House expected to pass COVID-19 relief bill with multiemployer aid

The House on Tuesday is expected to approve a COVID-19 relief bill that includes federal assistance for struggling multiemployer pension funds and some funding relief for single-employer plans.

The American Rescue Plan Act of 2021, H.R. 1319, a $1.9 trillion package that passed the Senate on March 6, includes $350 billion in direct aid to state, local governments, territories and tribes, but prohibits them from spending it on public pension costs.

After passage by the House, it will go to the White House for President Joe Biden's signature.

The close 50-49 Senate vote highlighted the partisan divide over the relief measure, particularly on the multiemployer pension provisions.

Sen. Chuck Grassley, R-Iowa, criticized it as "an $86 billion bailout with no strings attached, all but guaranteeing that taxpayers will be on the hook for future intervention to rescue the failing retirement plans."

Mr. Grassley was part of a bipartisan congressional group that last year tried to reform the multiemployer pension system and avoid insolvency for the Pension Benefit Guaranty Corp.'s multiemployer program, but failed to reach an agreement. A provision in the relief package offered by Mr. Grassley to add some structural reforms was rebuffed by Senate Democrats.

The multiemployer pension provisions in the final bill increases the PBGC multiemployer plans premium rate to $52 a participant starting in calendar year 2031 and then indexed for inflation. Financial assistance received by plans must be segregated from other plan assets, and must be invested in investment-grade bonds.

Senate Health, Education, Labor and Pensions Committee Chairwoman Patty Murray, D-Wash., said in a statement that the package will benefit at least 185 pension plans covering millions of people and solves the multiemployer crisis 'in a way that shores up struggling pension plans, keeps healthy ones intact, puts the Pension Benefit Guaranty Corporation on stronger financial footing, and — most importantly — ensures people don't face cuts to the benefits they are depending on."