Legislation passed by the U.S. House of Representatives on July 24 is intended to assist financially troubled multiemployer DB plans that meet specified criteria, but that help would come with a hefty price tag, according to the Congressional Research Service.
In a report updated July 19, the CRS projects that the Rehabilitation for Multiemployer Pensions Act (H.R. 397) would increase the federal deficit by $64 billion over 10 years – echoing an estimate by the Congressional Budget Office(CBO) prepared for the House Ways & Means Committee on July 8. The CRS had been more uncertain about similar legislation introduced in the previous Congress but not enacted, whose fiscal impact it said was “highly uncertain because of difficulty in projecting how the loan proposal would be implemented.”
Ways & Means Committee Chairman Rep. Richard Neal (D-MA), who had introduced similar legislation (also known as the “Butch Lewis Act”) during the previous Congress, introduced H.R. 397 on Jan. 9. The Ways & Means Committee reported it to the House on July 18; one day later, the Education and Labor Committee followed suit and the Appropriations Committee discharged the bill. The measure was passed by the full House on July 24, the same day a similar bill was introduced in the Senate.
The bill would create the Pension Rehabilitation Administration (PRA), a new agency within the Treasury Department. The PRA would issue bonds in order to finance loans to “critical and declining” status multiemployer pension plans, plans that have suspended benefits, and some recently insolvent plans currently receiving financial assistance from the Pension Benefit Guaranty Corporation (PBGC).
