Former Senator Tom Coburn (R-Okla) recently penned an article for The Hill regarding the looming insolvency crisis facing the multiemployer pension system. He stated that the “stakes for this committee could not be higher”. We couldn’t agree more. Furthermore, “failure to safeguard the multiemployer system poses an unacceptable economic risk and cost not only to the millions of workers and their families who paid into these pension plans…but also to the American taxpayer.”
We, at KCS, have been worried about the profoundly negative social and economic implications of our failure to secure the U.S. retirement system since our founding in August 2011. According to Coburn’s article, the economic contribution from multiemployer plans in 2015 alone “provided $2.2 trillion in economic activity, supported 13.6 million American jobs, contributed more that $1 trillion to U.S. GDP, and paid $158 billion in federal taxes and $82 billion in state and local taxes.” A systematic failure would be devastating to our economy and the workers and their families.
For those that claim that a private, market-based system shouldn’t be “bailed out”, we say hogwash! We ask, is it better to rebuild the solvency in these funding-challenged pension systems, allowing them many additional years of viability, or have these millions of plan participants fall onto the U.S. social safety net? The cost of a pay-as-you-go social safety net is far greater than that of a well-funded (through loans) pension system providing the promised monthly benefits that these workers have contributed to throughout their careers.