Pension Panel Misses Deal Deadline, But Leaders Optimistic
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Pension Panel Misses Deal Deadline, But Leaders Optimistic

December 3, 2018

By Steve Wishnia

WASHINGTON—The joint Congressional committee charged with finding a solution for the nation’s endangered multiemployer pension plans failed to make its Nov. 30 deadline for drafting legislation, but its co-chairs say they have made “meaningful progress toward a bipartisan proposal.”

Congress is still wrangling over endangered pension plans.

“While it will not be possible to finalize a bipartisan agreement before Nov. 30, we believe a bipartisan solution is attainable, and we will continue working to reach that solution,” Sens. Orrin Hatch (R-Utah) and Sherrod Brown (D-Ohio) said in a joint statement released Nov. 29. The committee’s rules require 10 of the 16 members to approve a bill before it can be sent to the House and Senate.

The Joint Select Committee on the Solvency of Multiemployer Pension Plans, consisting of four members from each party in both the House and Senate, was formed in late February to try to find a way to prevent the about 200 multiemployer plans in danger of going insolvent from dramatically slashing retirees’ benefits—or going broke and taking down the federal Pension Benefit Guaranty Corporation, which insures them. Multiemployer funds, particularly in trucking and mining, have suffered as the number of active workers contributing has fallen too low to cover the amount owed to retirees. About 1.3 million workers and retirees are in the endangered plans, including 400,000 in the Teamsters Central States fund. 

A spokesperson for Brown said that she could not give specific details about which issues progress had been made on and what remained unresolved, but that the senator’s main concerns about possible legislation were the cost to active workers, possible reductions in benefits paid, and ensuring that the PBGC can provide genuine insurance and remain solvent.  

“Co-Chairman Hatch believes a solution to the multiemployer pension crisis should spread costs for operating the system more equitably and tighten up the legal framework of the system, while insuring that taxpayers are not stuck footing the bill,” spokesperson Nicole Hager told LaborPress. “The committee has made significant progress toward an agreement that would do just that.” 

The Butch Lewis Act, the bill Brown sponsored to create a federal agency to arrange 30-year loans that would enable troubled plans to salvage themselves, is apparently off the table.

The Butch Lewis Act, the bill Brown sponsored to create a federal agency to arrange 30-year loans that would enable troubled plans to salvage themselves, is apparently off the table. It did not attract any Republican cosponsors when he introduced it in November 2017, and no action was taken after committee hearings were held in January. The House version, introduced by Rep. Richard Neal (D-Mass.), was cosponsored by 159 Democrats and 14 Republicans—several of whom, including Rep. Dan Donovan of Staten Island, are either retiring or were defeated for re-election.

Sen. Tammy Baldwin (D-Wisc.) a cosponsor of the Butch Lewis Act, said she was “disappointed” that the committee had not reached an agreement. “Pension promises must be kept, and it’s simply wrong that Washington has once again failed to protect the retirement security of 25,000 workers and retirees in Wisconsin and put small businesses on the hook for a pension liability that may cost them everything,” she said in a statement.

Brown’s spokesperson said missing the deadline was not a significant setback, as Nov. 30 was an “arbitrary” date, chosen mainly because it was after the election, given what the Hatch-Brown statement called “a highly charged political environment.”

“The problems facing our multiemployer pension system are multifaceted and over the years have proven to be incredibly difficult to address,” the statement said. “We understand that the longer that these problems persist, the more burdensome and expensive for taxpayers they become to address, and we are committed to working toward a final agreement as quickly as possible.”

December 3, 2018

ONE COMMENT ON THIS POST To “Pension Panel Misses Deal Deadline, But Leaders Optimistic”

  1. Dave M. says:

    I do not know why the pension guaranty fund could not be backed, by Federal loans. Then repaid by the pension fund after gaining solvency.
    By cutting foreign aid we could move billions if needed fund AMERICA first. Save retirees from losing homes insurance and keeping many off aid programs.

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