Our industry’s legislative agenda is packed with critical legislation and regulations that will affect your company’s future. The 2020 National Issues Conference provides updates on these issues and a chance to share your concerns about them with your House and Senate representatives. Join us from May 5 – 7, 2020 in Washington, D.C. Your participation is essential to gaining credible outcomes for our industry!
A new study on Illinois apprenticeship programs shows that apprenticeships are the bachelor’s degrees of the construction industry. Joint labor-management programs, in particular, provide a more effective and inclusive offering than unilateral (open shop) programs in key areas such as training hours, graduation rates, and competitive earnings that rival the performance of Illinois’ four-year universities.
The study, titled The Apprenticeship Alternative Enrollment, Completion Rates, and Earnings in Registered Apprenticeship Programs in Illinois, provides 5 key takeaways from analyzing 17 years of apprenticeship data in Illinois:
1) Joint labor-management programs enrolled 97% of all construction apprentices in Illinois.
2) Joint construction programs require 27% more hours of training (7,306 hours) than the minimum requirements to earn a bachelor’s degree from the University of Illinois (5,760 hours).
3) Joint construction programs have a completion rate of 54%, on par with Illinois’ public universities (61%), higher than for-profit institutions (43%), and significantly higher than employer-only programs (31%). The ABC completion rate in Illinois is a dismal 16%.
4) The racial diversity of graduates from joint construction programs is similar to Illinois’ public universities, and joint construction programs are both more diverse and have higher completion rates among people of color, women, and veterans than employer-only programs.
5) Despite a higher likelihood of suffering an unemployment spell, a union journeyworker earns about as much over a career ($2.4 million) as a worker with a bachelor’s degree ($2.5 million after student debt).
The Mineworkers national pension and health plans were provided badly need Federal fiscal support in the year-end spending measure allowing use of the abandoned mine reclamation funds to shore up both the Mineworker national pension and health funds. This long-overdue measure will help save national mineworker pension benefits and will take the fiscal pressure of looming insolvency of that plan off the Pension Benefit Guaranty Corporation’s (PBGC) potential liability books. This measure also provides a path forward for Federal support for broader multiemployer pension reform – an essential prerequisite for effective reforms to remedy the 140 or so critical and declining plans without irredeemably crippling the vast majority of otherwise healthy plans by transferring the fiscal liability for the remedy to healthy plans.
Also, health plans got some good news with the long-awaited repeal of the Cadillac tax on health plans and the 2021 repeal of the health insurer tax that was levied on our fully insured health plans.
MCAA, in conjunction with the UA and Horizon Actuarial Services, has produced the UA/MCAA Analysis of the Cost Impact of the Grassley/Alexander [Pension Reform] Proposal. This latest joint UA/MCAA analysis is being used in lobbying meetings on the Hill to prod Congress to craft a more acceptable multiemployer reform proposal that focuses on remedies for critical and declining plans without levying crippling fiscal and funding restrictions on otherwise healthy plans. MCAA and the overall NCCMP Coalition are working hard to prod Congress to come up with a more fair and balanced reform that does no harm to healthy plans early in the next session of Congress. Initial indications are that the reforms will be moderated significantly.
The latest UA/MCAA analysis is added to the Multiemployer Pension Plan Reform Policy Issues analysis that Horizon did for the UA and MCAA earlier this year. That analysis shows the impact of reduced benefits and increased costs added to plans in the wake of Congress’s delay in enacting reforms.
In a November 26, 2019 letter to Congressman Scott Peters (D-CA-52), MCAA Government Affairs Committee Chair Jim Gaffney voiced MCAA’s support for the Stop Unfair Bid Shopping Act of 2019 (SUBS Act, HR 5247). The letter commends the Congressman for introducing the latest version of the good-government reform to the direct Federal construction contract low-bid, price-only selection procedures.
The SUBS Act would require prime contractors on awards of $1.5 million or more to list major first-tier subcontractors of $100,000 or more. Post-award substitutions of listed subcontractors that amount to deductions of 10% or more would result in a deductive change to the prime contract for amounts above the substitution threshold.
This is the latest version of the perennial sub bid listing measure that once passed the Congress and suffered a Presidential veto many decades ago. It also prevailed in agency procurement from 1963 to 1983 but was rescinded at that point based on outdated procurement practices.
