Last July, American workers in failing multiemployer pension plans, also know as Critical and Declining (C&D) plans, got bi-partisan support from the House of Representatives when they approved H.R. 397. The bill went to the Senate at that time where it continues to reside. Is it on life-support? Melanie Waddell reported for ThinkAdvisor on a recent interview with Congressman Richard Neal (D, MA) in which the Congressman states, “Improving Americans’ retirement security remains a top priority of mine in 2020.” Neal also stated, “Last year, the House passed my Rehabilitation for Multiemployer Pensions Act — also known as the Butch Lewis Act — and I intend to do all I can to make sure the Senate passes that critical bill during this Congress as well.”
Let’s hope that he can get this done and sooner rather than later. As we reported earlier this year, the folks at Cheiron have estimated that each monthly delay increases the cost to “fix” this problem by $750 million! The Grassley and Alexander counter proposal to the Butch Lewis Act (BLA) , which was floated in November 2019, is too draconian (in my humble opinion) to even be considered by organized labor. Regrettably, the BLA does not currently have support from Senate Republicans to move this critical legislation forward.
We would prefer to see a legislative proposal that keeps these critically important DB plans alive and not be left to fail only to then have the PBGC step in to “save” a percentage of the promised benefits after their collapse. One criticism of the BLA is that some of the C&D plans receiving low-interest loans from the proposed Pension Rehabilitation Administration (PRA) would not be able to pay back the loan in thirty years. Why is that a problem? By providing the loans to these troubled plans, participants would get another 30-years of the promised benefits that would further help local economies and produce tax revenue at the state and federal levels that dwarfs the estimated cost of the program. Furthermore, aren’t debts renegotiated all the time? Why should these borrowers be treated any differently?