Prospects Brighten for Much Needed Pension Rescue Bill as It Heads to House Floor Vote

Prospects Brighten for Much Needed Pension Rescue Bill as It Heads to House Floor Vote

By David Brandolph

The House Ways and Means Committee significantly boosted the prospect for passage of much needed pension relief that would protect the hard-earned and promised benefits of active and retired truck drivers, nurses and health care workers, plumbers and construction trade workers – people who we now recognize and honor as America’s essential workers in this time of crisis.

On February 12, the Committee “marked up” and voted in favor of the Butch Lewis Emergency Pension Plan Relief Act of 2021, legislation that would not only protect retirees’ pensions from devastating cuts, but also would stabilize their financially struggling plans while keeping intact the federal Pension Benefit Guaranty Corporation’s (PBGC) insurance program that backstops their benefits. The Butch Lewis Act is part of a Covid-relief package that is slated for a full House vote by the end of February. Then the bill will head to the Senate for consideration. The legislative process being used, known as “reconciliation,” is designed to pass the Senate with only 51 votes or, alternatively, a simple majority. Butch Lewis will have to meet certain technical criteria to be included, but we are hopeful for the bill’s passage.

The Pension Rights Center wrote a letter to the Committee in strong support of the Butch Lewis Act saying that “the relief is long overdue and must be passed now.” We also pointed out that as businesses and shopping areas have been shuttered, “retirees with pensions …continue to use their income to support local businesses, boost tax revenue and help reduce the strain that would otherwise fall on community medical and social service resources.”

PRC is one of dozens of organizations, businesses and unions supporting the bill, including the AFL-CIO, the National Association of Manufacturers, United Steelworkers, UPS, International Association of Machinists and Aerospace Workers, ERISA Industry Committee, the Retirement Security Coalition, the Alliance for Retired Americans, the International Brotherhood of Teamsters, the National Coordinating Committee for Multiemployer Plans, Spangler Candy Company, Associated Wholesale Grocers, Kellogg Company, Schnuck Markets, and many others.

Given the level of support, and the importance of the issue being solved, we were disappointed by the Washington Post’s February 17 editorial that was critical of multiemployer relief being included in the Covid relief package.

In fact, Covid-relief legislation is exactly where multiemployer reform belongs.

Multiemployer plans have been clobbered by the pandemic just as much as other parts of the economy. Even before last spring’s lockdowns, 124 multiemployer plans were facing insolvency – with some huge plans, like the Central States pension fund, about to implode in the next few years. Consequently, about 1.5 million plan members and their spouses face draconian cuts to their benefits.

The pandemic has severely exacerbated the crisis, placing even financially stable plans at increased risk. According to a report by Segal, an additional 180 plans could face insolvency due to the pandemic, bringing the number of plans careening toward failure “to over 300,” potentially affecting “over 2.5 million workers, retirees and beneficiaries.”

The Butch Lewis Act provides a commonsense and straightforward way to address the multiemployer crisis and avert another economic catastrophe. The bill would provide special financial assistance to troubled multiemployer plans meeting certain eligibility criteria to ensure that they can survive into the future and continue paying workers’ and retirees’ benefits. The bill would also accomplish one of the PRC’s top priorities by enabling eligible multiemployer plans to restore benefits they previously cut under the Multiemployer Pension Reform Act.