Securing Our Retirees' Future
For decades, millions of American workers have relied on multiemployer pension plans as they saved toward retirement. Unfortunately, the multiemployer pension system as currently structured is broken, and about one million Americans are participating in pension plans that are not expected to be solvent when these employees reach retirement age. Further, research has found that the vast majority of Americans have less than $1,000 saved for retirement. Workers deserve a secure and stable retirement, and they need to have certainty about the benefits they will receive when they reach retirement age.
From 2011 to 2016, I served as chairman of the Education and the Workforce Subcommittee on Health, Employment, Labor and Pensions (HELP) and we focused a great deal on multiemployer pension insolvency. In addition to chairing multiple hearings on this important issue, I worked with then-Education and the Workforce Chairman John Kline and Ranking Member George Miller to help pass the Multiemployer Pension Reform Act (MPRA) of 2014. MPRA was intended to allow troubled plans to develop their own stabilization plans that would preserve benefits to the maximum extent possible. Under MPRA, rather than relying on bailouts from the Pension Benefit Guaranty Corporation (PBGC) – the federal agency that guarantees pension benefits – trustees of at-risk pension plans could submit an application to the federal government to propose a reduction of benefits. While these benefits would have been less than what retirees had been promised, the benefits would have been greater than what they would receive if left to the PBGC. Unfortunately, the Obama administration refused to allow these underfunded plans to restructure, allowing the problem to worsen and leaving millions of Americans’ retirement plans in serious jeopardy.
Without action – within ten years – more than 1 million people participating in almost 200 pension plans will be left with no pension benefits. The Central States Pension Fund is a great example of this impending crisis. What’s more, the PBGC does not have the ability to cover these payments once the funds run out. So while many Americans do not participate in a multiemployer pension plan, their retirement security could be impacted by a failure to ensure adequate PBGC resources. We must take action and work together to address this serious issue.
The Bipartisan Budget Act, which passed the House and was signed into law on February 9, created a bicameral, bipartisan Joint Select Committee on the Solvency of Multiemployer Pension Plans to develop solutions to the multiemployer pension crisis. I’m honored Speaker Ryan selected me to serve as a member of this committee. Millions of hardworking Americans need us to ensure a secure retirement, and I look forward to working with my colleagues to find bipartisan solutions for future retirees.
I believe one such solution is a bipartisan proposal I have introduced with Rep. Donald Norcross (D-NJ) to enact a new type of pension plan that combines features of both a defined benefit and defined contribution retirement plan. H.R. 4997, the Giving Retirement Options to Workers (GROW) Act, is designed to modernize and strengthen the multiemployer pension system for the future, and I’m confident this could be one piece of the multi-pronged approach needed to address the multiemployer pension crisis. By encouraging these plans – sometimes called “composite” plans – we are hoping to keep multiemployer plans as a viable retirement option for employees and employers alike.
I look forward to working with my colleagues on the joint committee to ensure every American, no matter their background, has a stable and sustainable path to retirement security.
As always, feel free to contact my office if I can be of assistance to you or your family.