There is a growing pension crisis in America. Anyone who’s been listening to the podcast has heard my guests talk about the 130 defined benefit plans in declining and critical status. To help put this human crisis into the proper perspective, that is one and a half million American workers and retirees through no fault of their own in plans projected to run out of money. Another 200 plans are in critical status but not declining. And the coronavirus pandemic threatens to push that number even higher.
When Jason Russell, a senior vice president and actuary at Segal Consulting, came on the podcast last year, he sounded the alarm of this crisis:
The ABCs of the Pension Crisis was created with clips from past shows. In addition to Jason Russell, my guests include retired chairman of Marco Consulting, Jack Marco; blogger, pension reform activist, and president of Ryan ALM, Russell Kamp; and John Elliot, a partner at New England Pension Consultants.
The American Rescue Plan
On March 11 of this year, President Biden signed pension reform legislation, The American Rescue Plan, passed by Congress into law, but what’s in it?
Pension reform first appeared before Congress in 2017 in the form of the Butch Lewis Act. Estil “Butch” Lewis was a Teamster president who fought tirelessly to protect workers and retirees from drastic cuts to their beleaguered Central States Pension Fund. Championed by Democrats, the original Butch Lewis Act proposed low-interest Federal loans to help bail out these troubled plans.
In November 2019, Senate Republicans proposed their own version of pension reform in a white paper called, The Multiemployer Pension Recapitalization and Reform Plan. Instead of low-interest loans, the Republican-backed plan increased the PBGC’s ability to partition out the worst liabilities so that the rest of the plan could remain solvent. However, the cost would be shouldered entirely by participants – a sticking point with the multiemployer community and unions. If you’d like to read the Senate white paper, click HERE, and the link will open a PDF provided by the Senate Finance Committee.
After Democrats won a majority in both chambers in the 2020 election, pension reform was re-introduced to the 117th Congress in the form of EPPRA, The Emergency Pension Relief Act of 2021. This version combined low-interest loans and increased the PBGC’s ability to partition liabilities of troubled plans. If you’d like to check out EPPRA, click HERE, and the link will open a PDF provided by the House Ways and Means Committee.
In February 2021, another version of the federally backed loans was introduced as The Butch Lewis Emergency Pension Plan Relief Act of 2021. Unfortunately, this version did not include increasing the PBGC’s ability to partition troubled plans. If you’d like to check out The Butch Lewis Emergency Pension Relief Act, click HERE, and the link will open a PDF provided by the House Ways and Means Committee.
I will be following this story as it develops on future podcasts. I hope to speak with experts about this legislation to help make sense of it; tell us what’s in the bill; what reforms didn’t get in; and whether or not MPRA regulations are being addressed.
About The World of Multiemployer Benefit Funds Podcast
Listen to the full podcast with Traci Dority-Shanklin on The ABCs of the Pension Crisis, click HERE
Full podcast episodes of The World of Multiemployer Benefit Funds with union and client advocate, Traci Dority-Shanklin, are available on Apple Podcasts or check out our full library on our website.
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