December 13, 2005

To Members of the U.S. House of Representatives

Dear Representative:

On behalf of the 1.4 million members of the United Food and Commercial Workers International Union (UFCW), I am writing to urge your support for the inclusion of proposals to strengthen multiemployer defined benefit pension plans in the final pension reform legislation. 

UFCW is also a member of the Multiemployer Pension Plan Coalition, which consists of a broad group of employers, employer associations, unions, and multiemployer plans who are unified in their support of funding reforms that would reform multiemployer plan funding rules while protecting the Pension Benefit Guaranty Corporation (PBGC), and the pensions of millions of Americans.  In fact, UFCW multiemployer pension plans alone cover approximately 1.2 million participants, including former members who are receiving benefits or are entitled to future benefits.  I appreciate the commitment that the U.S. Congress has made to reform the private retirement system, of which multiemployer plans are such an important part.  The multiemployer plan reforms that are included in the pension reform legislation approved by the Committee on Education and the Workforce and the Committee on Ways and Means (H.R. 2830, the Pension Protection Act of 2005) are a good first step toward addressing the concerns we have regarding the future of multiemployer plans.                

There are certain issues, however, which are of concern to our members.  In particular, I am requesting that the following issues be addressed as pension reform legislation is considered by the House:

• The trustees and parties of a multiemployer plan in critical status must be provided with the necessary tools to correct the plan’s financial situation.  Specifically, the legislation must include authority for critical status plans to protect normal retirement benefits at normal retirement age by permitting the reduction of certain ancillary, non-core benefits and requiring employer surcharges;
  
  
• Contributing employers to a multiemployer plan in critical status that has adopted and is complying with a rehabilitation plan must be protected from potentially devastating, extra-contractual contribution requirements and excise taxes that could trigger bankruptcies and, eventually, plan failures, the transfer of liabilities to the PBGC, drastic reductions in participant benefits, and the dire economic consequences of these actions; and
  
  
• Grandfathering protection should be provided with respect to amortization extensions in effect prior to the date of enactment and to preserve agreements to restore benefit cuts made by plans that took these unpopular yet responsible actions in conjunction with contribution increases prior to enactment to address the funding crisis.

The enactment of multiemployer reform legislation that resolves these issues is critical to enabling multiemployer plans to address these problems without resorting to a government bailout or adding to the PBGC's liability.  It is essential that these issues be considered when this legislation is brought to the floor for full consideration by the U.S. House of Representatives at its earliest convenience if this reform effort is to be considered successful.

Thank you for your consideration of this important matter and I look forward to working with you to secure and strengthen multiemployer pension plans.

Joseph T. Hansen
International President