Senate Finance Committee Chairman Charles Grassley (R-IA) and Senate Health, Education, Labor and Pensions (HELP) Committee Chairman Lamar Alexander (R-TN) have proposed the Multiemployer Pension Recapitalization and Reform Plan, ultimately to be reflected in legislation intended to assist struggling multiemployer (union) pension plans. Currently, only a Technical Explanation—not legislation text—is available.
The objectives, as stated in the Technical Explanation as well as in a Senate news release, include the following.
- Stabilize plans in immediate danger of failure.
- Provide a limited infusion of taxpayer dollars.
- Strengthen the Pension Benefit Guaranty Corporation (PBGC)’s ability to insure the multiemployer system.
- Put the multiemployer system on a stable path for the long term.
- Ensure fiscal responsibility.
The bill does not go as far in providing actual funding for struggling pension plans as the Rehabilitation for Multiemployer Pensions Act, also known as the Butch Lewis Act, introduced by Ways and Means Committee Chairman Richard Neal (D-MA) and passed by the House of Representatives in July of this year. That legislation has not been considered in the Senate, but, as passed in the House, proposes the following.
- Establish a Pension Rehabilitation Administration within the Treasury Department and a related trust fund to make loans to certain union pension plans that are in critical-and-declining status, or insolvent.
- Enable the Treasury Department to issue bonds to fund the loans described above.
- Appropriate to the PBGC funds for additional assistance that some plans could qualify for beyond the above-described loans.