The Teamsters have been working diligently for years with key members of Congress trying to come up with a solution to the multiemployer pension crisis that could hit tens of thousands of its members hard. And with the release of new legislation yesterday by Sen. Sherrod Brown (D-Ohio) and Rep. Richard Neal (D-Mass.), the union believes it has found it.
“You can’t fool around with retirement,” Neal told those gathered at a Capitol Hill press conference. “What we want is a path here to resolve this kind of issue. But what we have now is a vehicle.”
Brown called the introduction of the “Butch Lewis Act of 2017,” named after the former Teamsters Local 100 President who died in late 2015 while fighting to prevent cuts to the Teamsters’ Central States Pension Fund, one of the proudest days of his life. He said workers deserve to receive the pensions they worked so hard for to get.
“This bill is comprehensive. It includes the miners, the Teamsters and others,” he said. “It makes no cuts. We started with the ideas of no cuts and there will be no cuts. This is a plan that will work.”
The bill would boost financially troubled multiemployer pensions so they don’t fail. It would create a new agency under the U.S. Treasury Department that would sell bonds in the open market to large investors such as financial firms.
The agency, the Pension Rehabilitation Administration (PRA), would then lend money from the sale of the bonds to the financially troubled pension plans. Plans that are deemed “critical” and “declining,” as well as recently insolvent but non-terminated plans and those that have suspended benefits, would be eligible to apply for the program. For those plans needing additional help, the Pension Benefit Guaranty Corporation would be available to make up the difference.
Pension plans borrowing from PRA would be required to set aside money in separate safe investments such as annuities or bonds that match the pension payments for retirees. Those applying for loans to the PRA would also have to submit detailed financial projections. The PRA would be charged with approving all loans before they could be issued. Pension plans that have borrowed money would have to submit reports every three years to the PRA to show that the loans are working.
Rita Lewis, the widow of Butch Lewis for whom the bill is named, said the legislation has been a long-time coming but will go a long way to fix the problems many retirees are facing.
“We paid for our pensions through dedication for our employers while we created profit for them,” she said. “We have endured an excruciating four years waiting for a solution. But thanks to Sen. Brown and Congressman Neal, we have a sound solution.”