Pension Reform, Energy Management Headline QCA Conference
Quality Construction Alliance Event Draws Hundreds to Capitol
Members from the five organizations forming the Quality Construction Alliance (QCA) recently convened in Washington, D.C., to discuss multiemployer pension reform, immigration, energy efficiency, and other pertinent legislative issues at the QCA’s National Issues Conference.
Over two days, attendees participated in panel discussions, attended presentations, and visited roughly 125 different congressional offices to advocate for their respective organizations and industry.
Energy Efficiency Takes Center Stage
One of the biggest legislative issues for members of the five organizations comprising the QCA — which includes the Finishing Contractors Association (FCA), the International Council of Employers of Bricklayers and Allied Craftworkers (ICE), the Mechanical Contractors Association of America (MCAA), the Sheet Metal and Air Conditioning Contractors’ National Association (SMACNA), and The Association of Union Constructors (TAUC) — proved to be energy-efficiency legislation.
During the conference, participants discussed their support for the Shaheen-Portman bill, also known as the Energy Savings and Industrial Competitiveness Act of 2013 (ESIC), which recently passed the U.S. Senate Energy and Natural Resources Committee; the HOMES Act, which provides federal rebates to homeowners who complete energy-efficiency upgrades; and the Federal Cost Reduction Act, which promotes energy efficiency in government buildings.
“Energy efficiency is one of the big issues that needs to be dealt with,” said Stan Kolbe Jr., director of governmental affairs for SMACNA.
Kolbe expressed dismay in the significant amount of energy being wasted by industrial and commercial buildings that do not utilize energy recovery systems, commended the ESIC Act for being a realistic step toward increasing energy efficiency in the U.S., and touted home-performance contracting as a realistic way to fund energy-saving retrofit projects.
“They’ll be benchmarking all these federal buildings, which I think is a plus,” Kolbe added. “It’ll get people moving.”
“We can all agree that using less is more, and energy efficiency is common sense,” said Jake Oster, deputy chief of staff for Rep. Peter Welch, D-Vt., while speaking to QCA members. Welch, along with Rep. David McKinley, R-W.Va., introduced the bipartisan ESIC Act to the House at the same time the bill’s original sponsors, Sen. Jeanne Shaheen, D-N.H., and Sen. Rob Portman, R-Ohio, reintroduced the bill in the Senate.
“It’ll move the ball forward on energy efficiency in Congress on some things we can all agree on,” Oster said. In addition to the ESIC Act, Oster said Welch soon plans to reintroduce the HOMES Act, which was first introduced in 2011. The legislation would provide rebates to homeowners who complete major energy-efficiency retrofit projects; rebate amounts would be based on the amount of energy saved.
“A federal rebate will help save energy, save on energy bills for homeowners, and help create jobs,” Oster said. “It’s what my boss would call a triple win.”
Immigration Reform and Employee Misclassification
While energy efficiency was a hot topic at the conference, the QCA also made its position clear on immigration reform, employee misclassification, and payroll fraud.
In its position paper, the QCA declared it “promotes immigration reform that supports lawful employers and solves the problem of undocumented workers,” and, “opposes an expanded guest-worker program for skilled trades and additionally supports strict controls in the program to avoid guest workers admitted for low-skilled classifications from migrating to construction.” The QCA also supports worker verification systems, including E-Verify, the government-run free system that helps employers verify potential employees’ work eligibility in the U.S.
“Immigration reform is an 800-pound gorilla,” said Rep. John Shimkus, R-Ill., before QCA members during a legislative session. “We need to at least bring the employees out of the shadows, get them legally here, and have them start paying all the taxes they should be paying. The pathway to citizenship is a problem.”
In addition to immigration reform, QCA discussed employee misclassification and the negative effects it has on both the employee and the industry.
M. Patricia Smith, solicitor of the U.S. Department of Labor, agreed that worker misclassification is a huge problem and discussed how her agency is working to resolve the issue, including partnering with agencies that have the power to enforce current labor laws.
“One of the things we did was work cooperatively with other federal and state agencies, and in 2011, we announced a memorandum of understanding with the IRS,” Smith said. “They have the big hammer — we’re small potatoes compared to them.”
While energy efficiency and immigration reform were deeply discussed, the leading hot-button issue for QCA members proved to be multiemployer pension reform.
The QCA supports the recommendations outlined in a recent report from the Retirement Security Review Commission (RSRC) of the National Coordinating Committee for Multiemployer Plans (NCCMP), “Solutions not Bailouts: A Comprehensive Plan from Business and Labor to Safeguard Multiemployer Retirement Security, Protect Taxpayers, and Spur Economic Growth.”
The 35-page report addresses the financial health of the country’s 1,500-plus multiemployer pension plans and provides private-sector solutions for the 5-10 percent of plans that are projected to become insolvent in coming years, rather than allowing them to run out of money and revert to the taxpayer-funded Pension Benefit Guaranty Corp. (PBGC) amount of just $11,000 per year.
The report recommends allowing trustees of the most deeply troubled plans to take “early corrective actions, including the partial suspension of accrued benefits for active and inactive vested participants, and the partial suspension of benefits in pay statutes for retirees,” though those benefits could not dip below 110 percent of PBGC amount.
The issue took center stage during the panel discussion, “A Conversation on Multiemployer Pension Reform,” which included a moderator and four industry experts.
“It is pro-business and pro-small business,” said Robert Hoover, vice president of Kvaerner North American Construction Inc., who delivered opening remarks before the panel discussion. “Pension reform is critical to my company and every other small, medium, and large company in the industry.”
Panelist Earl Pomeroy, senior counsel for Alston & Bird LLP, touted the recommendations in the report as being a private-sector solution that will prevent taxpayers from having to bear the burden of funding retirees’ benefits, if a plan should fail.
“Changes are needed,” said Pomeroy, a former North Dakota congressman. “The upshot of it all is that we’re going to rebalance risk. What we have today is not working and will not work for the future. … If there’s something that can be done that allows an earlier intervention, that allows preservation of those plans, we ought to look at that.”
But panelist Norman Stein, a law professor at Drexel University in Philadelphia, disagreed, saying there are other solutions besides proactively slashing retiree benefits. He suggested, among other things, increasing PBGC premiums so that when plans fail, beneficiaries have more than the minimum amount to fall back on. “If premiums were increased, we might be able to increase the guarantees,” Stein said. “Eleven-thousand dollars is not a whole lot to live off of, even with social security.”
But since certain provisions in the Pension Protection Act (PPA), which governs multiemployer pension funding practices, are set to expire at the end of 2014, Pomeroy argued the time to act is now. “This is the kind of thing that can stop this dead in its tracks in Congress,” he said. “Doing nothing is the worst thing to do when you have plans heading into the PBGC realm.”
Panelist Cary Franklin, actuary and managing consultant for Horizon Actuarial Services LLC, agreed with Pomeroy that taking action now could save some trustees from having to make even more difficult decisions — and more drastic cuts — in the future.
“What we’re looking at in some of these cases is bringing these benefit levels back to the appropriate levels, where they should have been, actually,” Franklin said. “The sooner you take action to correct these plans, the less painful the solution later on.”
For more information on the NCCMP’s plan, visit www.solutionsnotbailouts.com
Publication date: 6/17/2013