Rep. Richard Neal, D-Mass., the new chairman of the House Ways and Means Committee and a longtime proponent of increasing retirement savings, introduced his first bill of the new congressional session Wednesday that focuses on aiding multiemployer pension plans.
The Rehabilitation of Multiemployers Act, which has bipartisan support, would establish the Pension Rehabilitation Administration, a new agency within the Department of the Treasury, authorized to issue bonds to finance loans to "critical and declining" status multiemployer pension plans, to plans that have suspended benefits, and to some recently insolvent plans currently receiving financial assistance from the Pension Benefit Guaranty Corp. The loan terms will require the plan to make interest payments for 29 years with final interest and principal repayment due in year 30, according to a summary prepared by the committee's Democratic staff. One restriction for borrowers is they would not be able to make risky investments.
The president would appoint a PRA director, who would serve a five-year term.
Mr. Neal said in a news release that of the roughly 10 million Americans covered by about 1,400 multiemployer plans, 1.5 million are in plans that are quickly running out of money. "These are American workers who planned for their retirement, who year after year chose to contribute to their pensions instead of taking a wage increase," he said. "Now, after working for decades, their planned retirements may be taken away from them. And taken away at a time when they're no longer able to prepare for retirement because they're now in retirement."
Karen Friedman, executive vice president and policy director of the Pension Rights Center, applauded Mr. Neal's efforts and said the bill is "an innovative and workable way to save financially troubled multiemployer pension plans while fully protecting the earned benefits of millions of retirees. Passing this bill should be one of the first priorities of Congress."
In the PBGC's annual report released in November, Director W. Thomas Reeder Jr. stressed that most of the 1,400 multiemployer plans covered by the PBGC are not at risk, but 130 plans are, and some will run out of money in less than 10 years. The PBGC's multiemployer program is also headed toward insolvency by the end of fiscal year 2025.
After starting work last year, the Congressional Joint Select Committee on Solvency of Multiemployer Pension Plans failed to produce a bipartisan solution to the financial crisis in those plans by its self-imposed Nov. 30 deadline, though its work continues.
Mr. Neal co-sponsored a similar bill in 2017, but it did not go anywhere. This time, though, there is bipartisan support at the time of introduction.
The Rehabilitation of Multiemployers Act is also co-sponsored by Rep. Robert C. "Bobby" Scott, D-Va., Rep. Don Young, R-Alaska, Rep. Debbie Dingell, D-Mich., Rep. Chris Smith, R-N.J., Rep. Donald Norcross, D-N.J., Rep. John Katko R-N.Y., Rep. Marcy Kaptur, D-Ohio, and Rep. Jeff Fortenberry, R-Neb.