In late November, House Ways & Means Chairman Kevin Brady (R-TX) unveiled a package of tax extenders and technical corrections to last year’s landmark tax reform legislation. Included in the bill is a pension provision that will make it easier for manufacturers to offer competitive retirement benefits to their employees.
When companies transition from a traditional defined benefit (DB) pension plan to a defined contribution (DC) 401(k) plan, many businesses grandfather longer service employees into the existing DB pension and offer the new 401(k) only to new employees. This allows existing employees to remain in their long-standing pension plan as they near retirement.
This approach, called a “soft freeze,” allows companies to provide competitive retirement benefits to all employees, regardless of their tenure. However, over time these plans can trigger IRS nondiscrimination rules as the employees in the DB plan continue to increase in both time served and compensation relative to the newer employees in the DC plan. This can lead to companies being forced to institute a “hard freeze” on the plan, meaning that employees miss out on their prime years of benefit accruals.
Chairman Brady’s legislation provides an alternative solution that would modify the nondiscrimination rules to allow plan sponsors to protect grandfathered employees when transitioning from a DB to a DC plan structure. Provided that the plan does not violate any nondiscrimination rules when it is set up and no significant changes are made going forward (other than changes in employees’ employment status and/or compensation), it would not violate nondiscrimination rules as the longer service DB employees advance through their career.
This targeted reform would prevent companies from unintentionally violating the nondiscrimination rules, allowing manufacturers to compensate employees competitively and attract talent in a tightening job market. The NAM signed a coalition letter supporting this change, which is modeled after bipartisan legislation introduced by Reps. Pat Tiberi (R-OH) and Richard Neal (D-MA) and Sens. Rob Portman (R-OH) and Ben Cardin (D-MD). The NAM will continue to advocate for this important reform as the tax bill moves through Congress.
At Whirlpool Corporation, we are committed to being a responsible corporate citizen, both because it’s the right thing to do and because it’s good for business. This year, we furthered our commitment by taking a number of steps to minimize our impact on the environment while also supporting our employees and the communities in which we live and work.
As we advance our global sustainability strategy for the tenth year in a row, we remain a company that prides itself on making positive change to affect people’s lives in meaningful ways. We are committed to going above and beyond the expectations, targets, and reports, by making our products in plants that are more efficient, and in sourcing materials and energy in ways that make a significant difference in lowering not just our carbon footprint, but also positively impacting our consumers and communities in which they live.
Our focus on conserving our planet’s resources continued this year. We met our 2020 goals for energy and water usage three years early, and have set new sustainability goals, which exceed the original U.S. commitments to the Paris climate accord. We also expanded our use of on-site renewable energy, including our wind turbine program in Ohio and solar program in India. We are proud to be one of the largest on-site users of wind energy in the U.S. Further, we are committed to manufacturing more water and energy-efficient, high-performing products, helping consumers save money while lessening their impact on the environment.
We will continue to take a science-based approach to setting absolute environmental targets from the 2005 baseline. We invest in on-site renewables, achieving emission reductions and lowering costs and creating more resilient plants. We have achieved zero manufacturing waste to landfill in plants in multiple regions. In products, we continue to deliver valuable efficiency while improving the core performance our consumers expect. We are driving sustainability into how we design, build, distribute, sell, and care for our products in their use and at the end of their life.
A version of this blog was found in the Whirlpool Corporation 2017 Sustainability Report. To view the full report, click here.
The countdown clock has begun for the Chemical Facility Anti-Terrorism Standards (CFATS) program, as it will sunset on January 18, 2019 — unless Congress acts first to reauthorize it. Unfortunately, with Congress set to adjourn in a matter of weeks and a limited number of days remaining on the legislative calendar, manufacturers are becoming increasingly concerned that CFATS will lapse and our nation’s security will be at risk. This is an issue of critical importance to the NAM: our members operate 2,152 CFATS-regulated facilities spanning a range of major industrial sectors — such as oil and gas refining; chemical production and distribution; mining; agricultural goods and services; and electrical utilities — and they are counting on Congress to act expeditiously and reauthorize this program without delay.
Operated by the Department of Homeland Security (DHS), the CFATS program relies on a multitiered risk assessment process to identify and regulate high-risk facilities. DHS ensures that CFATS-regulated sites have appropriate security measures in place to mitigate, prevent and protect against terrorist exploitation. Since its inception in 2007, CFATS was tied to short-term appropriations measures, which prevented Congress from making statutory improvements to the program. However, the four-year congressional authorization of CFATS in 2014 was a pivotal moment for the program’s longevity. Manufacturers were provided with the regulatory certainty needed to make long-term security investments, and it enabled DHS to run the program more effectively. Now is the time to pass a full reauthorization once more for this vital program—and there are multiple different proposals already introduced in both chambers of Congress to do so:
- Senate: Ron Johnson (R-WI) is committed to moving the Protecting and Securing Chemical Facilities from Terrorist Attacks Act of 2018 (S. 3405) forward by regular order and is engaged in negotiations with his colleagues. The bill reflects the NAM’s top three reauthorization priorities that we asked for during the Senate Homeland Security and Governmental Affairs Committee (HSGAC) roundtable in June. The legislation would reauthorize the CFATS program for five years, provide needed certainty to the regulated community and enhance the security of our nation. The Senate HSGAC favorably approved S. 3405 on September 26.
- House: The House also has two CFATS reauthorization bills in play. On September 28, Reps. John Katko (R-NY), John Moolenaar (R-MI) and Henry Cuellar (D-TX) introduced a bipartisan bill similar to S. 3405. The NAM joined with the CFATS Coalition and sent letters to Johnson and Reps. Katko, Moolenaar and Cuellar for their leadership on this important issue. In addition, on November 29, House Homeland Security Committee leadership and Energy and Commerce Committee leadership introduced legislation that would reauthorize CFATS for two years.
Securing the homeland requires strong partnerships among government at all levels, the private sector and concerned citizens across the country. Action to support these partnerships is needed now. CFATS reauthorization is and should continue to be a bipartisan issue that lawmakers on both sides of the aisle work on together to achieve. Security will remain a top priority for manufacturers, and they are dedicated to protecting their facilities and the communities in which they live and serve. Manufacturers call on Congress to reauthorize the CFATS program without delay for the sake of our nation’s national security.
Congress and the SEC must take steps to bring oversight and reform to the proxy firm industry.