Last week, Rep. John Kline, R-MN, chairman of the HouseCommittee on Education and the Workforce, and co-sponsor of thecontroversial 2014 Multiemployer Pension Reform Act,released a discussion draft — or a proposal on proposed legislation— that would reform how collectively bargained pension plans aredesigned.

Related: Number of critically funded multiemployer plansgrows

The draft proposes to amend the Employee Retirement IncomeSecurity Act to allow multiemployer plans to deploy a so-calledcomposite plan design.

The composite option, which marries components of definedbenefit and defined contribution plans, was first circulated in2013, in a brief issued by the National Coordinating Committee forMultiemployer Plans, a nonprofit advocate for employer sponsors ofmultiemployer plans, entitled “Solutions not Bailouts.”

Related: What would a government bailout of PBGC looklike?

That paper enumerated recommendations to address the nation’smost critically underfunded multiemployer plans, many of which wereincorporated into Kline’s 2014 MPRA legislation, including aprovision in the law that allows for benefit reductions in the mostbeleaguered plans.

But legislation did not adopt an amendment to ERISA that wouldpave the way for composite plans.

With his recent draft proposal, Kline is hoping to musterlegislative support for fundamentally changing how the plans aredesigned. Kline’s proposal was drafted with input from the NationalCoordinating Committee for Multiemployer Plans, according to a blogpost from Segal Consulting, which advises many of the largestmultiemployer plans.

In "Solutions Not Bailouts," the National Coordinating Committeefor Multiemployer Plans endorsed the need for greater“flexibility” in the statutory governance of multiemployerplans.

Features of defined benefit plans — namely the provision of alifetime retirement income stream — “must continue their vital rolein providing retirement security to millions of multiemployer planparticipants,” the organization said in "Solutions NotBailouts."

But as sponsors’ contribution requirements have increased inlight of lower plan funding levels, the multiemployer system hasbecome threatened by withdrawal liability, forcing more employersto leave plans, which are also struggling to attract newemployers.

Related: Bill introduced to push publication of pensionliabilities

“If a plan gradually loses contributing employers and is alsounable to attract new ones, then over time it will ultimately failregardless of how well funded it might be,” wrote the NationalCoordinating Committee for Multiemployer Plans in "SolutionsNot Bailouts." “Without strong employer participation, no employersponsored retirement plan can succeed.”

Kline's plan

The composite plans advanced in Kline’s discussion draft wouldnot be insured by the Pension Benefit Guaranty Corp., whichguarantees a base level of benefits in multiemployer plans. PBGC’smultiemployer program is projected to be insolvent in 10 years.

A summary of the discussion draft issued by Kline’s office said“this will protect taxpayers from greater risk of footing the billfor a multibillion dollar bailout” to PBGC.

Under composite plans, participants will receive benefits in theform of annuities, the value of which will be based on employercontributions, participant contributions and “conservative” fundingrequirements. Benefits can be increased when a plan is expected tobe 120 percent funded in 15 years.

Employers that shift to composite plans will still be requiredto fund their commitments to traditional multiemployer plans,according to a summary of the discussion draft.

In a statement, Kline said, “this proposal will provide moreretirement choices for workers, more flexibility for employers, andgreater protection for taxpayers. It reflects the input of businessand labor leaders, as well as retiree advocates who have longrecognized the need to strengthen retirement security.”

The U.S. Chamber of Commerce has issued a statement in supportof the discussion draft.

Other stakeholders are wary of composite plans. A letter tomembers of Congress signed by the Pension Right’s Center, whichadvocates on behalf of retirement plan participant rights, andseveral prominent trade unions, expressed “strong opposition” tocomposite plans, and urged members not to consider the “flawed”proposals in the discussion draft.

The draft’s proposals would weaken existing funding standards,allow sponsors to escape paying penalties for withdrawing fromplans, and leave new workers enrolled in composite plans withinadequate protections, the letter said.

“Our organizations do not oppose new forms of retirement savingsplans,” the letter opposing Kline’s discussion draft said.“However, we do oppose proposals that permit employers and plans toadopt new plans while putting at greater risk the funding ofalready unfunded pension promises in existing plans.”

Related: The case for hybrid corporatepensions