Re:   Include GROW Act in Joint Select Committee Recommendations

July 23, 2018

The Honorable Orrin Hatch                                     The Honorable Sherrod Brown
Co-Chair                                                                         Co-Chair
Joint Select Committee                                           Joint Select Committee
219 Dirksen Senate Office Building                        713 Hart Senate Office Building
Washington, DC  20510                                             Washington, DC  20510

Re:   Include GROW Act in Joint Select Committee Recommendations

Dear Co-Chairs Hatch and Brown:

Thank you for your service on the Joint Select Committee on Solvency of Multiemployer Pension Plans. Your task is not an easy one. Like you, the Construction Employers of America (“CEA”) and the 15,000 signatory contractors and 1.4 million employees we represent have grave concerns about the future and long-term sustainability of the country’s multiemployer pension system. That is why our organizations strongly support the Giving Retirement Options to Workers Act of 2018 (H.R. 4997 or “GROW Act”), introduced by Reps. Phil Roe (R-TN) and Donald Norcross (D-NJ). We respectfully request your support for this important measure and that you work with us to ensure its inclusion in any recommendations put forth later this year by the Joint Select Committee.

CEA employers are contributing employers to multiemployer pension plans. In many cases, they are also plan participants. Our members see the value of providing lifetime retirement benefits to the high-skilled building and construction craftspeople they employ to deliver the quality construction work their customers expect. The looming multiemployer pension crisis threatens the ability of CEA members to continue providing these benefits to their employees.

Over the past several months the Joint Select Committee has heard first-hand from an array of stakeholders the impact that the collapse of the multiemployer pension system would have on retirees, workers, employers, and our economy. You have also heard testimony from both small and large businesses on the challenges that the current law and regulations governing this system have created for employers who are trying to abide by their commitment to provide lifetime retirement income to their workers while maintaining their ability to remain competitive and grow their companies. While Congress cannot alter the economic forces that have put at risk the solvency of hundreds of these plans, it can and must take steps to not only stabilize the current multiemployer pension system but protect its ability to provide for current and future generations of workers and employers.

We hope the crisis facing failing plans, and now facing Congress, helps everyone understand that the current defined benefit system does not guarantee retirement benefits and that the viability of contributing employers and the system is at risk without new plan options. While we recognize the need to address the looming insolvency of failing plans, we are also concerned about the impact of plan failures on the multiemployer system as a whole and urge the Joint Select Committee pursue a comprehensive solution to protect the retirement security of plan participants and the viability of contributing employers.

The GROW Act represents a reasoned approach to updating current law and modernizing our country’s multiemployer pension system through the authorization of “composite plans” as an option that local joint management and labor plan trustees may voluntarily consider to ensure the stability and long-term viability of their pension funds and the benefits they provide for highly skilled building and construction trade workers. Defined benefit plans and defined contribution plans, which each have serious shortcomings, are the only pension plan options available under the current multiemployer pension system. Composite plans, however, are designed to blend the most attractive components of existing defined benefit and defined contribution pension plans, ensuring lifetime employee retirement benefits while protecting contributing employers and the Pension Benefit Guaranty Corporation (“PBGC”) during disruptive economic swings. If a composite plan funding level falls below 120% of its obligations, contribution rates would go up and accrual rates would go down before any benefits were reduced. Any future benefit reductions would be a last resort for employers and labor to consider together if and when necessary.

The GROW Act would also give multiemployer retirement plans the ability to secure their future at no cost to the federal government or pension plan participants, and would still give employers the opportunity to offer a lifetime retirement benefit to their employees. As plans transition to composite plans, the PBGC is protected from the failure of more plans while at the same time premiums continue to be paid to the PBGC for legacy defined benefit plans.

In recent years a significant number of employers have migrated from offering defined benefit plans to offering defined contribution plans, a system in which workers cannot save enough during their career and all too frequently outlive their benefits. CEA employers see the value in lifetime retirement benefits for our employees and we are committed to continuing to provide those benefits. Authorization of composite plans would allow CEA employers to continue to provide lifetime retirement benefits while allowing flexibility for our members’ companies during times of great economic hardship, which would otherwise put their businesses—and the defined benefit plans they offer—at risk. In short, we view composite plans as vital to ensuring contributing employers’ ability and willingness to remain in the multiemployer pension system, and their continued ability to ensure retirement security for the skilled American workers they employ.

The recommendations of the Joint Select Committee will have profound and lasting effects on the future of America’s multiemployer pension plans and the millions of Americans who depend on these plans during their twilight years. CEA encourages the Joint Select Committee to put forward bipartisan, common sense recommendations that can pass the House and Senate and be signed into law. The GROW Act is an affordable, responsible, thoughtful option to bolster the multiemployer pension system and provide additional retirement plan options for management and labor to consider together. We hope that you will work with us to ensure this legislation is included in the final legislative recommendations package put forward by the Joint Select Committee.

CEA’s seven employer associations include FCA International, International Council of Employers of Bricklayers and Allied Craftworkers, Mechanical Contractors Association of America, National Electrical Contractors Association, Sheet Metal & Air Conditioning Contractors National Association, Signatory Wall and Ceiling Contractors Alliance, and The Association of Union Constructors. We are available to meet with you or your staff to discuss the benefits of composite plans and the benefits of such plans. You may contact me at or at 202-637-6820 with any questions or to speak to our associations and their members.


Jack Jacobson
Construction Employers of America


CC: Members of the Joint Select Committee on Solvency of Multiemployer Pension Plans