Congressman Peters’ SUBS Act has been referred to the House Oversight and Government Reform Committee, which is now chaired by New York Congresswoman Carolyn Maloney (D-NY-12), who has been a sponsor of subcontractor bid listing for several Congresses.
MCAA will continue to monitor the act’s progress and will keep you updated.
Senate Finance Committee Chairman Chuck Grassley (R-IA) and Senate Health, Education, Labor and Pensions Committee Chairman Lamar Alexander (R-TN) released their comprehensive multiemployer pension reform proposal on November 20, 2019. Summarized in a white paper and technical explanation entitled “Multiemployer Pension Recapitalization and Reform Plan” (MPRRP). The proposal is a comprehensive and complicated re-write of the multiemployer plan rules as compared with current law and reflects a yeoman’s job of Congressional staff over recent years working diligently to get this latest reform done right from their perspectives. Still, that ultimate judgment in the near term will depend on intense negotiations among the various stakeholders on a final proposal that may be okayed by Congressional leadership for enactment on the year-end spending measure in late December – if equitable compromises on both sides of the aisle can be reached on the crucial principal issues.
1) Plans eligible for PBGC partition – Significantly increased PBGC premium levies on all plans, combined perhaps with some as-yet-to-be-defined amount of government appropriations support, will be dedicated to finance and administer a robust PBGC partition program, to pay some of the benefits of “orphans” (participants whose employers no longer contribute to the plans) in qualifying critical and declining plans that meet specific criteria, along with three qualifying named exceptional plans: Teamsters Central States, Road Carrier Local 707, and the United Mineworkers National plan. As proposed, partition payments from PBGC are greater for Central States and Road Local 707 as compared with other eligible partitioned plans. The PBGC maximum payment guaranty would be increased from $12,870 per year, to approximately $20,000 annually.
2) PBGC premium increases – The PBGC premium increases proposed are comprised of the following elements:
3) Funding rules – mandated assumed discount rate valuation of liabilities – The proposal requires that the assumed discount rate used by actuaries to project plan liabilities be limited to the lesser of either 6% or the 24-month average third-segment of the 25-year corporate bond yield curve, plus 2%. Experts comment that in most instances the lesser rate will be 6%. This rate is to be phased in over five years, beginning in Plan Year 2020. Changes in plans’ funding status due solely to the decreased interest rate assumption may amortized over 30 years.
4) Changes to withdrawal liability rules – The construction industry basic withdrawal liability rules and exemption remain intact. However, the methods for measuring maximum annual payments for any liability incurred are changed materially. The 10-year look back for maximum annual payment calculation is extend to 20 years, and the period of payment of liability is gauged by plan funding status. Plans are required to provide withdrawal liability estimates to all contributing employers free of charge every three years.
There are a myriad of other significant changes in the MPRRP proposal, including zone status rule changes. MCAA is analyzing the changes in conjunction with our consultants at Horizon Actuarial Services and Groom Law Group, along with our stakeholder partners at the UA.
Other stakeholder coalitions, including the NCCMP and the Construction Employers of America (CEA), are engaged in similar in-depth assessments and analysis in preparation for the key negotiation period between now and Congressional recess in late December.
All recognize that successful reforms this year are key, as a general election year is usually not conducive to delicate bipartisan compromises on crucial national issues. However, it also is widely recognized that significant equitable compromises in the initial proposal are essential to avoid further destabilizing the entire multiemployer system to provide partition for only a relatively small yet very significant subset of the whole.
MCAA’s leadership is taking this very important matter under advisement and will keep you apprised of developments along the way to whatever resolution may be achieved by the end of the year.
The National Service and Maintenance Agreement continues to be an excellent tool used by HVACR and plumbing service contractors around the country to grow market share and remain competitive in this highly competitive market. The current National Agreement is effective through July 31, 2020. The MSCA Labor Committee will be discussing potential changes or modifications with the UA later this year. Although we anticipate very few changes, we would appreciate your input or recommendations on terms and conditions which you feel may be helpful in expanding your service business. Please send all comments to bdolim@mcaa.org by December 6, 2019.
