US Sens. Sherrod Brown, D-Ohio, and Gary Peters, D-Michigan, are calling on House Speaker Nancy Pelosi, D-California, to include relief for multiemployer pension plans in any future stimulus package related to the COVID-19 pandemic. While the senators are likely to get support from the House leader, they may find it more difficult convincing members of their own chamber, particularly Senate Majority Leader Mitch McConnell, R-Kentucky.
“As you work to advance legislation combatting (sic) the coronavirus pandemic and its devastating economic impact, we urge you to include robust relief for multiemployer pension plans in the next earliest package,” Brown and Peters wrote in a letter to Pelosi. “Addressing multiemployer pension insolvency is an integral part of remedying the economic impact of this epidemic and it must be done without sacrificing workers’ hard-earned benefits.”
The senators asked that Pelosi include a proposal based on a policy framework that has bipartisan support and protects both plan solvency and benefits earned by retirees. According to benefits and human resources consulting firm Segal, approximately 130 plans covering more than 1.4 million workers, retirees, and beneficiaries were projected to become insolvent prior to the COVID-19 pandemic.
And the Pension Benefit Guaranty Corporation (PBGC)’s multiemployer insurance program, which is the lifeboat for struggling pensions, is itself projected to become insolvent in 2025.
“The current COVID-19 crisis will no doubt exacerbate the challenges already facing the multiemployer pension system and the people who rely on it,” Segal executives wrote in a letter to congressional leaders in April. “Without congressional action, these insolvencies will result in hard-earned pensions being cut to pennies on the dollar, which would in turn have catastrophic economic effects, both locally and nationally.”
Pelosi has previously expressed support for legislation to help struggling multiemployer pension plans. Last July, she made a speech on the House floor in support of the Butch Lewis Act, a bipartisan bill that aims to prevent the collapse of the nation’s multiemployer pension plans. The bill passed the House but has yet to be passed in the Senate.
“I urge a strong, bipartisan vote to protect the pensions of workers and retirees and I urge Senator McConnell to immediately take up this bill so we can send it to the president’s desk and give comfort to so many families in America,” Pelosi said in her speech.
However, McConnell has yet to put the Butch Lewis Act up for a vote, and recently expressed his unwillingness to include any kind of pension reform in congressional packages intended to help with the economic effects of the pandemic.
“We’ll certainly insist that anything we’d borrow to send down to the states is not spent on solving problems that they created for themselves over the years with their pension programs,” McConnell said in an April 22 radio interview with conservative pundit Hugh Hewitt. “There’s not going to be any desire on the Republican side to bail out state pensions by borrowing money from future generations.”
McConnell’s home state of Kentucky is consistently among the states with the worst funded public pensions. The Kentucky Employees Retirement System (ERS), for example, has a funded ratio of only 16%.
“The current economic downturn puts these plans at increased risk for failure,” wrote Brown and Peters. “These retirees and workers who have done everything right did not cause this crisis, and Congress must not turn its back on them.”