The Joint Select Committee on Solvency of Multiemployer Pension Plans has been meeting since April. They were tasked with producing bi-partisan legislation to help protect and preserve the defined benefit plans for the 114 (now 121) “critical and declining” multiemployer pension systems. As we’ve mentioned in multiple blog posts, the committee consisted of 8 senators and 8 congressmen with equal representation among Democrats and Republicans.
There were several proposals that were reviewed including the Butch Lewis Act (BLA) legislation that had been filed with Congress in November 2017. The BLA had strong support among the Democratic members of the committee but lacked similar support from the Republican side. Unfortunately, this process is getting down to the wire with the November 30th deadline fast approaching. Without support from a minimum of 5 Republicans and 5 Democrats, there will not be legislation put forward for consideration during this Congressional session.
It will be truly unfortunate if nothing comes from this Joint Select Committee because as they debate the merits of any proposed legislation, the number of critical and declining plans is expanding and the need for government support is growing, too, in both urgency and magnitude! The markets and normal contributions will not save these pension systems. Only through the support of the federal government will these plans survive. More than one million Americans are counting on Congress to do something!
As we’ve mentioned before. The BLA is proposing a loan program, which includes a relatively small sum of federal assistance through the PBGC for a few plans. These loans will be paid back in 30 years. This is not a government bailout. By extending the life of many of these troubled plans, we are eliminating the need for the US government to expand the social safety net that would have to be used to support those participants who would be losing a substantial percentage of their monthly benefit. Furthermore, it keeps them as active participants in our economy supporting both business and the government through additional tax revenue. It is a win-win!
If nothing comes from the JSC that can be supported by the two parties, a battle will have been lost, but the war will rage on. A war that has lasted much longer than it should have given the consequences that will result from the failure to legislate positive reform. It is increasingly imperative that members of both parties and both chambers of Congress hear from you regarding the need to support legislation to repair and protect these critical retirement plans.