US Rep. Richard Neal offers plan to address pension ‘crisis’
With many “multiemployer" pension plans reportedly on the verge of running out of money, U.S. Rep. Richard Neal, D-Springfield, announced legislation Wednesday that seeks to address the impending retirement savings “crisis” and ensure Americans do not lose benefits earned throughout their working lives.
Neal, the chairman of the House Ways and Means Committee, unveiled a bipartisan-backed measure that would help shore up retirement savings plans through the creation of a new Treasury Department office.
The bill would specifically establish a Pension Rehabilitation Administration within the Treasury Department that would be authorized to issue bonds in order to finance loans to multiemployer pension plans with “critical and declining” status, those that have suspended benefits and some newly insolvent plans receiving assistance from the Pension Benefit Guaranty Corporation.
Under the legislation, the president would appoint a director to oversee the new office. They would serve a term of five years.
Neal, who has cast retirement savings as a top priority for the Ways and Means Committee, argued that such legislation is needed to protect the 1.5 million Americans who are in multiemployer plans -- or those where employers and labor unions come together to provide retirement benefits -- 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. Now, after working for decades, their planned retirements may be taken away from them. And taken away at a time when they no longer have time to prepare for retirement because they’re now in retirement," he said in a statement.
The congressman argued that "there’s no time to waste in addressing this crisis."
“Americans need our help, and it’s time to answer that call,” he said.
Neal further stressed that his proposal “is not a bailout," as plans would be required to pay back any loans they receive from the new Pension Rehabilitation Administration.
The congressman added that it would also not allow for any cuts to benefits workers and retirees earned through their years of employment.
The chairman’s office noted that about 1,400 multiemployer plans cover about 10 million Americans.
A number of those plans face funding problems and many are “almost certain to run out of money” -- something which would result in retirees and workers losing benefits, according to Ways and Means officials.
At least four other Democrats and five Republicans have reportedly come out in support of the bill, which marks the latest congressional effort to tackle multiemployer pension plan solvency.
In early 2018, lawmakers created a select congressional committee to examine issues related to such retirement savings plans. Although the panel was unable to reach a legislative agreement before its Nov. 30 deadline, co-Chairmen Orrin Hatch, R-Utah, and Sherrod Brown, D-Ohio, pledged to continue the committee’s work.