MCAA offers a capsule digest of some key public policy, legislative, and regulatory developments in Washington, D.C., that will influence the MCAA policy agenda in the near and intermediate terms.
Good News from the Pension Benefit Guaranty Corporation (PBGC)
With the infusion of some $85 billion or more for the PBGC Special Financial Assistance Program, slated to provide 30 years of pension benefit payment to some 250 eligible multiemployer plans covering upwards of 3 million participants and their families, the PBGC’s 2021 Annual Performance and Financial Report issued on November 15th, PBGC Director Peter Hartogensis proudly declares:
“Fiscal Year (FY) 2021 marks a significant milestone for PBGC’s Multiemployer Program with the enactment of the American Rescue Plan Act of 2021 (ARP). Prior to enactment of ARP, PBGC’s Multiemployer Program was expected to run out of money by 2026. ARP’s’ Special Financial Assistance (SFA) Program will significantly extend the solvency of the Multiemployer Program by at least thirty years. While future reforms would help improve the long-term health and resilience of the multiemployer system, ARP has provided a financial lifeline, and the effects of that are clear. [Emphasis added.]
“For the first time in almost twenty years, both PBGC’s Multiemployer Program and Single Employer Program have a positive net position at fiscal year-end The Multiemployer Program’s positive net position of $481 million at the end of FY 2021 is in sharp contrast to the negative net position of $63.7 billion at the end of FY 2020, a drastic improvement of $64.2 billion. PBGC’s Single-Employer Program remains financially healthy with a positive net position of $30.9 billion at the end of FY 2021, compared to $15.5 billion at the end of FY 2020, an improvement of $15.4 billion.”
The ARP cash infusion in to the PBGC SFA program has taken great pressure off PBGC and the multiemployer system as a whole, avoiding the broadly negative cascading effects of large plan defaults that were looming over the system for many years. Also, the sentence highlighted above with PBGC referring to even further future reforms – like Composite Plans long supported by MCAA, along with perhaps broadly expanded variable benefit plans – would bolster further the sustainability of the system overall for the mutual benefit of plan participants and beneficiaries and contributing employers. Those future reforms will now most likely be pushed into next year (maybe – as many view the PBGC SFA program as the last word on pension reform for some time) in Congress as the end of year legislating is compressed by a tight schedule and pressing funding and budget matters.
Other Good News in Pension Matters
The UA National Pension Fund annual funding notice issued October 19, 2021, for the Plan Year (PY) ending June 30, 2021, announced that for PY July 1, 2021, the fund is certified in “safe” status with a funding percentage of 87.3% . That Fund is no longer in “endangered” status.
Infrastructure Bill Signing
Coincident with the signing of the bipartisan infrastructure bill on November 15, the Biden Administration issued an Executive Order (EO) Establishing Priorities and Task Force for Implementation of the Bipartisan Infrastructure Law “to coordinate the law’s effective Implementation.” The EO Includes three priorities that are particularly relevant for MCAA member firm competitiveness in these new markets:
- Invest public dollars efficiently, avoid waste, and focus on measurable outcomes for the American people
- Buy American and increase the competitiveness of the U.S. economy, including through implementing the Act’s Made-in-America requirements and bolstering domestic manufacturing and manufacturing supply chains
- Create good-paying job opportunities for millions of Americans by focusing on high labor standards for these jobs, including prevailing wages and the free and fair chance to join a union
The EO creates an Infrastructure Implementation Task Force co-chaired by National Economic Council Director Brian Deese and White House Infrastructure Implementation Coordinator, Mitch Landrieu. Office of Management and Budget (OMB), Climate Policy Office, and a variety of Cabinet officials fill out the ranks of the group.
The prevailing wage requirements in the measure are broad, going beyond the usual direct Federal and federally assisted grant program projects and grant program and state prevailing wage policies in place for those types of projects. The requirements also extend to the bond financing provisions of the broad measure, and prevailing wage and apprenticeship utilization to qualify for the bonus rate on the green energy projects funded under the measure. On the tax-exempt facility bonds, the measure “… applies Davis Bacon prevailing wage requirements to all proceeds of exempt facility bonds used for construction, alteration or repair of water furnishing facilities, sewage facilities, highway or surface freight transfer facilities, or zero-emissions vehicle infrastructure facilities.”
Industry Recognized Apprenticeship Programs (IRAPs) and Standards Recognition Entities (SREs) Proposed for Formal Rescission
The IRAPs and SREs put in place in the late stages of the Trump Administration are proposed for formal rescission by the Biden Administration. In a Federal Register notice posted November 15, 2021, the long-predicted demise of IRAPs is formally set in motion by the Biden Labor Department, with a regulatory notice seeking comments on the effects of the rescission of the IRAP program, which never was finally implemented. Construction industry registered apprenticeship programs were granted an exemption from the operation of IRAPs and SREs in the final Trump Administration proposal, but the regulations permitted the expansion of IRAPs into construction in the future. That possibility is now or soon will be foreclosed.
OSHA Emergency Temporary Standard (ETS) and EO 14042 Federal Contractor and Subcontractor Mandate Undergoing Court Challenge
The OSHA ETS that would compel employers with more than 100 employees to require COVID vaccinations or regular testing has been enjoined by a panel of the U.S. Court of Appeals for the Fifth Circuit. It will undergo further hearing by the Sixth Circuit as a result of the multi-circuit lottery (unless moved) and is enjoined until further court action on the matter.
The EO 14042 Federal contractor COVID vaccination mandate for firms working on direct Federal contracts and subcontracts of $250,000 is subject to court challenge in Federal courts in Florida, Texas, Georgia, and Missouri. As of November 17, 2021, no temporary or more permanent injunction has been issued against the EO.
The court challenges to both actions are broad and, in some cases, different. The OSHA ETS challenges focus on OSHA emergency authority broadly. The challenge to EO 14042 focuses on the propriety of the Administration’s rulemaking implementing its proprietary action – whether the rules should have been issued by regular FAR public notice and comment rulemaking procedures, as opposed to the less formal Frequently Asked Question issuance of quasi regulations by the Safer Federal Workplace Task Force. Among the four court challenges to the EO, State of Texas v. Joseph R. Biden (Southern District of Texas, 21-cv-00309) is the furthest along, with a preliminary hearing held on November 16, 2021, and additional briefing in the matter called for on November 22, 2021. The initial preliminary hearing in State of Florida v. Bill Nelson (Middle District of Florida, 8:21-cv-02524-SDM-TGW) is slated for December 7, 2021. As of this writing, no dates have been set in the cases in Georgia or Missouri.
MCAA will continue to monitor the situation and provide reports as they are warranted.
