following criteria: (A) The multiemployer pension plan is in critical and declining terminated as of the date of enactment of Butch Lewis. participating employers, unions, participants or retirees. current value of plan assets and the denominator of which is efforts aimed at addressing the multiemployer pension plan crisis, need only majority approval in the Senate. 1319) by a (near) party-line vote of 219-212 (Reps. Jared Golden (D-ME) and Kurt Schrader (D-OR) were the only two Democrats to vote no, and no Republicans supported the measure). 2. The Butch Lewis Act … The Butch Lewis Emergency Pension Plan Relief Act of 2021 was introduced in February 2021 and is now moving forward through Congress for consideration as part of the upcoming COVID-19 relief package. This Act will fix ALL failing multiemployer pension plans (MEPS). This bill establishes the Pension Rehabilitation Administration within the Department of the Treasury and a related trust fund to make loans to certain multiemployer defined benefit pension plans. years from the effective date of when a plan receives special This will leave most troubled plans subject to the MPRA suspension process. employers, or any reduction in participating employee benefits. The PBGC also is authorized to impose by regulation Butch Lewis Emergency Pension Plan Relief Act Has Passed the Senate . Congressman Donald Norcross, a leader on retirement security in Congress, cheered the bipartisan House passage of H.R. © Mondaq® Ltd 1994 - 2021. 9701. must apply no later than December 31, 2025, with revised Rehabilitation for Multiemployer Pensions Act (HR 397), Rehabilitation for Multiemployer Pensions Act, Proposed Multiemployer Pension Recapitalization and Reform Plan, How to Support Workforce Mental Health During the COVID-19 Pandemic, The State of Defined Contribution Retirement Plans in 2021, Employee Benefits and COVID-19: Changing the Future of Benefits Today, Meeting the Benefit Needs of Your LGBTQ+ Plan Members, What Employers Need to Know About COVID-19 Vaccines and Return to Work, CEBS (Certified Employee Benefit Specialist). Notably, any multiemployer The Butch Lewis Emergency Pension Plan Relief Act of 2021, which is included in the bill, would create a special financial assistance program under which cash payments would be made by the Pension Benefit Guaranty Corporation (PBGC) to financially troubled multiemployer pension plans so they could continue paying retirees’ benefits. The Senate Parliamentarian is those monies. pain among the stakeholders, or to provide any mechanism for the Gone are attempts to share any economic conditions on plans receiving special financial assistance relating next 30 years, provided investment performance over that period is HR 397 would create a new agency called the Pension Rehabilitation Administration within the Department of the Treasury and a related trust fund to make loans to multiemployer defined benefit pension plans that are either in critical and declining status (including any plan that the Treasury approved for suspension of benefits) or insolvent, if the plan became insolvent after December 16, 2014 and has not been terminated. plan year ending in 2051, and it also must reinstate any previously the amount of benefits previously suspended (either as a lump sum The Pension Accountability Act . all accrued benefits, without reduction, due from the date of There is currently no provision for a tax on participating His first attempt—a standalone 30-year government loan program known as the Butch Lewis Act—passed the House in July 2019. Plans that had been approved for a suspension of benefits under the Multiemployer Pension Reform Act of 2014 (MPRA) before HR 397 becomes enacted would be required to apply for a loan. would not otherwise change how withdrawal liability is calculated, The Democrats in the 117th Congress are pressing the Butch Lewis Emergency Pension Plan Relief Act of 2021 in two phases. Jenny Lucey, CEBSJuly 26, 2019Defined Benefit (DB) Plans, Employee Benefits, MPRA, Multiemployer, Pensions, RetirementButch Lewis Act, Rehabilitation for Multiemployer Pensions Act (HR 397). On the same day, PBGC Director Gordon Hartogensis issued a statement calling for Congress to enact a bipartisan, long-term solution on the multiemployer pension system. pension reform legislation. The payment to the remain part of what is to be a budget reconciliation bill that will Butch Lewis Act of 2019. For the $39.7 billion in loans disbursed to plans that would not be required to apply, CBO estimates that the present value of the repayments would total $7.9 billion (discounted to 2020, the year of disbursement), resulting in a net subsidy cost of $31.8 billion. On Saturday, the COVID Relief package passed in the Senate chamber, inclusive of the Butch Lewis Emergency Pension Plan Relief Act provision. Sign Up for our free News Alerts - All the latest articles on your chosen topics condensed into a free bi-weekly email. ‘No Harm, No Foul,' Says The Seventh Circuit In An FMLA Interference Case, CDC Revises Quarantine Guidance For Those Who Have Been Vaccinated, Or Who Have Recovered From A COVID-19 Infection, EEOC Releases Much-Anticipated Proposed ADA And GINA Wellness Rules. Earlier this year I updated you on some things I was watching regarding multiemployer pension reform, and since there has been some recent action on the Butch Lewis Act I thought it was time for an update. McLane Middleton, Professional Association. Specialist advice should be sought Labour and Employment Comparative Guide for the jurisdiction of India, check out our comparative guides section to compare across multiple countries. insolvent or are likely to be insolvent within 5 years. That decision should 5 SEC. for all accrued benefits owed to retirees, without reduction, pension relief that would provide underfunded multiemployer pension “Such a ‘pay-as-you-go’ approach will necessarily be costlier and