For 15 years running, ARCA/MCA’s Board has unanimously contributed to MCAA’s Political Action Committee. This ongoing commitment, and commitments from several other MCA local affiliate Boards and other groups across the country, ensure that MCAA’s Government Affairs Committee has sufficient resources to advance key MCAA member interests on Capitol Hill.
In August 2016, Mark McManus was unanimously elected as General President at the UA’s 39th General Convention and on November 10, 2016, he assumed his new position leading the nation’s most progressive and influential trade union. Mark McManus has had a distinguished career in support of our nation’s hard-working men and women and has been unwavering in his commitment to a strong and mutually beneficial partnership between labor and management. See everything we have planned for MCAA2020 on our convention website.
Over 1,400 United Association and MCAA representatives gathered this week for the 2019 UA-MCAA Labor Relations Conference: Succeeding Together to openly discuss key issues affecting the future of both memberships, including assignment of trade jurisdiction, utilization of apprentices, the impact of benefit packages on contractors’ competitiveness, the importance of growing the service industry and the need for greater diversity in the field and office. In his opening remarks General President McManus established the tone for the conference when he stated three prerequisites to a meaningful and lasting labor/management partnership: Open and Continuous Communication; No Surprises; and Trust.
The 2019 UA-MCAA Labor Relations Conference: Succeeding Together will convene October 29 – 30, 2019, at The Mirage in Las Vegas, Nevada. The conference, jointly hosted by the United Association (UA) and MCAA, will feature panel discussions focused on topics such as growing apprenticeships, expansion of service, and attracting tomorrow’s diverse workforce.
From discussions on apprenticeship best practices, diversity, and service to an MCAA-sponsored session that lets apprentices understand the management side of the business, the 2019 UA-MCAA Labor Relations Conference: Succeeding Together will enhance your understanding of both UA and MCAA viewpoints. With mutual understanding, we can work toward continued work for UA members and profitable jobs for MCAA contractors, and that’s a win for everyone!
From discussions on apprenticeship best practices, diversity, and service to an MCAA-sponsored session that lets apprentices understand the management side of the business, the 2019 UA-MCAA Labor Relations Conference: Succeeding Together will enhance your understanding of both UA and MCAA viewpoints. With mutual understanding, we can work toward continued work for UA members and profitable jobs for MCAA contractors, and that’s a win for everyone!
MCAA, the United Association of Plumbers and Pipefitters (UA), and Horizon Actuarial Services have released a new report, Multiemployer Pension Plan Reform Policy Issues (June 2019). The report analyzes how the impact of the lingering pension reform impasse in Congress adversely affects active participants in MCAA/UA pension plans and highlights inequities in benefit levels.
“Active participants face higher contributions and lower benefit levels as funding challenges mount and are left unaddressed by Congress,” the report and analysis conclude.
MCAA President Brian Helm and UA General President Mark McManus stressed in a joint letter on the report, “Congressional reforms must include judicious consideration and equitable balancing of the burden of reform on all stakeholders in the system, including current active participants, vested/inactives, retirees and their beneficiaries, and contributing employers so as to bolster the sustainability of the system going forward.”
The joint UA/MCAA letter accompanying the report calls for Congressional action this year, with McManus and Helm citing UA and MCAA full support for the Common Sense Principles for Multiemployer Reform issued by the National Coordinating Committee for Multiemployer Plans (NCCMP) and a broad coalition of employer and labor groups across the country.
The report analyzes pension and benefit levels for a sample of representative active participants in plans who began their careers in the 1970s, 1980s, 1990s, 2000s, and 2010s and “reveals that current active participants are contributing more and receiving lower benefits as compared with their predecessors.” The analysis concludes that, “Policy makers should be mindful of these inequities when considering potential changes to the funding rules and should make every effort to minimize the burden placed on the current generation of plan participants.”
MCAA is releasing the report in a meeting with the new Director of the Pension Benefit Guaranty Corporation (PBGC), Gordon Hartogensis, on June 26, 2019, at the PBGC offices.
After that, MCAA and the UA will be distributing the report to Congressional Committees with jurisdiction over pension reform in anticipation of an upcoming hearing on the issue before the House Ways and Means Committee shortly after the Fourth of July Congressional recess.
