From Retired Public Employees Council of Washington,
Federal News: All eyes in the pension world have turned to the Joint Select Committee on
the Solvency of Multi-employer Pension Plans. They held a hearing on the history of
these pensions and how they came to face their current financial crisis.
These private sector plans represent over 10 million employees, few of whom still have
union representation and access to retirement plans. The loss in access to retirement
plans in the private sector has ripple effects in the public sector, and is one of the
largest motivators against public sector pensions.
The new 16-member bipartisan panel of Congress was created to address the
solvency of multi-employer pension plans and the Pension Benefit Guarantee
Corporation (PBGC), a federal agency that protects private defined benefit plans.
About 100 multi-employer pension plans are on the brink of insolvency. A large
number are in the construction, coal, and trucking industries; where employees
belonged to a union and paid into pension funds set up to cover workers from multiple
employers. If they go bankrupt, their participants will need assistance from the PBGC,
and more than one million pensioners will lose a large portion of their benefits. The
crisis could even collapse the PBGC multi-employer pension trust fund, putting all of
these pensions at risk.
The committee heard from witnesses who shed light on the reasons these plans are
failing, which included: a loss of industry workers, the 2008 economic recession, and
the dot-com bust. They made clear that mismanagement did not play a role in the
Solutions that have been proposed include possible financial assistance through loans,
higher premiums to the PBGC, higher employer contributions, and possible cuts to
From Maria Britton-Sipe Executive Director