R E M A R K S
Mark H. Ayers
Chairman
National Coordinating Committee for Multiemployer Plans
and
President
Building & Construction Trades Department
AFL-CIO
to
NCCMP Annual Conference
Las Vegas, Nevada
October 5, 2009
Good Morning!
And thank you, Randy for that kind introduction.
With the state of our economy and the effect of this recession on many of our industries, it is encouraging to see that so many felt this Conference and the issues we’ll address are front and center on most of our agendas.
It is also a clear indication of how important the topics of this conference are to you and to your plans’ participants.
Although it’s mainly an unintended consequence of scheduling, it is fitting that we are meeting in Las Vegas because this city is a prime example of the deep pain this crippled economy is inflicting on union families and signatory employers across the country.
According to recent reports, Nevada’s unemployment rate is 13.2%. That’s 36% higher than the national average of 9.7%. This problem is especially acute in the construction industry, for many years a beacon of prosperity in Las Vegas, but which is now suffering from unemployment rates that are two to three times the national average.
To the North of us in Reno unemployment in construction is 40 – 70%.
While our health plans typically have eligibility rules that anticipate periods of unemployment, prolonged economic downturns eventually result in the loss of health benefits for many workers and their covered dependents. This can be catastrophic for workers that have already seen their wages fail to keep up with cost of living over the last twenty years, and who watched their purchasing power decline over the same period.
Many workers also are unable to meet their basic financial obligations, including mortgage payments, as evidenced by Las Vegas’ high home foreclosure rates.
While there is hope and promise on the horizon it can’t come fast enough for many. As you all know, there is a direct relationship between the loss of jobs that generate contributions to our funds, and those funds’ abilities to recover from the meltdown of the investment markets.
This threatens the viability of our pension and health benefit plans and places additional strains on our employers’ abilities to remain competitive.
For these reasons, the public policy debates that occupy center stage in Washington have never been more crucial to the long-term financial security of our members and our plans.
I’d like to take the next few minutes to review these issues and to lay the foundation for our Conference discussions over the next few days.
Every American adult – unless they’ve been living on the dark side of the moon for the last eight months is keenly aware that the top domestic policy issue for the Congress and the Obama administration is the passage of health care reform.
Those of us who live outside the beltway have been inundated with propaganda, innuendo, fear mongering, rumors and outright lies about the content and meaning of the numerous proposals that have surfaced both in the House and Senate.
Most of us have not heard the facts about what is in these proposals.
Rhetoric has clouded the arguments of those on either side who have already figured out what might be in their own self-interests. Also, partly because the “gang of six” in the Senate kept much of their deliberations under wraps until two weeks ago, there has been a real shortage of facts about what they are proposing. But, based on what we are seeing just in the last few days, it falls short of any meaningful comprehensive reform.
Certainly, we are strong supporters of reforming the broken health care system. For too long, our health and welfare funds have experienced out of control health care inflation. In a system where nearly 50 million Americans cannot afford health insurance, the only option for people to receive care is in the Emergency Room.
When they cannot pay their bills, heavy financial burdens are shifted to our plans.
Unfortunately, not all of the proposed provisions have been encouraging. For example, there have been proposals to tax employees who receive employer sponsored benefits. Alternatively, there have been proposals to tax insurance companies that offer high-cost plans and, by extension, also tax our plans that are above a certain level.
And, there are proposals that would provide a so-called “small business exemption” which would do nothing more than to incentivize the misclassification of workers to keep worker counts below artificial thresholds.
That is why a strong employer mandate with no exemption – none - is so critical to reform.
Some people advocate subsidies for small businesses that seek coverage in the new Health Insurance Exchange, but would not be available to our signatory small businesses or plans.
In addition to these provisions, our plans will see increased costs because of proposals that eliminate annual or lifetime benefit caps and mandate new benefits with their associated additional costs.
However, if a public option has no annual or lifetime benefit, and mandates better benefits than our plans have, then we’ll have to make adjustments or we could end up with a public option that is superior to multiemployer funds.
Because the elimination of annual and lifetime limits are included in each of the reform proposals to meet the public policy objective of eliminating medical bankruptcies we have planned an insurance workshop for this afternoon.
During the workshop you will be able to hear from and question insurance industry professionals about the potential cost implications of purchasing stop-loss coverage to reduce our plans’ exposure to catastrophic risk.
We continue to push for what works in the five different bills that are currently before Congress. As most of you know, there is a tremendous amount of work going on that is very fluid and very fast paced; work that demands patience, enormous sacrifice of time and unrelenting perseverance. These are the qualities practiced and emulated by NCCMP Executive Director, Randy DeFrehn and his devoted and talented staff who have never taken their eye off the ball throughout these challenging times.
Randy and his staff epitomize commitment and they live up to the value proposition that NCCMP members enjoy.
Equally important, NCCMP is supported by a group of dedicated and professional legislative representatives from both labor and management, along with health policy experts who have been engaged on your behalf on a daily basis to intervene on problem proposals and amendments.
I am proud of their efforts, as they continue to represent you with professionalism and vigor.
Through them, and by any other appropriate means, we must continue to emphasize our fundamental principles for reform:
A strong employer mandate.
No taxation of benefits.
And a robust public option that will bring much-needed competition and cost-savings to the health insurance industry.
Those of you who attended Saturday’s Seminar on Health Care Reform Legislation have already received an extensive explanation of the proposals that have been passed in the committees of jurisdiction in both the Senate and the House.
