Bipartisan legislation was introduced to Congress on Feb. 14 that could help save multiemployer pension funds of more than 10 million Americans.
U.S. Reps. Phil Roe (R-Tenn.) and Donald Norcross (D-N.J.) introduced H.R. 4997, the Give Retirement Options to Workers (GROW) Act. This legislation authorizes the creation of composite plans, which modernize traditional multiemployer pension plans by combining key features of defined benefit and defined contribution plans.
Under the GROW Act, workers will still receive lifetime income, and the benefits they earned under a traditional multiemployer plan are protected, even after they are shifted into a composite plan.
For employers, the GROW Act offers greater stability by eliminating the uncertainty and volatility currently faced in the multiemployer system. Under the plan, employers will negotiate a fixed contribution rate and limit their risk, and employees will gain financial security.
According to an article on the GROW Act in the financial trade publication “Pensions and Investments,” participants in existing multiemployer pension funds could join the new plans as part of their usual collective bargaining process, which would also require them to contribute to legacy plans that would be closed to further accruals.
Fund assets would be professionally managed and the composite component of plans would have to be 120 percent funded to protect against market volatility.
In a prepared statement on the North America’s Building Trades Union website, the NABTU thanked Reps. Roe and Norcross for introducing the legislation and said the bi-partisan bill is “designed to ensure both the retirement security of American workers and the financial health of the job creating employers of America by strengthening and modernizing the multiemployer pension plan system.”
Norcross, a former union electrician, released a statement on his website saying the GROW Act offers another tool in the toolbox for workers to grow their retirement savings and employers to grow their businesses.