Construction Today - October/November 2011 - (Page 136)

Civil By Harvey M. Katz PLANNING YOUR PENSIONS M ost construction industry employers that contribute to a multi-employer plan know they can become liable for withdrawal liability when they cease contributions. The imposition of withdrawal liability upon contributors was a sea change in the law when introduced approximately 30 years ago. Recently, a new sea change has gone largely unnoticed. In 2006, Congress enacted the Pension Plan Protection Act (PPA). Few employers realize their liability for increased contributions to multi-employer funds, under PPA, could far exceed their potential withdrawal liability. What is different is that it imposes liability on contributing employers to plans in financial difficulty. These increased contributions could force marginal employers out of business, and the loss of their contributions could start a dangerous downward spiral. In enacting PPA, Congress recognized that employers’ withdrawal liability payments were insufficient to prevent continued financial deterioration for many multi-employer funds. PPA established a mechanism to impose additional contribution requirements upon employers contributing to troubled plans. Plans are classified according to their financial status: not endangered, endangered, seriously endangered and critical. Practitioners have dubbed these categories as Green, Yellow, Orange and Red Zone plans. In general, a plan with assets covering more than 80 percent of its liabilities – i.e., the present value of its benefit obligations – is a Green Zone plan. A Yellow Zone plan has less than 80 percent of its benefit obligations funded or is projected to incur a minimum funding deficiency within seven years. An Orange Zone plan is both less than 80 percent funded and has a minimum deficiency projected within seven years. A plan with less than 65 percent of the assets versus liabilities that is projected to incur a minimum funding deficiency within five years or projected to become unable to pay benefits within seven years is a Red Zone Plan. The PPA requires Yellow and Orange Zone plans to improve their funding status within a funding improvement period, which is 10 and 15 years for Yellow and Orange zone plans, respectively, with the goal of reducing underfunding by 33 percent for Yellow and 20 percent for Orange Zone plans. Orange and Yellow Zone Plans may not accept any collective bargaining agreement (CBA) that lowers contributions by any employer, suspend employer contributions for any period or exclude newly hired employees from participation. Rehabilitation Plans Red Zone plans must adopt a rehabilitation plan by the 330th day of the plan year. This plan must improve funding within a 10-year rehabilitation period. At minimum, the rehabilitation plan must provide maximum reduction of future accruals and adjustable benefits. Adjustable benefits are benefit increases adopted within 60 days of the effective date of critical status, early retirement subsidies, post-retirement death benefits, benefit options other than qualified joint and survivor benefit 136 CONSTRUCTION-TODAY.COM OCTOBER/NOVEMBER 2011 http://www.CONSTRUCTION-TODAY.COM

Table of Contents for the Digital Edition of Construction Today - October/November 2011

Construction Today - October/November 2011
Energy Efficiency
Green Building
Executive Perspective
Best Practices
Bernards Construction – El Capitan High School
Bogner Construction Co. – College of Wooster Scot Center
Jean McClung Middle School
Hellas Sports Construction
The Walsh Group – NOAA Pacific Regional Headquarters
Haskell Co. – Scripps Proton Therapy Center
Robert A. Bothman Inc. – Stockton Unified School District
JE Dunn – Energy Systems Integration Facility
Rosendin Electric – AVUHSD Solar Project
Ratcliff Construction Company – Crossroads Church
University of Texas Southwestern Medical Center
Flintco Pacific – Calaveras County Adult Detention Facility
Lee Lewis Construction – Angelo State University’s Plaza Verde Student Housing
Manhattan Construction – First Baptist Church of Dallas
Market & Johnson – Eau Claire County Courthouse project
McTech Corp – 97th Military Police Battalion Headquarters
Parkland Health & Hospital System
RBC Construction
Central Building and Preservation – Randolph Tower City Apartments
Scaparotti Construction Group
Trinity Properties – Trinity Place
Advanced Real Estate Services
Lawrence B. Wohl Inc./Wohl Diversified Services
TN Ward and Commercial Interiors – Maryland Live
ASX Construction – Parc Lafayette
Bayland Buildings Inc.
Dependable Mechanical Systems
New Dawn Developments
DSLD Homes
Aquilini Development and Construction Inc.
Cobalt Construction – Meta Housing
Lifestyle Communities
Pratt and Associates LLC
Miramonte Homes
MP J.J. Duffy Joint Venture/Pathway Senior Living LLC – Victory Centre Vernon Hills
Woodland Homes
Aecom/Inima Joint Venture – Hialeah, Fla., Water Treatment Plant
MWH Constructors – Austin Water Treatment Plant No. 4
Pepper-Lawson Construction – Missouri City Surface Water Treatment Plant
MWH Constructors – AWT Improvements
Blount Contracting Inc.
Harbor Offshore Services
Cruz Construction Inc.
Humble Construction
Nova-Con Projects Ltd.
Trimen Electric
EllisDon Corp. – Atlantic Region
EllisDon Corp. – St. Joseph's Regional Mental Health Care
Focus Equities
Intercom Services Immobiliers
George Brown College – New Waterfront Campus
Seaside Transportation Services
Last Look

Construction Today - October/November 2011