Congress still faces a pension problem to solve
IN February, Congress created a joint select committee to craft a way forward for the country’s troubled multi-employer pension plans. The panel even received a deadline. Unfortunately, on Nov. 30, that date passed without the committee completing the job. Neither is it likely lawmakers will get there this month, attention now turning to the new year and a new congressional session.
What deserves emphasis, again, is this isn’t a problem that can be left to fester or remain unaddressed. The well-being of too many retirees, and their communities, are at risk. In addition, the longer lawmakers wait, the more costly the solution.
So, the hope is that the two co-chairmen, Sens. Sherrod Brown, D-Ohio, and Orrin Hatch, R-Utah, are right about the committee having made “meaningful progress toward a bipartisan proposal.” It would be a shame to see any momentum lost, let alone another year slip past.
The sound idea of multiemployer pensions dates to the 1940s. It allows smaller companies to band together, knowing their workers experience frequent job changes in such sectors as construction and trucking. Of the roughly 1,400 plans nationwide, some 200 face financial jeopardy. As a result, about 1.3 million workers and retirees are looking at losing their pensions the next decade.
The trouble for the plans stems largely from the Great Recession, related companies hit hard, even going out of business, unable to meet their obligations. Put another way, the workers and retirees have done nothing wrong. They have followed the rules, contributing to their retirement plans.
Ordinarily, the federal Pension Benefit Guarantee Corp. would provide a safety net. Yet it has its own serious financial problems. Add the burden of the multiemployer plans, and it would all but collapse, analysts warn, leaving widespread ruin, or another outcome that rates as unacceptable.
Brown has put on the table a reasonable and responsible approach. The Butch Lewis Act (named for a late trucker and Vietnam veteran who devoted himself to this cause) would provide a 30-year, low-interest loan to the pension plans, permitting time to chart a secure path forward. Concerns about the expense eased in September when the Congressional Budget Office projected a cost of $34 billion for the decade, far less than the estimated tab for making the PBGC whole.
Critics have cautioned against a “bailout.” Yet the legislation is really about providing a bridge to a better place — at the least cost. Which gets to the hard truth: The Brown proposal outpaces the alternatives. If it can be improved, it belongs as the framework for dealing with the problem.
There isn’t an excuse for failing to act early in the new year. If bailing out the banks was driven by “too big to fail,” this rescue is about viewing these pension plans as too important to fail. Events have conspired against workers and retirees, their households and communities. Now the federal government has a duty to see they are protected.