Multiemployer Bailout Committee Comment

The Joint Select Committee on Solvency of Multiemployer Pension Plans put up a website and they are asking for comments:

Stakeholders can submit input to the Joint Select Committee’s mailbox at JSCSMPP@finance.senate.gov. The deadline to respond is Sept. 30, 2018. All submissions will be considered part of the public record; should be clear and concise; directed at the issues that the Joint Select Committee is charged to consider; and provided in the form of an email attachment (either in Microsoft Word or text-searchable PDF file). The email containing the attachment should clearly indicate the name(s) of the author(s), contact information and any professional affiliation.

I did have a comment – with an emphasis on ‘concise’.

There is a crisis in the funding of multiemployer pension plans but the bailout this committee will likely sanction is not for the participants in these plans, who already have a portion of their benefits protected under current law, or their employers but for the Pension Benefit Guaranty Corporation (PBGC) and the plan sponsors.

The PBGC will not be able to generate enough in premium income to prop up all these failing plans while the plan sponsors want to maintain the current structure as many of them are paying their expenses (employee salaries and professional fees) out of fund monies.

To understand the real problem I would urge you to follow up on Representative Roe’s question on the differences between Defined Contribution and Defined Benefit funding and how the latter got into crisis.

 

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