Opinion: Protecting pension remains top priority
It is encouraging when elected officials can work across party lines to get things done. Take, for example, Michigan’s historic no-fault auto insurance reform bill signed into law by Gov. Gretchen Whitmer last week. After years of grappling with making changes to the 1973 law, Democrats and Republicans in the state worked together to take action that will result in a reduction in the nation’s highest auto insurance rates.
In Detroit, that means the average auto insurance cost that hovers around $5,000 a year will be reduced beginning next year. That’s a real win for motorists that will put much-needed money in their pocket.
Sadly, such bipartisanship is not more prevalent, even when the result would help a significant swath of people. Capitol Hill, in particular, is largely stuck and incapable of passing legislation that would make a real difference in the lives of working Americans.
But it doesn’t have to be that way. It is not too late for Congress to follow the lead of lawmakers in Michigan and back legislation on such things as pension reform that would help thousands of their constituents. It is clear this issue has supporters in both parties.
The Teamsters have been working for years to try to secure a solution that would beef up retirement security for some 1.5 million Americans whose nest eggs are jeopardized through no fault of their own. That includes having Teamster retirees and the spouses of Teamster retirees tell their stories to different House committees at hearings this year. This union supports H.R. 397, the Rehabilitation for Multiemployer Pensions Act, because it would protect the retirement futures of some 400,000 current and former Teamsters who paid into the Central States Pension Fund, including some 43,000 from Michigan. It is a bipartisan bill that is co-sponsored by six House members from Michigan.
As it stands, there are more than 300 multi-employer 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 multi-employer 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.
Congress needs to show a united front when it comes to standing up for working Americans who make up the backbone of this nation.
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.