Senate Bill Would Create Pension Rehabilitation Trust Fund, New Agency

Sen. Sherrod Brown (D-OH) has introduced legislation that would create a Pension Rehabilitation Trust Fund and a Pension Rehabilitation Administration. He intends the bill to protect pension benefits for retirees in multiemployer DB plans.

Brown intends the bill, S. 2147, to protect the retirement benefits of participants and retirees in multiemployer plans serving union members, which comprise a significant portion of his constituents. The bill would affect other retirees as well.

The bill calls for the creation of a new office within the U.S. Treasury Department, the Pension Rehabilitation Administration (PRA). The PRA would allow pension plans to borrow money in order to remain solvent and continue providing retirement benefits to current and future retirees. The PRA could lend the plans money for 30 years at low interest rates in order to facilitate easier repayment and to give the plans more time to make long-term investments while paying benefits.

The bill also would:

  • forbid plans to borrow more than they can pay back to taxpayers;
  • forbid borrowed funds from being used to make risky investments;
  • require plans that borrow money to submit reports every three years to demonstrate that they are on track to getting back on solid footing;
  • provide for the sale of Treasury-issued bonds to financial institutions to fund the loans and the PRA; and
  • call for the Pension Benefit Guaranty Corporation to bridge the gap between money borrowed from the PRA and any additional funding needed to pay benefits owed to current retirees while the plans get back on track.

“If nothing is done to the plans, they will fail and retirees will face massive cuts to the benefits they earned over decades of work. If the plans are allowed to fail, not only will they no longer be able to pay promised benefits, but taxpayers would be at risk of having to pay billions because the Pension Benefit Guarantee Corporation (PBGC) would be on the hook for billions of dollars it cannot pay,” said Sherrod in a press release.

Brown introduced S. 2147 on Nov. 16; the bill was referred to the Senate Finance Committee.

Add Your Comments

One Comment

  1. dennis renk
    Posted November 27, 2017 at 2:38 pm | Permalink

    Many multi employer pensions had rainy day funds that made the IRS tell them they were holding too much money and would be fined if the IRS or whatever government agency would have let them be managed without interference they would have been fine so maybe this will be a way too do the right thing

Post a Comment

Your email is never published nor shared. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

Send this to a friend