A potential bill hitting the United States House floor as early as next week could cripple Pension Plan 2 and NEBF. It is imperative that you contact your Representatives and voice your opposition to the JOINT SELECT COMMITTEE MULTI EMPLOYER PROPOSAL. Below are bullet points that reveal the potential damage. Click on the attached PDF for the contact info for your Representatives. I strongly encourage everyone to speak up against this catastrophic bill.
Business Manager/ Financial Secretary
The following are certain results if this Bill is passed:
• It would Cap Earnings Assumption at long-term corporate bond rate +2%. Currently, it is approximately 6% - 6.5%. Most plans use a 7% – 7.5% return assumption that has proved reasonable over the long term. This would make it much more difficult to maintain current benefit levels.
• It Would automatically make permanent cuts to “adjustable benefits” if a plan triggers red status.
• Without asset smoothing and with the new limitations on credit balances, it will be very easy to trigger red status in a down investment year, thus making the likelihood of the mandatory red zone cuts likely, even for the most healthy plans.
• It Imposes new taxes directly on union members that have to be paid from union dues.
• It Imposes new taxes on retirees.
• It Drastically increases PBGC premiums from the current rate of $29/participant to up to $150/participant. For just Plan 2, this could cost $1.5 Million per year.