In-Depth: House Ways and Means Committee Chairman Richard Neal (D-MA), a longtime proponent of enhancing workers’ retirement preparedness, reintroduced this bill from the 115th Congress to address the United States’ worsening multiemployer pension crisis:
“We all know retirees with failing multiemployer pension plans who now find themselves in a devastating predicament – from truck drivers to autoworkers to ironworkers, these Americans live in all of our communities. In fact, there are 1.5 million Americans who are in plans that are quickly running out of money. These are American workers who planned for their retirement, who year after year chose to contribute to their pensions instead of taking a wage increase. Now, after working for decades, their planned retirements may be taken away from them. And taken away at a time when they no longer have time to prepare for retirement because they’re now in retirement. There’s no time to waste in addressing this crisis, and that’s why I’ve chosen to make this the first piece of legislation I introduce as Chairman of the Ways & Means Committee. This is not a bailout. These plans would be required by law to pay back the loans they receive from the PRA – the federal government is simply backstopping the risk. Importantly, my bill does not allow for any cuts to the benefits these workers and retirees earned through years on the job. Americans need our help, and it’s time to answer that call.”
The Teamsters Union expressed its support for this bill in the 115th Congress. In a joint press conference with Rep. Neal and Teamsters Local 122 members, the Teamsters’ International Vice President, John Murphy, said:
“This legislation offers a real solution to the growing pension crisis. Rep. Neal and Sen. Brown are fighting for every active and retired worker that could see their hard-earned retirement destroyed through no fault of their own.”
Although it passed the committee, this bill’s markup in the House Education & Labor Committee was contentious, as Republican committee members alleged that the committee hadn’t adequately considered this bill’s ramifications and had shut down debate on it. Rep. Virginia Foxx (R-NC), the ranking Republican on the committee, said, “It is simply irresponsible to bring a bill addressing such a complex and far-reaching issue before the Committee for markup with only days’ notice.”
After the HELP Committee passed this bill, Rep. Neal said:
“More than a million Americans are in multiemployer pension plans that are quickly running out of money, putting families across the country at risk of unexpected financial hardship. It’s simply not right that – by no fault of their own – these workers and retirees could lose decades’ worth of savings they earned and chose to take instead of wage increases.”
This bill passed the House Ways and Means Committee by a 25-17 vote with the support of 209 bipartisan cosponsors, including 200 Democrats and nine Republicans, in the 116th Congress. Last Congress, it had 174 bipartisan cosponsors, including 160 Democrats and 14 Republicans, and didn’t receive a committee vote.
The National United Committee to Protect Pensions and the Pensions Rights Center expressed their support for this bill in 2017. Both organizations wrote letters to Sen. Sherrod Brown (D-OH), who sponsored the Senate version of this legislation that year, expressing their support.
Of Note: There are about 1,400 multiemployer pension plans across the U.S., covering about 10 million people. Although these pension plans have been historically successful, a number are facing funding problems today and are almost certain to run out of money. If these plans run out of money, retirees, workers, and their families would lose benefits earned over lifetimes of work through no fault of their own.
This bill is a rebranded version of the Butch Lewis Act, which Sen. Sherrod Brown (D-OH) first introduced in the Senate in 2017. It comes after the Joint Select Committee on Solvency of Multiemployer Pension Plans failed to advance a rescue package at the end of the last Congress after holding five hearings on the topic of underfunded multiemployer plans. Democrats on the committee had lobbied for the Butch Lewis Act as the basis for a rescue package, but Republicans on the committee expressed concerns over the funds’ abilities to repay the loans and negotiations over the question of benefit cuts stalled.
The Pension Rights Center notes the urgency of Congressional action on this issue. In March 2019, it wrote:
“There is an urgent need for congressional action to develop a common sense, comprehensive solution to save underfunded pension plans, protect the benefits of workers and retirees, and also to put the Pension Benefit Guaranty Corporation (PBGC), the federal agency that insures these pension plans, on a path to solvency. If nothing is done, it is estimated that the PBGC will run out of money for its multiemployer insurance program in about six years.”
At the 2018 ASPPA annual conference, PBGC Director Tom Reeder told attendees “the multiemployer insurance program is in dire straits.” He said that unlike the single-employer plan, “it is not possible to earn your way out of this deficit” and said the program is at “a critical crossroads we’re going to have to cross over very soon.”
Summary by Lorelei Yang(Photo Credit: iStockphoto.com / Bill Oxford)