Industry Voices

Barry’s Pickings Online: Welcome to Trump-World

Michael Barry, president of the Plan Advisory Services Group, discusses how certain Trump priorities will affect retirement plans.

By PS | February 01, 2017
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PS-Portrait-Article-Barry-JCiardiello.jpgArt by J. CiardielloIt’s a commonplace that President Donald Trump is rewriting political conventions, advocating a number of policies, e.g., on trade, that are not “traditionally Republican.” How might his new priorities affect retirement policy? Consider two areas—the multiemployer plan crisis and paying for infrastructure spending.

The multiemployer plan crisis 

Most Republican policymakers have been notorious for their dislike of unions. So it was no surprise that in 2016 the majority of Republicans on the Senate Finance Committee opposed a bill—the Miners Protection Act—that would have bailed out the United Mineworkers Pension Plan, by transferring mine cleanup funds to it. Democrats on the committee, however, conditioned their support of a broader retirement policy bill sponsored by Chairman Hatch, R-Utah, on favorable committee action on the UMW bailout. And so, last September, six committee Republicans, along with all 12 Democrats, voted to favorably report out the UMW bailout bill.

Nevertheless, before the November election, few believed that the Miners Protection Act would get enough Republican support in the full Senate, and the House, to pass. And it was pulled from the 2016 Congress’s December continuing resolution.

It has now been reintroduced, in the 2017 Senate. And there are some significant Republican supporters, including Burr, R-North Carolina, Capito, R-West Virginia, Portman, R-Ohio, and Sullivan, R-Alaska.

What is President Trump’s view of this legislation? He seems to view labor as a potential ally, e.g., with respect to his infrastructure and pipeline proposals. Coal states—West Virginia, Pennsylvania and Ohio—were critical to his victory. And—in contrast to former Secretary of State Hillary Clinton—he took a vigorous pro-coal stand during the campaign.

More broadly, the UMW plan is one of two major multiemployer plans that threaten the solvency of the Pension Benefit Guaranty Corporation (PBGC) multiemployer insurance fund. The other is the Teamsters Central States plan. And there are many other, less giant multiemployer plans that are in critical condition. In the 2016 PBGC Annual Report, then-Secretary of Labor Perez said “PBGC estimates that plans covering about 10% to 15% of the 10 million multiemployer participants are at risk of running out of money over the next 20 years and that PBGC’s multiemployer insurance program is likely to run out of money by the end of 2025.”

In the past, Republican support for some sort of bailout for multiemployer plans was inconceivable. It seems to me, however, like a natural for President Trump. Moreover, other Trump proposals, particularly ending the “war on coal” and infrastructure spending, will improve conditions in the industries in which multiemployer plans are concentrated: construction, transportation and energy.

NEXT: Paying for infrastructure