The Pension Accountability Act

In the last days of 2014, Congress passed the Multiemployer Pension Reform Act of 2014 (MPRA) as part of a year-end budget compromise. As a result of MPRA’s enactment, for the first time in 40 years multiemployer pension plan trustees have been given the authority to cut already earned retiree pension benefits while a plan is still solvent.

MPRA requires that all participants in the plan be given the opportunity to cast a vote to accept or reject the cuts proposed by their plan. However, the voting process has two significant shortcomings.

1. Votes are not counted fairly. Ballots that are not returned will be automatically counted as votes in favor of benefit cuts.
2. The vote is non-binding for large plans. If a plan is large enough that the Treasury Department determines it qualifies as a “systemically important plan,” the Department can overrule the legitimate vote of its participants and allow the proposed cuts to go forward. 

The Pension Accountability Act (S. 2147) would reverse both of these provisions. First, S. 2147 would prevent unreturned ballots from being counted as a “yes” vote; only returned ballots would be counted, thus restoring fairness to the voting process. Second, the bill makes the participant vote binding in all situations, regardless of the size of the plan involved. This will give workers and retirees a seat at the table to influence the decisions made about the future of their pension plans. 

The Pension Accountability Act was introduced in the U.S. Senate by Senator Rob Portman (R-Ohio) on October 7, 2015, and was referred to the Senate Health, Education, Labor and Pensions Committee. On November 17, 2015, Rep. David Joyce (R-Ohio) introduced a companion bill, H.R. 4029, in the U.S. House of Representatives. 

Senate co-sponsors