Dear Senator Hatch:
On behalf of the Construction Employers of America ("CEA") and our five member associations, we submit for the March 1, 2016, hearing record this letter and attached documents.
CEA strongly urges the Finance Committee to authorize "composite plans" in any legislation it
considers to reform the current collectively bargained multiemployer pension system. Composite plans would provide employers and labor the option of selecting a multiemployer retirement plan that provides lifetime income for retired workers similar to defined benefit plans while providing cost predictability and reduced risk for employers similar to defined contribution plans.
Last year the House Education and the Workforce Committee held a hearing to examine reforms that would modernize the multiemployer pension system during which composite plans were thoroughly reviewed. Witnesses and stakeholders agreed that composite plans could provide annuitized income for employees while ensuring greater certainty for employers that defined benefit plans lack.
Attached for the Committee's consideration are two documents that provide additional information on composite plans. Josh Shapiro's July 2015 white paper, "Composite Plans: A New Approach to Modernizing Multiemployer Retirement Benefits", provides a comprehensive review of composite plans and how they operate in practice. Eli Greenblum and Aldwin Frias's January 2016 report, "'Composite Plan' Stress Testing", reviews three scenarios that examine the long-term resiliency of composite plans.
Composite plans were jointly developed by labor and management, have been thoroughly
researched, and undergone extensive stress testing. We urge Congress to authorize composite
plans as soon as possible.