There seems to be some thawing in the negotiating stances of both Republican and Democratic representatives tasked with creating a viable solution to the unfolding multiemployer pension crisis. As everyone who reads this blog knows, we have long been huge supporters of the Butch Lewis Act legislation (BLA) that was passed by the House with bipartisan support in July 2019. Regrettably, the US senate, under Republican control, has failed to advance that legislation. Isn’t it funny how a hotly contested election can get the attention of these politicians, especially when many of the important battleground states are populated with participants from these struggling plans?
I remain hopeful (maybe naively) that these plans can get the loans necessary to meet the promised benefits without having to face benefit cuts and insurance premium increases. Benefit cuts would be hugely unfair given that the participants often deferred salary increases to support their retirement programs, while doing nothing to put these plans in the precarious position that they are in today. The thought of dramatically increasing PBGC premiums seems really silly, as these plans are already struggling to meet their current funding needs. Increasing the cost on these plans makes little sense, but it also doesn’t make sense to penalize healthier plans, too, which is also part of the Republican’s plan.
The great work by Cheiron (actuarial firm) that highlighted the effectiveness of the BLA legislation in stabilizing the funded status and contribution expenses of the Critical and Declining plans (now about 130) showed that all but three of the plans would be able to repay the loan after 30 years, the on-going interest payments, and the future liabilities of the plan. Why Republican Senators feel that pensioners shouldn’t get the full benefit that was promised is beyond me.
With so much at stake in the upcoming election, perhaps we can finally get some rationality prevailing. The roughly 1.4 million Americans that would be negatively impacted by the failure to create a viable solution might just be joined by the nearly 9.5 million union workers in “healthier” plans to create a voting block in places like Michigan, Ohio, and Wisconsin, as well as others, that just might decide who occupies the White House for the next four years. It is really too bad that it took this long to get representatives from both parties to the table, but it is better late than never. Let’s hope that they do the right thing!