By Karen Friedman
If Congress and the Joint Select Committee on the Solvency of Multiemployer Plans need any further proof that they should act to solve the multiemployer crisis, all they need to do is read the latest report from the Pension Benefit Guaranty Corporation (PBGC).
The PBGC’s 2017 Projections Report shows that the financial condition of the agency’s multiemployer insurance program is worsening, and the program could become insolvent before the end of 2025, based on economic modeling that the agency has done. According to the report, approximately 130 multiemployer plans covering 1.3 million people are expected to run out of money over the next 20 years.
The Pension Rights Center is urging Congress to act quickly to address the problems. The Center believes that any solution to solve the multiemployer system should include the following features: (a) a repeal of the cut-back provisions of the Multiemployer Pension Reform Act (MPRA); (b) a federal loan program that will allow troubled multiemployer plans to regain their financial footing; (c) protection of retiree and workers’ benefits; (d) shoring up the Pension Benefit Guaranty Corporation for today and tomorrow .
It is troubling that 19 pension plans have already applied to cut their retiree benefits under MPRA. The Department of Treasury has already approved five of the applications and another five are still pending. And there could be a flood of applications and enormous benefit reductions if we do not repeal and replace MPRA. This would have a devastating impact on retirees and today’s workers, to their families, to their communities and to both local and the national economy.
Now is the time to transcend partisan politics and work together toward a fair solution.
Read the PBGC Press Release
Read the full PBGC Report