Compliance

Lawmakers Introduce Legislation to Stop Multiemployer Plan Benefit Cuts

The new legislation establishes a legacy fund within the Pension Benefit Guaranty Corporation.

By Rebecca Moore editors@plansponsor.com | May 10, 2017

Senator Bernie Sanders (I-Vermont) and Representative Marcy Kaptur (D-Ohio) introduced legislation, The Keep Our Pension Promises Act, which would reverse a provision passed in 2014 that could result in deep pension cuts for millions of retirees and workers in multiemployer pension plans.

According to the Pension Rights Center, to date, 15 plans covering more than 500,000 workers and retirees have applied to cut retiree pensions and more than 60 plans covering nearly one million workers are eligible to do the same. In February, Iron Workers Local 17, based in Cleveland, Ohio, became the first plan to implement 50% to 60% cuts to retiree pensions.

The cuts are allowed under the Multiemployer Pension Reform Act of 2014 (MPRA) for multiemployer defined benefit (DB) plans in critical and declining status.

The new legislation establishes a legacy fund within the Pension Benefit Guaranty Corporation (PBGC) to ensure that multiemployer pension plans can continue to provide pension benefits to every eligible American for decades to come. This legislation is paid for by closing two tax loopholes that allow the wealthiest Americans to avoid paying their fair share of taxes.

“We have got to send a very loud and clear message to the Republican leadership in Congress and the president of the United States. When a promise is made to the working people of this country with respect to their pensions and retiree health benefits, that promise cannot be broken,” Sanders says. “If Congress could bailout Wall Street and foreign banks throughout the world, we certainly can protect the pension benefits of American workers.”

A summary of the bill is here. Full text of the legislation is here.

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