rebalance the disproportionate funding risks currently faced by contributing employers, and do so in ways that will make these plans more sustainable in the long term for the benefit of plan participants, sponsoring employers and the tax paying public.

There are three basic components to the PMRS proposals.
1. It would allow plans in severely distressed conditions – only a small minority of plans, but still ones that present big risks to the system overall – to take remedial measures that distribute the self-help remedies among contributing employers, active participants, and retirees and beneficiaries. This involves serious remedies, to be sure, but allows the plans the chance to recover and keep the PBGC insurance fund viable well into the future.
2. For plans that are facing less severe problems, the proposal allows the option for plans to anticipate funding problems earlier than current law allows and restore balance before more drastic options would be exercised.
3. And finally, for plans going forward, bargaining parties and trustees could chose more innovative approaches that would avoid the risks of extreme funding volatility with conservative plan designs that would be safer for participants and more sustainable for contributing employers.

“The options for plans to address funding problems and plan innovations allowed under the PMRS proposal would no doubt prove very effective for local area plans and bargaining parties to better address market challenges in the future,” says James J. Murphy Jr., a principal in Murphy Company, a mechanical contractor based in St. Louis MO, with operations in several cities nationwide. Mr. Murphy also chairs MCAA’s pension reform advisory task force. Murphy Company participates in dozens of local and national multiemployer funds nationwide.

“This new proposal will give trustees the tools and options they need to explore ways to place these valuable benefit systems on solid footing for the long term,” Murphy says, adding that, “the sustainability and security of these benefit systems are essential to our businesses, as well as the beneficiaries who rely on them, and the economies of the communities where the participants live.”

“The work product of the RSRC is the result of over a year-long deliberation of business, labor and plan technical experts who marshaled virtually hundreds of years of experience among them to weigh all the various options and ways to put these plans back onto solid ground for the indefinite future,” MCAA CEO John R. Gentille adds, stressing that “the RSRC is to be commended for their skill, acumen, perseverance and professionalism. It’s now up to our associations and local affiliates across the country to make sure our lawmakers, the business community and press give these reform proposal the fair hearing and balanced assessment they richly deserve to enact these sound proposals in due but rapid course,” Gentille says.

The Mechanical Contractors Association of America, Inc. (MCAA) serves the unique needs of approximately 2,500 firms involved in heating, air conditioning, refrigeration, plumbing, piping, and mechanical service.