Rep. Wild Votes to Advance Bill to Address the Multiemployer Pension Crisis
WASHINGTON – Today, U.S. Representative Susan Wild (PA-07) voted to advance H.R. 397, the Rehabilitation for Multiemployer Pensions Act, through the House Education and Labor Committee. H.R. 397 is bipartisan solution to address the multiemployer pension crisis which is putting the retirement security of millions of Americans at risk, threatening workers, businesses, and our economy.
“This multiemployer pension crisis isn’t some far-away, hypothetical event,” Wild said. “More than a million multiemployer pension plan participants – employees and retirees – will face loss of pensions and loss of savings. Pensions that are at risk through no fault of the employee and retiree. Imagine working for 40+ years only to see your earned benefits wiped away. We must take action to address this crisis. We owe our workers the pensions they have earned.”
Many multiemployer pension plans are in financial crisis. Soon, these failing plans will be unable to pay out the benefits owed to retirees. Making matters worse, the Pension Benefit Guaranty Corporation (PBGC), which insures private sector pension plans, is rapidly running out of money to backstop failed multiemployer pension plans. If plans fail, and if the PBGC’s multiemployer program becomes insolvent, retirees will see their pensions reduced to nearly zero. On top of this, there also will be catastrophic consequences for active workers and employers as well as hundreds of billions of estimated costs to the federal government.
H.R. 397, the Rehabilitation for Multiemployer Pensions Act, is a bipartisan bill which establishes a Pension Rehabilitation Administration (PRA) within the Department of the Treasury. The PRA is authorized to finance loans to failing multiemployer pensions plans, plans that have suspended benefits, and some recently insolvent plans currently receiving financial assistance from the PBGC. Those pension plans that could not remain or become solvent with only a loan could apply to the PBGC. Those pension plans that could not remain or become solvent with only a loan could apply to the PBGC for additional financial assistance in conjunction with a PRA loan. This bill protects retirees’ pensions and does not require benefit cuts.
The Rehabilitation for Multiemployer Pensions Act has 161 bipartisan cosponsors in the U.S. House of Representatives. The diverse coalition of supporters of H.R. 397 include: AARP, Bakery and Confectionary Union and Industry International Pension Fund, BlackRock, International Association of Machinists and Aerospace Workers (IAM), International Brotherhood of Boilermakers, International Brotherhood of Electrical Workers (IBEW), International Brotherhood of Teamsters (IBT), National Retirees Legislative Network (NLRN), Pension Rights Center, United Food and Commercials Workers (UCW), United Steelworkers (USW), and Western Conference of Teamsters Pension Trust.
Rep. Wild’s full remarks as prepared:
Thank you, Mr. Chairman. I move to strike the last word.
This multiemployer pension crisis isn’t some far-away, hypothetical event. By 2025, the Central States Pension Fund and the Pension Benefit Guaranty Corporation (PBGC) will be insolvent. And, if you’re sitting here today thinking “I don’t have one of those pension plans” or “why should federal loans be provided to protect retirees that I don’t know,” the answer is: everyone is harmed by this crisis.
As employers leave multiemployer pension plans—either voluntarily or, as the case often is, because of bankruptcy— successful businesses are left holding a disproportionate risk of insolvency. Thousands of successful businesses will be harmed by multiemployer pension and PBGC insolvency because they’ll face uncertainty from lenders and potential loss of suppliers or other companies upon which they rely.
More than a million participants— employees and retirees— will face loss of pensions and loss of savings. Pensions that are at risk through no fault of the employee and retiree. Imagine working for 40+ years only to see your earned benefits wiped away.
And imagine the enormous cost to the federal government—the lost tax revenue and the increased participation in social safety net programs. Unless we take action to address this crisis, successful businesses will underperform or fail, workers will lose jobs or be forced into poverty, and retirees will lose pensions and be forced back into the workforce.
Let’s do the right thing. Let’s pass this bill.