Sen. Sherrod Brown, D-Ohio, said during a hearing of the Joint Select Committee on the Solvency of Multiemployer Pension Plans that any proposal emanating from this body must address both the pension plans (1.3 million participants in failing plans) and the Pension Benefit Guaranty Corporation or the current crisis will only be repeated. We couldn’t agree more!
We are particularly pleased to read the comments from Sen. Rob Portman, a Republican on the panel, who said that if the PBGC fails, retirees from plans like the Central States, who are already facing the prospect of pensions cuts, would see reductions of about 90 percent if the PBGC becomes insolvent.
The potential loss of the pension benefits doesn’t only impact the recipient, but the broader economy. It is estimated that more than $1 trillion in economic activity was generated by the recipients of benefits from the 114 “Critical and Declining” systems in the last year. In addition, there are more than 200 plans designated Critical. I wonder what the economic impact would be should those plans fail.