A bill to provide some relief for the struggling multiemployer pension system has been reintroduced in the U.S. Senate – even as the House of Representatives passed comparable legislation.
Last night the House passed the Rehabilitation for Multiemployer Pensions Act (H.R. 397) in a 264-169 vote (for those of you keeping track, the bill got the votes of all the Democrats and 29 Republicans). The bill, sponsored by House Ways & Means Chairman Richard Neal (D-MA), mirrors a 2017 bill introduced by Sen. Sherrod Brown (D-Ohio). The legislation would create a Treasury agency to issue bond-backed loans to faltering multiemployer plans. Positioned as a step toward staving off a looming funding crisis for multiemployer plans, the measure drew harsh criticism from Republicans, who characterized the bill as a taxpayer bailout – echoing the perspectives when it passed the House Ways & Means Committee on a party-line vote earlier this month.
There currently are about 1,400 multiemployer plans covering nearly 10 million people across the country.
None other than newly nominated Pension Benefit Guaranty Corporation (PBGC) Director Gordon Hartogensis that same day issued a press release highlighting the problem, noting: “Multiemployer pension plans are in crisis, posing a threat to the promised retirement income of millions of American workers and retirees and their families. Congress should enact a long-term, sustainable solution taking into account fairness to retirees, workers, taxpayers, and employers, to improve retirement security for hard-working Americans and their families.”
It was also a point made by former PBGC Director Tom Reeder to elite advisor delegates at the NAPA DC Fly-In Forum earlier this week, as he pointed out that, on a termination basis, multiemployer pensions at Sept. 30, 2018 (the PBGC’s fiscal year-end) had $2.3 billion in assets to cover some $56.2 billion in funding liabilities. In fact, he noted, among the 10.6 million individuals covered by those programs, more than half were in plans with a funding ration less than 50%.
The effort in the Senate was led by former members of the Select Pensions Committee, Sens. Sherrod Brown (D-OH), Tina Smith (D-MN) and Joe Manchin (D-WV), along with Minority Leader Charles E. Schumer (D-NY). They were joined by 27 Democratic senators in reintroducing the Butch Lewis Act in the Senate.
Proponents note that the legislation – named for a retired Ohio Teamster – would “address the pension crisis threatening the retirement of more than 1.3 million workers and retirees nationwide and putting small businesses across the country in jeopardy.” According to a press release, the Butch Lewis Act would create a loan program to allow failing pensions plans to borrow the money they need to “put plans back on solid ground and ensure they can meet their commitments to retirees and workers for decades to come.” The bill’s sponsors also claim that by putting the plans back on solid footing, the bill would also protect small businesses from the threat of closing their doors if plans are allowed to fail – and “solve the pension crisis without cutting benefits retirees have earned.” They note that the bill would put safeguards in place to encourage pensions to “remain strong so they can be there for today’s workers when they retire.”
That said, while the Senate bill’s introduction had a lot of support, at present it’s all on one side of the aisle, and that might have an impact on its eventual passage, and/or reconciliation with the House version.
And that reality might explain the closing sentence in PBGC Director Hartogensis’ statement: “Only bipartisan compromises have a chance of succeeding and it is time to renew such bipartisan efforts to find serious solutions.”
- The bill’s sponsors explain that Butch Lewis was the retired head of Teamsters Local 100 in Evendale, OH, who fought to preserve his fellow Teamsters’ pensions, and passed away due to a stroke on New Year’s Eve in 2015 – a stroke that his doctors attributed, at least in part, to the stress he faced fighting the proposed pension cuts.
- Along with Sens. Brown, Smith, Manchin and Schumer, cosponsors of the bill include Sens. Tammy Baldwin (D-WI), Richard Blumenthal (D-CT), Cory Booker(D-NJ), Bob Casey (D-PA), Tammy Duckworth (IL), Dick Durbin (D-IL), Kamala Harris (D-CA), Maggie Hassan (D-NH), Martin Heinrich (D-NM), Mazie Hirono (D-HI), Doug Jones (D-AL), Tim Kaine (D-VA), Amy Klobuchar (D-MN), Ed Markey (D-MA), Jeff Merkley (D-OR), Gary Peters (MI), Jacky Rosen (D-NV), Bernie Sanders (I-VT), Jeanne Shaheen (D-NH), Debbie Stabenow (D-MI), Chris Van Hollen (D-MD), Elizabeth Warren (D-MA) and Sheldon Whitehouse (D-RI).