Without Congressional Action, The Retirement Benefits Of 1.5 Million Pension Plan Participants Across The Country Could Be At Risk
Washington, D.C. – Senate and House Democrats today unveiled the latest tenet of their economic agenda, “A Better Deal,” which would ensure the pensions that American workers have earned over a lifetime of work are safeguarded and protected into the future. The Democrats’ “Better Deal to Save Our Pensions” proposal includes new legislation to ensure Teamsters, miners, and thousands of other American workers can keep the retirement they have earned so their families and livelihoods are not put at risk.
Specifically, the Democrats are introducing legislation that would allow the Treasury Department to loan money, leveraged by safe investments, to pension plans to ensure that retirees and their families are guaranteed their promised benefits. This new legislation would put the pension plans back on solid footing, ensure they can meet their obligations to current retirees and workers for decades to come without cutting the benefits retirees earned, and safeguard them for the future. During the press conference, Democrats called for this fix to be passed by the end of this year.
Pension plans – including the massive Central States Teamsters Pension Plan, the United Mine Workers Pension Plan, and over 200 more plans impacting workers in every state in the country – are on the brink of failure and threatened by massive cuts. If nothing is done, these 200 multiemployer plans are projected to fail, many within the next 10 years. The result of significant cuts to these pensions would be economically devastating, as the retirement benefits of 1.5 million plan participants could be at risk. In 2015, multiemployer participants were paid $241 billion in wages and pension benefits and those participants paid over $35 billion in federal taxes and an additional $8.4 billion in state and local taxes.
If pension plans are allowed to fail, not only will employers no longer be able to pay promised benefits, but taxpayers would be at risk of having to pay billions when the Pension Benefit Guarantee Corporation (PBGC), the government sponsored insurance company for multiemployer pensions, has an exposure of $59 billion and is projected to become insolvent by 2025. The Congressional Budget Office estimates that the cost of backstopping the PBGC, should it fail, would be $101 billion dollars over 20 years. The Democrats therefore said these workers, retirees, families and communities are at risk through no fault of their own and must be protected.
To address this serious problem, the Democrats’ unveiled their “Better Deal to Save Our Pensions” proposal, which would:
Read the full “Better Deal to Save Our Pensions” plan here.
Senate Democratic Leader Chuck Schumer (D-NY) said, “Democrats are offering hard-working Americans across the country a better deal to protect their pensions, because the families of our ironworkers, truck drivers, steelworkers, and many more deserve a secure and bright future. This new proposal is a priority for Democrats.”
House Democratic Leader Nancy Pelosi (D-CA) said, “Democrats are committed to defending the dignity of a secure retirement for millions of hardworking Americans. Across the nation, families are worried about what pension fund insolvency and life-threatening cuts will mean to their economic security. Today, Democrats are unveiling the newest legislation in our Better Deal Agenda to strengthen the retirement security of workers and guarantee the full benefits workers have earned over a lifetime of hard work.”
Senator Sherrod Brown (D-OH), Ranking Member, Senate Banking Committee, said, “It’s bad enough that Wall Street squandered workers’ money – and it’s worse that the government that’s supposed to look out for these folks is trying to break the promise made to these workers. We won’t allow that to happen.”
Representative Richard Neal (D-MA), Ranking Member, House Ways & Means Committee, said, “Americans who worked hard their entire lives and planned for secure retirements should not have the rug pulled out from under them. With this bill, we responsibly shore up multiemployer pension plans and guarantee retirees the full benefits they earned. In previous times of crisis, the federal government has stepped in to assist savings and loans associations and Wall Street firms – now it’s time to do the same for American workers.”
Representative Bobby Scott (D-VA), Ranking Member, Committee on Education and the Workforce, said, “The multiemployer pension system remains in significant financial distress, threatening the retirement security of millions of Americans. I am pleased to support Congressman Neal’s Rehabilitation for Multiemployer Pensions Act. This bill proposes a solution to prevent troubled multiemployer plans from failing and safeguard retirees’ hard-earned pensions. In the weeks ahead, Congress must work together on a bipartisan basis to responsibly address the multiemployer pension crisis. Millions of workers, families, and retirees are counting on us — and the longer Congress waits to act, the more difficult and more expensive the problem will be to solve.”
Senator Tammy Baldwin (D-WI) said, “I am proud to be signed on to the Butch Lewis Act with Senator Brown and my colleagues. This important legislation keeps our promise to workers and retirees, and fixes failing pensions, so today’s retirees can count on the pensions they have earned and workers can count on their pensions in the future.”
Representative Cheri Bustos (D-IL) said, “There are thousands of responsible men and women across the Heartland who spent years on the job and saved for their retirement only to have the rug pulled out from underneath them. They did the right thing every step along the way, but they’ve gotten a raw deal. Today we are offering them a better deal to ensure these hardworking Americans can have the secure retirement they paid for and earned. On this day when Washington Republicans are forcing a vote to raise taxes on millions of middle-class families to give tax breaks to billionaires, we are proud to continue fighting for working families.”