Many of you know Jim Ray, who has been the NCCMP’s chief health care lobbyist for many years. Jim continues to take a lead role in providing critical and strategic analysis of proposed legislation to help formulate our response to the health reform legislative process.
He and a panel of health care experts and lobbyists, provided an excellent in-depth briefing on the strengths and weaknesses of the respective proposals and how they would affect multiemployer health and welfare funds.
Jim and a somewhat different panel will join us tomorrow morning to share their observations and experiences on what has happened to date and to share their perspectives on likely next steps.
Although you would not know it by what you hear on network television there is another critically important topic to us all today and that is the impact of the financial crisis on the funded level of our defined benefit pension plans, and the related effort to seek relief from the immediate impact of the PPA funding rules for multi-employer plans.
We received some temporary relief from the requirements of the “Zone” system, in large part because of the efforts of the NCCMP - that became part of the “Worker, Retiree and Employer Relief Act of 2008,” or “WRERA” [pronounced “REE-RAH”]. I am constantly amazed by Washington’s incomprehensible fascination with acronyms.
As you recall, at last year’s conference, we discussed our concerns over the decline of investment markets. At that time, the Bush Administration and Congress were trying to prevent the destruction of our financial system by designing the Troubled Asset Relief Program (or TARP).
Even as we met, the NCCMP was talking with Senate staff to ensure that pension plans were eligible to receive assistance under that program. But it wasn’t until late December, after the general election, that Congress acted to provide stopgap relief promising that a serious examination of plan funding rules would be undertaken following the swearing in of a new Congress, with substantially larger progressive majorities, in late January.
Following a call for suggestions as to how the multi-employer community could best address the funding problems, the Multiemployer Pension Plans Coalition was reconvened. The Coalition evaluated the list of suggested solutions in order to find a mutually-acceptable set of proposals that all could support.
Then, working with staff from appropriate House and Senate Committees, the NCCMP conducted a survey of the funded status of multi-employer plans. The preliminary results of that survey are in, and will be a part of this morning’s presentation.
We will also hear more about the specifics included in the formal legislative proposals under consideration by the House and Senate and the likelihood of some legislation being enacted before the end of the year.
Ladies and gentlemen, the importance of these issues for our plans, and the dire need to find a solution to our own circumstances, may make us feel that this is a problem unique to our plans and our country. But you have heard at past conferences that our problems are really not that unique, and, in fact, are the same problems as those faced by plan sponsors in virtually all developed nations.
The problems of an aging workforce, rising immigration, uncontrolled health care costs, and the effects of increasing longevity are problems being addressed by plans and governments around the world. The plans and societies whose structures most closely mirror our own are those in Canada and the European Union in particular. Each have their own organizations that parallel the mission and activity of the NCCMP.
In Canada, there is the Multi-Employer Benefit Plans Council of Canada (or MEBCO) and in Europe it is the European Association of Paritarian Institutions of Social Justice (or AEIP).
After extensive discussions of our common concerns, the three groups determined that it is in our common interest to create a more formal system of communication and to coordinate among our organizations.
As a result, this past June Randy hosted the first annual global benefits conference. This conference will be hosted in alternate years between Europe and North America. At the June meeting, we developed formal protocols on behalf of each of the three organizations forming the Consortium of Advocates for Worker Benefit Security.
Tomorrow morning you will hear more about that endeavor from several representatives of our new global coalition. More importantly, you will hear presentations about the current state of health and pension benefit programs in their countries and how they have responded to the world-wide financial crisis.
We are pleased to welcome our new partners and hope that you will get to know and interact with each other and actively engage them in a discussion of our common concerns over the next few days.
In addition to our general sessions, we invite you to look closely at your selection of workshops this afternoon and tomorrow. These sessions will provide you the opportunity to participate in small group discussions on selected topics.
Tomorrow, we will honor the efforts of one special individual when we present the 9th Annual “John L. Lewis Award”. Every now and then, the efforts of one individual prove that with the right motivation and an unrelenting passion we can produce results beyond anyone’s expectations. That’s what the John L. Lewis Award is all about, and I encourage you to be with us for that presentation.
Ladies and gentlemen, before we bring up President Hite to do the formal introductions, I would like to leave you with some final thoughts.
Multiemployer plans have successfully provided economic security to tens of millions of people for more than 60 years through the best of times and, recently, some of the darkest.
Multiemployer plans represent the best of the private sector, with labor and management working together to protect generations of working Americans against medical bankruptcies (except in rare circumstances).
They have allowed our participants to conclude a lifetime of hard work followed by a dignified retirement without having to depend on the kindness of relatives or public assistance.
Corporate America has largely abandoned defined benefit plans, leaving multiemployer plans and public employer plans as the last bastion of secure retirement benefits.
Furthermore, along with companion health benefit programs, our plans and the unions that created them helped create the American middle-class.
As a society we cannot afford to perpetuate the status quo. Out of control health care costs and the current inflexibility of our pension funding rules not only threaten the future of our benefit programs but the ability of our employers to compete in the marketplace.
Take full advantage of your time here to get a firm grasp on the issues presented, so that you will be as effective as possible in expressing your opinions to your Members of Congress when you return home.
Let them know that while the economic downturn may ease, the magnitude of the losses to our pension plans will require much more time to meet the funding benchmarks.
Now is the time to act.
We may not get a second chance.
The American Dream and the preservation and expansion of the middle class clearly rests in our ability to make life better for those we represent.
Thank you for your kind attention and enjoy your time here in Las Vegas.
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