Hoffa: Congress must step up to protect pensions
America’s retirement system has been undermined by Wall Street’s collapse seven years ago and poor government policy decisions in recent years. Rather than come up with creative plans to save the hard earned benefits of America's retirees, Congress instead passed a law last year that allows their pension benefits to be cut by as much as 30 percent. This would be devastating for those least able to take such a hit to their living standards. But there is a solution that doesn’t require retiree benefit cuts.
Sen. Bernie Sanders, I-Vermont, and Rep. Marcy Kaptur, D-Ohio, introduced legislation last month that would roll back provisions slipped into the fiscal 2015 spending bill approved on Capitol Hill last year that made earned pensions vulnerable to cuts. The measure would restore anti-cutback rules so that recipients in financially troubled multi-employer pension plans will be protected from having their benefits cut.
In addition, the legislation strengthens existing plans by allowing the partitioning off of plan participants and retirees whose employers have left pensions plans due to bankruptcy or closure. This will provide relief to participating employers from having to cover the benefits of these “orphan” participants and retirees.
The bill creates a legacy fund within the federal pension insurance program, the Pension Benefit Guaranty Corporation, to help ensure that participants who have been partitioned from their pension plans will continue to receive the benefits they have earned and depend on. And it would ensure that pension obligations are prioritized during company bankruptcies so workers’ futures aren’t cast aside.
The cost to cover these retirees and workers will be covered by closing tax loopholes used by the very wealthy. It would end the deferment of taxes employed in certain exchanges often involving expensive artwork. That has cost the taxpayers $11 billion over the last decade. It also restricts a tax gimmick that allows wealthy families to reduce estate and gift tax payments, which would raise another $18 billion over 10 years.
These dollars, which serve as handouts to the tippy-top of U.S. society already living in luxury, would go to much better use shoring up the retirement plans of hardworking Americans. Under the Multi-Employer Pension Act of 2014, which was passed without a vote on its merits by Congress as part of the appropriations process, workers are forced to bear reduced benefits while employers can opt out of pensions or close their doors and walk away from their responsibilities.
As it stands, more than 10 million Americans rely on multi-employer pension plans for their retirement security. For more than four decades, federal law prevented ongoing pension plans from unilaterally deciding to cut retirees’ promised benefits. But Congress violated that trust last year. Now the futures of some 1.5 million workers who are enrolled in about 200 retirement plans nationwide are imperiled. Workers should not be cast aside as an afterthought just because some lawmakers find it politically convenient.
Congress needs to come to the aid of America’s retirees. Government actions like deregulation, bad trade deals and bailing out the big banks have all played a role in the pension crisis. The solution to the problem lies with legislation like the Keep Our Pension Promises Act that will protect our retirees while also strengthening multi-employer pension plans.
James P. Hoffa is president of the International Brotherhood of Teamsters.
Labor Voices columns are written on a rotating basis by United Auto Workers President Dennis Williams, Teamsters President James Hoffa, Michigan AFL-CIO President Ron Bieber and Michigan Education Association President Steven Cook.