Retirees desperate for pension fund bailout
hundreds of thousands of other retired Teamsters union members relying on Central States share his concern. All of them contributed to Central States for years with the understanding that the pension fund would see them through retirement.
Politicians, economists and actuaries agree that without a bailout, dozens of underfunded pension plans could ruin millions of Americans’ retirement.
“This is about workingclass families,” said Rep. Pete Stauber of Minnesota, who broke ranks with most of his Republican colleagues to vote for the House bill. “When I look into the eyes of people who could have their pensions reduced 50, 60 or 70%, it is unconscionable.”
Yet no one seems sure if the Senate will take up the issue any time soon, much less vote on it. A multiemployer pension reform bill nearly identical to the House bill has been introduced in the Senate and referred to the Finance Committee. It will not receive a hearing until at least September because of Congress’ traditional August recess.
A spokesman for Senate Majority Leader Mitch Mcconnell did not respond to a request for comment on the Senate legislation.
Democratic Sen. Tina Smith of Minnesota warned that a solution gets only more expensive with procrastination.
Smith says problems for multiemployer pensions — which are single pension plans for workers employed by different companies — were made worse by deregulation in the trucking industry and the Great Recession, coupled with plummeting union membership.
Central States, the biggest failing fund with 400,000 participants, says it now pays out $3.49 in benefits for every $1 it takes in. Without changes, it will be bankrupt in 2025. Currently, 201 of the nation’s roughly 1,400 multiemployer pensions are either out of money or considered critically underfunded.
“This is a ‘pay me now or pay me later’ kind of problem,” Smith explained. “It doesn’t go away if you ignore it.”
The Congressional Budget Office has estimated that the House legislation would cost $48 billion over the next decade, through a variety of loans and grants, with the expectation the funds gradually get back their financial footing.
Republican Rep. Jim Hagedorn of Minnesota, who voted against the bailout in the lower chamber, summed up GOP concerns, saying he’d rather draft a compromise bill.
“I have met many times with retired workers whose pensions were mismanaged, and I have concern for their plight,” Hagedorn said in a statement to the Star Tribune. “While I am supportive of a solution to address this issue in a fair manner, the bill offered for a vote on the House floor by liberal Democrats was fiscally irresponsible to taxpayers.”