A key Republican senator is concerned with the direction of the Pension Benefit Guaranty Corp. as President Joe Biden assesses nominees to lead the agency.
“As you consider potential nominees to fill this vacancy, I ask that you choose a nominee who both acknowledges PBGC’s historic shortcomings and has concrete plans to solve them in a manner unafflicted by partisan politics,” said Sen. Bill Cassidy, R-La., ranking member on the Health, Education, Labor and Pensions Committee, in a July 9 letter to the president.
In May, Biden designated Ann Orr as the PBGC’s acting director following the departure of Gordon Hartogensis, whose five-year term ended April 30.
Cassidy and other Republican lawmakers have voiced concerns in recent years over the PBGC’s Special Financial Assistance Program, which was created by the American Rescue Plan Act that Democrats passed in 2021 and is designed to shore up struggling multiemployer pension plans through 2051.
“Despite numerous calls from congressional Republicans, however, this bailout did not include necessary reforms to the multi-employer pension system to prevent another solvency cliff down the road,” Cassidy said.
In his letter, Cassidy pointed to the Teamsters Central States, Southeast & Southwest Areas Pension Fund, Chicago, receiving $127 million more in aid than it should have. The Central States pension fund in 2022 received $36 billion in special financial assistance, but it was later determined that there had been a $127 million overpayment because of an erroneous counting of dead retirees.
In April, Central States repaid the $127 million.
Cassidy also said PBGC has created challenges for single-employer pension plans by failing to timely provide necessary information that would help them correct their financial problems.
And looking forward, the next director will likely be tasked with working with Congress as it comes under increasing pressure to address practical concerns such as premium reform for single-employer pension plans, Cassidy said.
Many retirement industry groups have called on Congress to reduce PBGC premiums, and Cassidy hinted that work on the matter is likely.
“Your nominee must have the trust of members from both political parties to work on behalf of those plans and their participants, unencumbered by partisan affiliation,” he said.