messier than the solutions in the Butch Lewis Act,” Kamp said. The Rehabilitation for Multiemployer Pensions Act (HR 397), also known as the Butch Lewis Act, was introduced January 9, 2019 and passed the House on July 24, 2019. seriously underfunded multiemployer pension plans for the next 30 the latest COVID-19 relief bill) may include multiemployer investment-grade bonds or other investments as permitted by the assistance and any earnings on such assistance must be segregated assistance shall be deemed to be in critical status until the last WASHINGTON, DC – Today, U.S. For more details, see the Congressional Research Service summary on HR 397, updated July 19, 2019. PBGC. guide to the subject matter. It also contains long-expected proposals for single-employer defined benefit (DB) plan funding relief. Earlier this year I updated you on some things I was watching regarding multiemployer pension reform, and since there has been some recent action on the Butch Lewis Act I thought it was time for an update.Here’s what you need to know. Also on July 24, 2019 a companion bill (S 2254) was introduced in the Senate, where it is more likely to face an uphill battle for passage. In unveiling language included in the Butch Lewis Emergency Pension Plan Relief Act of 2021, the House panel took the first step towards ensuring that millions of retirees and active workers who have played by the rules will receive the pension benefits they earned through years of hard work. This bill establishes the Pension Rehabilitation Administration within the Department of the Treasury and a related trust fund to make loans to certain multiemployer defined benefit pension plans. The much-heralded Butch Lewis Emergency Pension Plan Relief Act of 2021 is part of the COVID-19 relief bill, which is set for a vote in the House. "Could The Butch Lewis Act Solve The Multiemployer Solvency Crisis? " You’ll only need to do it once, and readership information is just for authors and is never sold to third parties. 397, 116th Congress), eligible plans would include: plans in critical and declining status, plans with significant underfunding with more retirees than active workers, plans that have suspended benefits, and certain plans that have already become insolvent. Our reason for petitioning you is simple. including earlier versions of the Butch Lewis Act of 2019, the EPPRA would also allow plans to become eligible for the special partition program through 2024. mismanaging the monies they receive. 397, the Rehabilitation for Multiemployer Pensions Act aka The Butch Lewis Act, the Teamsters Department of Political and Legislation Action released the following information: "The House Ways & Means Committee Chairman Richard Neal (MA-1) has formally noticed the mark-up of the Rehabilitation for Multiemployer Pensions Act (HR 397) for Wednesday, July 10… A new bill in Congress, the Butch Lewis Act, would require taxpayers to stand behind private union pension plans’ broken promises. assumptions. CBO estimates that 157 multiemployer pension plans would be eligible to apply for loans under the criteria set forth in HR 397. multiemployer pension plan would be a single, lump-sum payment. We need both Republican and Democratic support for a yes vote to enact the “Butch Lewis Act of 2017” S 2147 and HR 4444. pension plans should have sufficient funds to pay benefits for the of expenses to, other benefit plans; and withdrawal liability. Over 1,200 multiemployer pension plans are in healthy funding status. Butch Lewis Act of 2019. Norcross on House-Passed ‘Butch Lewis Act’ that Helps Retirees by Addressing the Multiemployer Pensions Crisis . about your specific circumstances. “The bill is proposing a $64 billion loan package to be spent over 10 years. For more details, see Update on the Butch Lewis Act and the Congressional Research Service summary on HR 397 updated July 19, 2019. Reform Act of 2014 ("MPRA"); (C) The multiemployer pension plan is certified by the plan after December 31, 2030, with indexing for inflation tied to the after December 16, 2014, as defined under Internal Revenue Code CBO estimates that loans disbursed in 2020 would total $43.3 billion, and $3.6 billion of that amount would be for plans required to apply for loans. Free, unlimited access to more than half a million articles (one-article limit removed) from the diverse perspectives of 5,000 leading law, accountancy and advisory firms, Articles tailored to your interests and optional alerts about important changes, Receive priority invitations to relevant webinars and events. to decide whether Butch Lewis has the necessary budget impact to “Such a ‘pay-as-you-go’ approach will necessarily be costlier and messier than the solutions in the Butch Lewis Act,” Kamp said. The Butch Lewis Emergency Pension Plan Relief Act was approved Feb. 27 as part of the mammoth American Rescue Plan Act of 2021 (H.R. multiemployer plan eligible for "special financial The bill includes provisions from the previously introduced Butch Lewis Act and other provisions designed to address the worsening multiemployer pension crisis. Unfortunately, lobbying groups such as the NCCMP are proposing … actuary to be in critical status in any plan year beginning in 2020 Here’s what you need to know. participating employers and participants if Butch Lewis is passed. MPRA. TEMPORARY DELAY OF DESIGNATION OF MULTI-6 EMPLOYER PLANS AS IN ENDANGERED, CRIT-7 ICAL, OR CRITICAL AND DECLINING STATUS. Instead, if it remains in the American Note: The Butch Lewis Act of 2021 strives to address the plight of multiemployer and single-employer pension plans in the wake of COVID-19. The financial assistance will not see any reduction in “The bill is proposing a $64 billion loan package to be spent over 10 years. the 20-year cap on payments, or the mass withdrawal liability 397, the Rehabilitation for Multiemployer Pensions Act. suspended benefits under the MPRA, and provide payments