Joint Select Committee on Solvency of Multiemployer Pension Plans Holds 1st Meeting
The Joint Select Committee on Solvency of Multiemployer Pension Plans, the bipartisan, bicameral body created by
the Bipartisan Budget Act to look for ways to improve the solvency of multiemployer plans, held its first meeting on March 14. It was an organizational business meeting to consider committee rules for the second session of the 115th Congress.
Committee Co-Chair Sen. Orrin Hatch (R-UT), in his opening statement at the meeting, said that the committee “confronts an enormous and difficult task. Multiemployer pension plans, like other retirement savings programs, have faced a number of challenges in recent years. Some of those challenges include a financial crisis, which has disturbed the investment returns of the multiemployer plans, as well as demographic and economic changes which have made the operations of a substantial number of these plans difficult, if not impossible, to sustain.”
“Many have argued,” Hatch said, “that these complexities have sent some of these plans into a ‘death spiral.’ As it stands, numerous plan participants, and the broader viability of these plans face challenges.” In addition, he noted,” the Pension Benefit Guarantee Corporation stands near the precipice of insolvency.”
“Retirement income is referred to by many as a three legged stool: Social Security, employer-sponsored retirement plans and personal savings,” said committee member Rep. Richard Neal (D-MA) in his opening statement. “Multiemployer pension plans are contributing to the wobbly three legged stools for many retirees because these plans are in crisis. About 10 million Americans participate in multiemployer plans and about 1.5 million of them are in plans that are quickly running out of money,” he added.
“It is critical that we address this crisis and help these retirees whose retirements are now at risk by no fault of their own,” Neal said. And that is what the committee is going to do, Hatch remarked: “This committee is tasked with studying the challenges multiemployer plans face, what has worked and what has not, reviewing potential solutions, and, if possible, developing legislative recommendations that could be considered by the House and the Senate.”
“Finding a solution requires a clear understanding of the issues these plans confront. Which means, at least for the next few weeks, we should be listening far more than talking,” Hatch said. “We are going to have to hear from all sides on this issue,” he pledged, noting, “During my lengthy experience in Congress, and in developing bipartisan solutions to problems, I have learned that the best path to take involves mutual respect and an open consideration of all views; even views you do not agree with.”
Neal also cited the Rehabilitation for Multiemployer Pensions Act
, a bill he introduced on Nov. 16, 2017
that calls for the creation of a Pension Rehabilitation Trust Fund and the establishment of a Pension Rehabilitation Administration within the Treasury Department to make loans to multiemployer defined benefit plans. He said that his bill “would address a big part of the problems with our retirement system — the multiemployer pension crisis.” Joint Committee Co-Chair Sen. Sherrod Brown (D-OH) on the same day introduced the Senate version of Neal’s bill, S. 2147 or the Butch Lewis Act of 2017
Speaker of the House Paul Ryan (R-WI) and House Minority Leader Nancy Pelosi (D-CA) on Feb. 23 each named
four members to the joint committee, including Neal. Three days later, Senate Minority Leader Chuck Schumer (D-NY) named four Senate Democrats
to the joint committee; on Feb. 27, Senate Majority Leader Mitch McConnell (R-KY) named four Senate Republicans.