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Three Cheers for Congressional Committee’s Vote That Paves Way for Bill Stabilizing Financially Struggling Pension Plans

For Immediate ReleaseContact: Karen Friedman, 202-296-3777
July 10, 2019www.pensionrights.org

The House Ways and Means Committee took a significant step today toward resolving a pending national retirement crisis affecting millions of workers and retirees. It did this by voting in favor of a bill that would provide a lifeline to financially teetering pension plans in the form of government backed loans.

The committee’s 25 to 17 party line vote during a markup session, joining a similarly favorable vote last month by the House Education and Labor Committee, moves the Rehabilitation for Multiemployer Pensions Act of 2019 (better known as the Butch Lewis Act) out of the committee and on the path to the House floor for a full vote. The bill offers an innovative way to save from insolvency about 130 financially troubled multiemployer pension plans, which are negotiated by a union and at least two employers, while fully protecting the earned benefits of hundreds of thousands of retirees.

The Pension Rights Center, a 43-year-old national consumer organization committed to the protection of retirement security for workers and retirees, supports the bill and is urging passage in both the House and Senate. 

In a letter sent to the committee on July 9, Karen Friedman, the Center’s Executive Vice President and Policy Director, told committee members that:

“The Rehabilitation of Multiemployer Pensions Act provides a sensible, common sense way of shoring up funding in critical and declining multiemployer plans. The bill would provide loans and other assistance to these severely underfunded plans to enable them to protect retirees’ earned benefits, while providing plans with sufficient time to recover their losses and repay their loans. We especially commend the bill for ensuring that those plans that have already received approval from the Treasury to cut retirees’ benefits must apply for financial support and restoration of previously suspended benefits.”

For the past five years, thousands of employees and retirees across the country have advocated for the repeal of provisions of the Multiemployer Pension Reform Act of 2014 (MPRA), which eviscerated fundamental provisions of the Employee Retirement Income Security Act of 1974.  MPRA allows trustees of multiemployer plans to cut retirees’ earned benefits as a misguided way to improve the funding of these plans. Since its passage, MPRA has led to devastating pension reductions—sometimes in excess of 60 percent—for tens of thousands of retired members and their spouses and widows in 14 pension plans.

Culmination of Long Fight

Seeing the bill gaining momentum in Congress is gratifying to the thousands of retired truck drivers, ironworkers, bakery workers, musicians, clerical workers and others who for years have been pleading with Congress to protect them from losing the hard-earned pensions that they procured during numerous collective bargaining negotiations in which they agreed to receive pension contributions instead of taking wage increases.

“Without a comprehensive alternative plan to save the multiemployer system, plan participants and their spouses will face drastic reductions in their benefits. This would devastate families across the country and businesses in their communities that rely on retirees with pension income to buy their goods and services,” Friedman said after the committee markup.

In his opening statement, Ways and Means Committee Chairman Congressman Richard Neal (D-MA), who introduced the legislation, noted that Republicans who have been critical of aspects of the bill have failed to offer an alternative solution despite spending nearly all of 2018 working on the issue with Democrats as part of the Joint Select Committee on Solvency of Multiemployer Pensions, which was tasked by Congress to resolve the crisis.

“The bill permits plans to borrow money. It’s not a bailout,” Neil said in response to criticism from Republican members of the committee.

Congressman Brian Higgins (D-NY) pointed out during the markup that the Congressional Budget Office has estimated that the bill will cost $32 billion while saving the government more than $150 billion.

“After many years of talking about a solution, Congress is finally taking action,” Neal said. The bill “is the only game in town, and is a winning one,” he added.

For further information, contact Karen Friedman at 202-296-3777 or call her cell at 202-320-6518.

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