Senators Try, Try Again to Fix Pension Funds - ABI

Senate Republicans unveiled a plan yesterday to stabilize the failing pensions of 1.3 million miners, truckers, and other workers and retirees, setting the stage for a battle with House Democrats, who approved their own version of a fix over the summer, the Wall Street Journal reported. The workers and retirees belong to what are known as multiemployer pension funds, which are governed by collective bargaining agreements between a group of employers and a union. The most troubled plans are an estimated $100 billion short of what they need to pay out promised benefits — and the government insurance plan that backstops them is expected to run out of money by 2025. The new proposal by Sens. Chuck Grassley and Lamar Alexander would pave the way for the Pension Benefit Guaranty Corp., the government’s pension insurer, to take over a portion of some troubled plans’ liabilities, according to documents shared by Sen. Grassley’s and Sen. Alexander’s offices. The plans eligible for takeover would include two plans serving truckers and mine workers that are on the verge of running out of money. Following the takeovers, retirees would continue to receive benefits, but they would be cut by 10 percent, the documents show. The bill passed by House Democrats differs in that it would offer direct aid to the troubled plans in the form of forgivable loans. The Congressional Budget Office pegged the total price tag for the package at $48.5 billion but said it was difficult to predict the cost because it wasn’t clear under what circumstances the loans could be forgiven. ABI

Back to News »