Contact John McNerney (MCAA) at 301-869-5800 or Ben Ablin, ASA, EA (Horizon Actuarial Services), the principal author of the report and analysis, at 240-247-4542 for additional information or assistance with any questions.
Join your UA and MCAA colleagues for education geared toward making the labor-management relationship a win-win for all parties. The 2019 UA-MCAA Labor Relations Conference: Succeeding Together will take place October 29 – 30, 2019, at The Mirage in Las Vegas, Nevada. This conference provides the unique opportunity to see both sides of the coin as labor and management collaborate on sessions and panel discussions to give attendees an in-depth look at what makes our relationship so important. Registration is now open!
The conference, jointly hosted by the United Association (UA) and MCAA, will feature panel discussions focused on topics such as growing apprenticeships, developing a joint labor-management strategic planning committee and retention of workers.
Acknowledging the importance of engaging the future of our organizations, the UA is asking all locals to bring one apprentice to the conference this year. MCAA will be hosting a breakout session with these apprentices to give them an opportunity to really dig into and ask questions about the management of the business with MCAA leaders one-on-one. Because apprentices are not only the future of the UA, they are the future of the MCAA as well.
To maximize our time together, MCAA is asking its members to plan joint dinners with their local labor partners following Tuesday’s reception. Exchanging ideas and experiences is how we will continue to thrive in this industry we all love, it is how we will be Succeeding Together.
The 2019 UA-MCAA Labor Relations Conference: Succeeding Together is scheduled to take place October 29 – 30, 2019, at The Mirage in Las Vegas, Nevada and registration is now open!
The conference, jointly hosted by the United Association (UA) and MCAA, will feature panel discussions focused on topics such as growing apprenticeships, developing a joint labor-management strategic planning committee and retention of workers.
Acknowledging the importance of engaging the future of our organizations, the UA is asking all locals to bring one apprentice to the conference this year. MCAA will be hosting a breakout session with these apprentices to give them an opportunity to really dig into and ask questions about the management of the business with MCAA leaders one-on-one. Because apprentices are not only the future of the UA, they are the future of the MCAA as well.
To maximize our time together, MCAA is asking its members to plan joint dinners with their local labor partners following Tuesday’s reception. Exchanging ideas and experiences is how we will continue to thrive in this industry we all love, it is how we will be Succeeding Together.
Members of the MCA of Connecticut’s Board recently continued the long-standing tradition of Board support for the MCAA PAC. They join a long list of supporters who have provided funds to ensure that the MCAA PAC can continue its efforts to gain our members and our industry a fair hearing in federal public policy decisions.
Those supporting the MCAA PAC from January 1, 2018 – November 30, 2018 were:
MCAA PAC appreciates your support.
ARCA/MCA Executive Vice President Dick Sawhill and the ARCA/MCA Board made substantial contributions to the MCAA Political Action Committee again this year. This ongoing commitment, along with commitments from several other MCA local affiliate Boards and other groups across the country, ensure that MCAA’s Government Affairs Committee has sufficient resources to deploy on a non-partisan basis to advance key MCAA member interests on Capitol Hill.
MCAA and the UA have partnered with the Society of American Military Engineers (SAME) in a new alliance focused on building our national security by contributing to America’s infrastructure development. The groups will collaborate on workforce development, educating influencers and decision makers, and education and training.
In response to a request from the MCAA Board of Directors following discussion of the stalled legislative proposal allowing new Composite Plan options, Horizon Actuarial Services provided an in-depth analysis of Alternative Retirement Plan Designs. The report, authored by actuaries Cary Franklin and Jonathan Feldman, offers a general risk-factor analysis for plan trustees to consider in any more in-depth analysis of particular plan circumstances and plan design options. It focuses on six areas: 1) traditional defined benefit (DB) plans; 2) variable DB plans; 3) cash balance plans; 4) money purchase plans; 5) profit sharing plans; and, 6) proposed new composite plans (not yet enacted into law). Cary Franklin will be making a presentation on this analysis at the National Issues Conference.
![Analysis of Grassley/Alexander [Pension Reform] Proposal Impacts Now Available](https://www.mcaa.org/wp-content/uploads/2016/06/Capitol-Sky.png)
