On Saving Pensions, One Step to Go, On Composites and GROW, We Say No!

On Saving Pensions, One Step to Go, On Composites and GROW, We Say No!

By Karen Friedman

PRC is thrilled that on May 15, as part of the latest COVID-19 relief bill (known as the HEROES Act), the House of Representatives passed the well-crafted Emergency Pension Plan Relief Act (EPPRA) to shore-up underfunded multiemployer pension plans. We urge the Senate to ensure that EPPRA’s provisions are retained in any compromise bill it works out with the House.

But before the next virus response bill is finalized, there are some pension-related provisions that must be dropped from the massive 1,800-page legislative tome – the poorly designed Giving Retirement Options to Workers Act (GROW Act).

PRC has worked with tens of thousands of retirees for the past six years to try to fix the insolvency fiasco facing at least 130 multiemployer plans, which are negotiated by a union and two or more employers. The House did its part by approving a fix for these underfunded plans. Will the Senate listen to retirees and rescue their pensions or will the retirees be betrayed and left empty-handed?

We are hoping that the Senate will show its wisdom by choosing the rescue.

By including EPPRA in the next COVID-19 legislation, Congress will preserve the full pensions of workers and retirees while stabilizing for decades to come the federal agency that insures our nation’s private pension plans, the Pension Benefit Guaranty Corporation (PBGC).

I can’t tell you the number of calls I get from retirees saying “Karen, I can’t take it much longer. We keep thinking that finally, finally this issue will be solved, but then Congress disappoints us.”

“Hundreds of thousands of retirees across the country, like me, are watching closely the vote of each member of Congress to see if they are for or against the rescue of our hard-earned promised pensions,” Kenny Stribling, a 68-year-old retired truck driver from Milwaukee said. Stribling promised his wife shortly before she died of pancreatic cancer that he wouldn’t give up the fight for the pension he earned during a 30-year career until a solution was found. He is vice president of the National United Committee to Protect Pensions, comprised primarily of retirees who belong to the collapsing 400,000-member Central States Pension Fund.

Steve Nathan, a 69-year-old pianist from Nashville who will lose 40% of his hard-earned pension unless there is a quick solution told PRC that, “We have waited and waited for Congress to act appropriately, and now COVID-19 has run out the clock. The Senate should join the House in passing the EPPRA now.  The longer they wait, the worse the situation will be.”

Given what’s at stake for so many people who worked hard, played by the rules and contributed so much to this country, I say to the Senate: Just do it! Negotiate with the House and pass EPPRA or come up with an equally fair and effective solution

PRC strongly supports EPPRA because it shores up underfunded plans by providing the PBGC with the funding to take on some of the liabilities of ailing plans. It involves a “partitioning” process that will ensure that the plans survive for the long-term and are able to pay in full the earned benefits owed to workers and retirees. The proposal also increases the guarantees paid by the PBGC when plans fail and would restore benefits to retirees who have already had their benefits cut because of the unfair provisions of the Multiemployer Pension Reform Act of 2014.

EPPRA shares a similar structure to a proposal advanced by Senate Finance Committee Chairman Charles Grassley (R-IA) and Senate Health, Education, Labor and Pensions Committee Chairman Lamar Alexander (R-TN).

As we’ve written before, the retirees and workers who are most at risk of losing pensions are the people who built – and continue to build – the country and make it great. They are also the ones we are relying on during lockdown — truck drivers, grocery workers, health care workers, ironworkers and the musicians who keep playing online or on their balconies to boost our spirits.

The Senate and House must pass provisions to help severely underfunded plans. But to protect the multiemployer system, Congress must also drop the GROW Act from the COVID-19 legislation.

Unlike EPPRA, which will strengthen failing multiemployer plans and protect workers, retirees and the PBGC, passage of the GROW Act would undermine the multiemployer plan system by weakening currently well-funded plans and creating new inferior “composite” plans that do not provide guaranteed benefits. It would also result in the underfunding of the PBGC.

PRC therefore urges the Senate to negotiate with the House and pass EPPRA while saying no to GROW. The GROW Act is also vigorously opposed by AARP, the Western Conference of Teamsters, the SEIU, IBEW, Steelworkers, Machinists, Boilermakers and other unions and organizations.

Last but not least, the center also cheers the House for including in the HEROES Act a provision that would provide grants to community-based organizations to help low-income divorced women and survivors of domestic abuse receive their court-awarded retirement benefits. This provision was originally introduced by Senator Patty Murray (D-WA) and House Members Jan Schakowksy (D-IL) and Lauren Underwood (D-IL) as part of the Women’s Retirement Protection Act (S.975, H.R. 2005).