Opinion: Bipartisan bill can deliver on pension promise
The struggle to ensure the retirements of millions of hardworking Americans continues. But the reintroduction of essential bipartisan legislation by a long-time pension protector could go a long way toward bolstering nest eggs jeopardized under the current system.
With the new Congress now seated in Washington, the Teamsters want to let lawmakers know it is time to work together across party lines to secure the hard-earned retirements of retirees and workers. These hardworking Americans deserve to receive the benefits they were promised.
Fortunately, the Rehabilitation of Multiemployer Pensions Act would solve the problem. Introduced by Reps. Richard Neal (D-Mass.) and Peter King (R-N.Y.) last month and co-sponsored by Reps. Debbie Dingell (D-Mich.) and Bill Huizenga (R-Mich.), the bill is a continuation of an effort to reform the system that first began in 2015. The seven House Republican co-sponsors understand the value of the bill and should be lauded for supporting this legislation.
There’s no time to lose. There are about 1.5 million retirees in desperate need of quick action to save the retirement nest eggs they spent decades contributing to on the premise they would be financially secure in their golden years. There also are hundreds of thousands of workers who are enrolled in these pension plans who deserve assistance, too.
As it stands, there are more than 300 multiemployer plans across the country — including the Teamsters’ Central States Pension Fund — that are in danger of failing. Congress needs to find a solution that will deliver for these hardworking Americans who are paying, or have paid, into the pension pool and have played by the rules all their lives.
The measure would boost financially-troubled multiemployer pensions so they don’t fail. It would create an agency under the Treasury Department that would sell bonds in the open market to large investors such as financial firms.
The agency, the Pension Rehabilitation Administration (PRA), would then lend money from the sale of the bonds to the financially-troubled pension plans. Plans that are deemed “critical and declining,” as well as recently insolvent but non-terminated plans, and those that have suspended benefits would be eligible to apply for the program.
Pension plans borrowing from PRA would be required to set aside the loan proceeds in separate, safe investments such as annuities or bonds that match the pension payments for retirees. For those plans needing additional help to meet retiree obligations, the Pension Benefit Guaranty Corporation would be available to make up the difference.
As of now, the Central States fund is facing an unfunded liability of $17.2 billion, the largest of all multiemployer plan shortfalls. The Bakery and Confectionary Union pension is second with a $3.2 billion shortfall, while the United Mine Workers are third at $2.4 billion. Other threatened multiemployer plans face a total shortfall of $13.6 billion. That’s why the Teamsters are stressing the importance of Congress coming up with a solution as soon as possible.
Workers and retirees aren’t asking for a handout; they just want what is rightfully theirs. The Teamsters urge those on Capitol Hill to work together and pass a bipartisan solution that will make workers and retirees whole. They’ve waited long enough.
James Hoffa is president of the Teamsters.
Labor Voices columns are written on a rotating basis by United Auto Workers President Gary Jones, Teamsters President James Hoffa, Michigan AFL-CIO President Ron Bieber and Michigan Education Association President Paula Herbart.