PRC To Bailout Committee

The Joint Select Committee on the Solvency of Multiemployer Pension Plans (Bailout Committee)has been hearing from several fronts on the wisdom of bailing out severely underfunded multiemployer plans so that participants will not have to have their benefits cut (further). Here are excerpts from what the Pension Rights Center (PRC) had to say:

Congress, in an ill-advised attempt to address the funding problem, enacted MPRA in 2014, which empowered employer and union trustees of certain severely underfunded multiemployer plans to reduce already accrued retirement benefits—as much as 70%. Congress passed MPRA without hearings or debate; the provisions of MPRA were simply attached by House leadership to must-pass spending legislation shortly before Congress adjourned in December of 2014. MPRA eviscerated 40 years of protections under the federal private pension law, ERISA, which prohibited plan trustees from reducing benefits in pay status until the plan had exhausted its assets.
…..
Third, the financial cost of repairing the multiemployer system should not be borne primarily by retired participants in these plans, as has occurred under MPRA. This legislation must be repealed and replaced with a workable solution that balances the interests of all stakeholders and protects the earned benefits of workers and retirees.
Fourth, federal financial assistance is appropriate given that the economic and human costs of not fixing the system vastly exceed the costs of fixing it.
…..
1. Creation of a federal loan program that eases the cash-flow problems of financially-troubled multiemployer plans. Such a program should earmark loans to fund existing retiree and deferred vested benefits, leaving the plans with the time, resources and tools to grow out of their financial problems through the existing contribution base and investment earnings. These loans should be available to all plans that are in critical and declining status as long as the plans can demonstrate that they will be able to repay the loans and satisfy their benefit obligations to active workers. As important, all plans that have cut benefits since the enactment of MPRA should be eligible to apply for loans so that they are able to restore workers’ and retirees’ benefits to their previous levels.
…..
4. Legislation that provides for loans and/or PBGC assistance to ongoing plans should have guardrails to prevent abuse and ensure that the loans are repaid.

What the PRC did not address:

  1. Where will the loan money be coming from?
  2. How can a multiemployer plan that demonstrates an inability to pay benefits to their retirees without loan money also prove that it will have the resources to repay those loans?

20 responses to this post.

  1. Posted by In God we trust. on October 5, 2018 at 5:24 pm

    Cap all pensions at $50.000 yearly and stop all double dipping by those that take a public elected position and continues to suck off the teat of the pension system. This is pure greed on their part. Lastly raise the pensions of those who receive less than $25,000 yearly to a minimum of 35,000 yearly, they can’t make it especially with their COLA cut for the past several years. This simple reconstruction would lower the cost of the yearly payout by some 25 to 35% yearly and it would be fair for all.

    Reply

  2. Posted by Tough Love on October 5, 2018 at 8:42 pm

    John,

    Your #2 was EXACTLY what I was thinking………….. and “demonstrate it” with full/accurate details and with a straight face…. and with very substantive CONSEQUENCES for those who lie !
    —————————–

    Taxpayers (that had ZERO to do with Union/Corporate MEP arrangements) must NOT be left paying for this.

    Reply

  3. Posted by Tough Love on October 6, 2018 at 7:17 am

    Off Topic ………..

    Yup, while this specific article focuses on Kentucky’s Public Sector pensions mess, the discussion of how pension reform “obstructionists” (you know, those like Stephen Douglas/aka-Earth) think and maneuver.

    https://www.state-journal.com/2018/10/04/jim-waters-dodging-pension-crisis-wont-fix-it/

    Reply

  4. Posted by Stanley on October 6, 2018 at 10:24 am

    Pension Rights Center: “Third, the financial cost of repairing the multiemployer system should not be borne primarily by retired participants in these plans, as has occurred under MPRA.”

    Woe is me. Their whole statement should receive very wide dissemination–shouted from the rooftops. I doubt if many on the other side of the problem would agree with their assessment. Signing up to bail out MEP pensions is also signing up to bail out all pensions, which may not appear so unreasonable with financial markets clocking at historical peaks, but that won’t last forever.

