TAUC Summer Summit: Tackling the Big Issues in Cincinnati (Part 5 - Pension Reform)

August 20 2014

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Pension Reform Update

As almost everyone in our industry knows, the Pension Protection Act of 2006 expires at the end of this year. Unions, contractors and trade associations like TAUC have been working at a breakneck pace to convince Congress to pass much-needed reform legislation before it’s too late. Where do things stand now? What are the chances of getting a bill passed?

To answer those questions, the Summer Summit brought in Chris Heinz, founding partner of Grossman Heinz Public Affairs. Heinz is a familiar face in the union pension world. He has worked for more than 25 years as a local, state and congressional lobbyist, and previously served as the Political and Legislative Director of the United Brotherhood of Carpenters and Joiners of America. For the past several years, he’s been focused on multiemployer pension reform, working with Capitol Hill legislators and their staffs to craft a solution that will save the retirements of countless workers.

Bad weather prevented Heinz from flying to Cincinnati, so he spoke to the attendees via Skype.

Heinz started off by discussing pension reform activity in the House of Representatives. Republicans have been working on language for almost a year, he said. Two parts of the bill – technical corrections to the legislative language and the portion that deals with “red zone,” or deeply troubled plans – are essentially completed. “Those were probably the easiest to do,” Heinz said. “Then we came to the new plan design.” That piece of the bill has taken almost eight months (and counting) to write, he reported.

“We spent an enormous amount of time working through the process. I think we’re getting there. We’re not done yet, but we’re pretty close.” Heinz added, “In the last eight to ten weeks or so, the Democrats have been actively engaged, identifying where there may have been areas of disagreement. Their staff has been fairly tight-lipped, but I think from the questions we’re getting back on the technical side [indicate] they are not deep philosophical problems.”

“What the Democrats really want is for plan participants to have some sort of say in the process,” he continued. That could mean giving participants the power to vote on proposals to reform a plan, or perhaps placing a representative for retirees on the boards of some plans as a non-voting trustee. “Something will be in the bill that does this, because the Democrats have to have it, [but]I’m not sure what it will look like,” Heinz said, adding, “Republicans also don’t think it’s a bad idea, either.”

Turning to the Senate, where Democrats are in control, Heinz said that Sen. Tom Harkin (D-Iowa) – Chair of the Labor and Pensions Committee – has “reluctantly come along” on the pension reform issue. “He understands that this is a serious problem that has to get fixed.” Heinz praised Sen. Sherrod Brown (D-Ohio), chair of the Senate pensions subcommittee. “He has really played the role of adult in this process with all of the other senators,” convincing them that the pension problem needs to be taken care of immediately, Heinz said.

Still, multiemployer pension reform faces significant opposition from several fronts, including the American Association of Retired Persons (AARP). “Basically, their position is that there should be a government bailout,” Heinz said. The Teamsters are also foursquare against the Solutions Not Bailouts proposal championed by the National Coordinating Committee for Multiemployer Plans (NCCMP). “We are working very hard to try and get them to change their position, considering how important [reform] should be to them. If you talk to rank-and-file Teamster membership, they pretty much support what we’re doing, because they see just how bad this is.

“One of the things I don’t think their leadership understands,” Heinz added, “is that no one wants to be the last man standing. But the last man standing is not going to be a contractor or a company – it’s going to be the union. They have the same unfunded liability problem that contractors have. They will go bankrupt. And I don’t think that’s gotten across to their national leadership yet.”

Heinz has been working closely with Randy DeFrehn of the NCCMP to push pension reform across the goal line. Read DeFrehn’s most recent op-ed here.

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