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Pension Funds

Cost of multiemployer pension plan loan program hard to determine, CBO says

US National Capitol - landmark in Washington D.C.

A proposed federal loan program for struggling multiemployer pension plans could cost less than an initial estimate of $100 billion over a decade, in part because few plans would be eligible, the Congressional Budget Office said Monday.

In a letter to Sen. Orrin Hatch, R-Utah, chairman of the Joint Select Committee on Solvency of Multiemployer Pension Plans, CBO Director Keith Hall said estimating the costs of legislation creating a loan and financial assistance program "are highly uncertain," in part because final provisions of the bill have not been decided, and other specifics, such as loan interest rates and repayment provisions, are not specified.

Under some interpretations of the wording of the bill, few plans would qualify for loans and assistance, and federal costs would be substantially less than $100 billion, Mr. Hall said.

"The results of a formal cost estimate could differ substantially in either direction based on further clarification," Mr. Hall said in the letter.