equal to This bill establishes the Pension Rehabilitation Administration within the Department of the Treasury and a related trust fund to make loans to certain multiemployer defined benefit pension plans. In short, eligible multiemployer To print this article, all you need is to be registered or login on Mondaq.com. Stay tuned. status in any plan year beginning in 2020 through 2022; (B) The multiemployer pension plan suspended benefits in In short, Butch Lewis as currently drafted basically would rules. Butch Lewis Act of 2017. Section 418E, and has remained so insolvent and has not been result in the federal government picking up the tab for certain assistance" that is not subject to any financial the plan year ending in 2051. repayment obligations, provided it meets one of the as the percentage equal to a fraction, the numerator of which is The Seventh Circuit Court of Appeals recently affirmed summary judgment on behalf of an employer that was sued in an interference claim under the Family and Medical Leave Act (FMLA). it could be a huge relief for such underfunded plans and their come very soon. current liabilities) of less than 40%, and has a ratio of active to pensions plans eligible for this relief would not have to repay improvements; allocation of plan assets; reductions in employer Background: The proposed Butch Lewis Act has been severely narrowed so that the proposed loan assistance program will be available to only a handful of multiemployer plans. beginning in 2021) to $52 per participant for plan years beginning Embedded in the $1.9 trillion "American Rescue Plan" Here … Butch Lewis is a continuation of various prior legislative efforts aimed at addressing the multiemployer pension plan crisis, including earlier versions of the Butch Lewis Act of 2019, the Emergency Pension Plan Relief Act of 2020, and other pending pension reform legislation. 3 This subtitle may be cited as the ‘‘Butch Lewis 4 Emergency Pension Plan Relief Act of 2021’’. special financial assistance. Mondaq uses cookies on this website. Treasury must issue bonds to fund the loan program and transfer amounts equal to the proceeds to the trust fund established by this bill. its withdrawal liability assessment due to the special financial The Butch Lewis Act of 2021 strives to address the plight of multiemployer and single-employer pension plans in the wake of COVD-19. By using our website you agree to our use of cookies as set out in our Privacy Policy. line with projected investment returns and other actuarial contribution rates; diversion of contributions to, and allocation Seyfarth Synopsis: If the Senate years, without imposing any costs directly on such plans or their The special financial through 2022, has a "modified funded percentage" (defined The Pension Accountability Act (S 833) was introduced on March 14, 2019. through the plan year ending in 2051. rates for multiemployer plans from the currently indexed annual per Just like the bipartisan Butch Lewis Act (H.R. The International Foundation will continue to follow legislative and regulatory updates for multiemployer pension plans. entitled the "Butch Lewis Emergency Pension Plan Relief Act of proposed law does provide, however, for an increase in premium POPULAR ARTICLES ON: Employment and HR from United States. 2021" ("Butch Lewis"). allows the PBGC to limit applications during the first 2 years participant rate (which is $31 per participant for plan years come directly from the Treasury Department. Withdrawal liability will be calculated without taking Multiemployer pension plans seeking special financial assistance The amount of financial assistance provided to eligible When building a workplace well-being program, communications can be just as critical as the resources offered. The Pension Rehabilitation Administration may use the funds, without a further appropriation, to make loans, to pay principal and interest on the bonds, or for administrative and operating expenses. The Centers for Disease Control has issued new guidance regarding quarantine requirements for individuals who have been vaccinated, and for those who have recovered from a COVID-19 infection. multiemployer pension plans. We need this to enable us to match you with other users from the same organisation, it is also part of the information that we share to our content providers ("Contributors") who contribute Content for free for your use. applications submitted no later than December 31, 2026. Emergency Pension Plan Relief Act of 2020, and other pending be eligible to apply for a new suspension of benefits under the plans with sufficient monies from the Treasury Department to pay The content of this article is intended to provide a general As currently drafted, Butch Lewis following enactment to certain plans, such as those that are including application of the withdrawal liability payment schedule, This is NOT A BAILOUT, WON’T TOUCH TAXPAYERS and WON’T ADD TO NATIONAL DEBT. The ADA generally prohibits an employer from making disability-related inquiries or requiring medical examinations with respect to employees. Parliamentarian blesses it, the $1.9 trillion American Rescue Plan year beginning 15 calendar years after the effective date of the The first phase, the American Rescue Plan of 2021, is moving through the reconciliation process in the House and Senate (not subject to filibuster in the Senate). Of those 157 plans, CBO estimates that eight would be ineligible for loans, 19 would receive loans but not grants, and 130 would receive loans and grants. As such, Your source for the latest employee benefits news. or in equal monthly installments). November 26, 2019 Update: Proposed Multiemployer Pension Recapitalization and Reform Plan, Jenny Lucey, CEBSManager, Reference/Research Services at the International Foundation. That process is riddled with procedural unfairness and should be improved. 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