By Karen Friedman
On Wednesday, at the first hearing (and second public meeting) of the Joint Select Committee on Solvency of Multiemployer Pension Plans, one fact became abundantly clear: the problem of multiemployer plans is complex and finding a solution to the issue is also going to be a challenge. But there was a general acknowledgement from members, from both sides of the aisle, that they had to work together to do something.
The two-hour hearing started with statements by the Joint Select Committee’s co-chairs Senator Orrin Hatch (R-UT) and Senator Sherrod Brown (D-OH) who said that this hearing was meant to be educational, setting the context for the Joint Select Committee to do its work by understanding the magnitude of the issue. Senator Brown emphasized that the problem will only get “more expensive to fix the longer we wait.” You can read Senator Hatch’s full opening statement here, and Senator Brown’s full statement here.
The first witness was Thomas Barthold, Chief of Staff of the Joint Committee on Taxation, who discussed the legal history of the multiemployer system and generally described the structure of the plans and how they work. Ted Goldman, Senior Pension Fellow with the American Academy of Actuaries, then discussed the benefits of pooling in multiemployer defined benefit plans and explained how at least 100 of the 1,400 multiemployer plans are projected to run out of money in 20 years – and how these failures would also topple the Pension Benefit Guaranty Corporation.
The witnesses then answered questions from the Joint Select Committee members. Some probed into the reasons for plan failures; some wanted to know whether loan programs would work; some wanted assurances that if they acted to solve this problem it wouldn’t get any worse; and some wondered about the impact on the more than 1.5 million workers and retirees who would be affected as well as the impact on small employers. The witnesses stuck to the facts and both said they weren’t in a position to discuss solutions; however, both would be willing to help with objective analysis and technical assistance.
You can watch a video of the full hearing here.
In addition to Wednesday’s hearing, the Committee announced that they are seeking input from stakeholders on this issue. They want to hear directly from the people affected by this crisis, whether they be workers, retirees, or businesses and you can tell them what solutions you think they should pursue. You can read about how to submit comments on the Committee website, here.
For more information on this issue:
Check out our fact sheet on Multiemployer Reform.
Read our blog post on the Committee’s first public meeting
Check out the Committee’s new website