WASHINGTON – The Pension Rights Center released a statement today cautioning Congress against supporting a proposal that “endorses the unprecedented and dangerous step of empowering pension plan trustees … to slash benefits of men and women who are already in retirement and have no opportunity to replace lost benefits.” The statement, distributed at a hearing held by the House Subcommittee on Health, Education, Labor and Pensions, calls on Congress to “undertake a far more serious exploration of alternatives” to retiree benefit cuts as policymakers evaluate ways to shore up funding in deeply-troubled multiemployer plans.
The hearing, titled “Strengthening the Multiemployer Pension System: How Will Proposed Reforms Affect Employers, Workers, and Retirees?”, focused on proposals presented in the report, Solutions not Bailouts, put forward by the National Coordinating Committee on Multiemployer Plans. While the Center supports some of the report’s innovative ideas to shore up funding – including eliminating the 13th check in some industries and developing new plan designs for the future – it opposes giving multiemployer plan trustees unbridled authority to cut retiree benefits, undermining one of the most sacred principles of the federal private pension law. “Multiemployer plans should not balance their books on the backs of retirees.”
The Pension Rights Center believes that further study and evaluation of the problem is necessary before any proposal that cuts benefits to current retirees is considered. Among the Center’s suggested solutions: (1) identifying new revenues to improve troubled plans’ funding status that has been eroded because of unforeseen circumstances, such as the move away from coal to cleaner energy sources, and the deregulation of the trucking industry; (2) increasing the ability of the Pension Benefit Guaranty Corporation (PBGC) to help plans through partition and mergers; and (3) increasing PBGC’s premiums, both to strengthen its ability to meet its guarantee commitments and to increase guarantee levels for multiemployer plans.