    Kline-Miller 2014 was about as good as could be done to address the MEP difficulties. It should be extended to any pension plan that runs into trouble, IMO. If spendthrifts are continually bailed out, how will they ever address their money management shortcomings?

    Reply

    • Posted by Anonymous on October 6, 2018 at 12:10 pm

      What a crock from a hypocrtical receipient of a Federally taxpayer funded Military pension! Individuals CHOOSE a career path (no draft since ~1973) for various personal and financial reasons. Decisions are made based upon the employment promises (public & private) provided when you’re hired. I’d bet the rank and file military retirees would descend on Washington (armed) if their pension or benefits were on the chopping block?

      Reply

      • Posted by Tough Love on October 6, 2018 at 1:16 pm

        No, What YOU stated is a “crock”.

        In the Private Sector FUTURE-service compensation can ALWAYS be changed.

        Only in the Public Sector do we (in many States/Cites) appear to be locked into CONTINUING to granted FUTURE service pension accruals at a level that is clearly unnecessary, unfair to Taxpayers, and VERY clearly unaffordable.

        THAT needs to END ….. and PRONTO !

        Reply

      • Posted by bruce paterson on October 11, 2018 at 12:50 pm

        that did happen to the WW1 veterans back around 1932. It was called the bonus march, the depression was financially hurting the govt so everything was on the table. The govt cut their promised stipends and they marched on washington. http://www.ushistory.org/us/48c.asp

        Reply

  5. Posted by Stanley on October 6, 2018 at 1:12 pm

    “…(no draft since ~1973)…”

    Not that it’s germane, but when I turned 18, the lady at the draft board said that it was either military service or two years in prison. I chose to serve in the military.

    “Decisions are made based upon the employment promises (public & private) provided when you’re hired.”

    No pension is worth plunging the country into mass bankruptcy or a catastrophic inflation. You should know that! It’s wrong to saddle younger people with paying off this debt. You should know that, too!

    We just have to learn to live more frugally.

    Reply

    • Posted by Stanley on October 6, 2018 at 4:05 pm

      So?

      Reply

      • Posted by Anonymous on October 6, 2018 at 4:23 pm

        Quoting Stanley: Not that it’s germane, but when I turned 18, the lady at the draft board said that it was either military service or two years in prison. I chose to serve in the military. I guess you’re on or very close to Medicare & SS too? So you’re set, no big changes for you now? The hell with the rest now that you got yours! Way to go, now that’s what I call Trump mentality!!

        Reply

        • Posted by Stanley on October 6, 2018 at 6:19 pm

          IMO it is a good idea to concentrate on one’s own plan, a plan that allows that the promises from others may be subject to adjustment. If there is anything that we can bank on, it is that there will be adjustments in payouts and coverage from Social Security and Medicare. And, it is in the interest of everyone that the country stays half way civilized and financially upright. More has been promised than can be delivered from almost every entity that does the promising. And worrying about who does or does not get the biggest piece of pie isn’t very productive IMO. I have Medicare and hope that I never bill them for anything.

          Reply

          • Posted by Anonymous on October 6, 2018 at 6:50 pm

            Sounds reasonable, especially when what you’ve been promised is backed by a printing press! Guess, eventually, we’ll all see what happens OR it won’t matter because we ain’t t on God’s Green Earth no more.

          • Posted by Anonymous on October 6, 2018 at 7:20 pm

            Draftees weren’t ‘forced’ to make a career out of it they did it by choice! Good for you for sticking it out, possibly traveling the country/world, maybe a free education, and of course a pension & VA benefits (which should be worth something now that Trump’s running the show).

            Another thing, while I agree with your assessment regarding societal over promises – who, how, and when do you start to wean society off of the promises. I’m pretty sure your fellow current Medicare & SS receipents would never stand for any significant cuts to their promises. It’s a it needs to be done to somebody else mentality.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: