[Congressional Record Volume 166, Number 104 (Thursday, June 4, 2020)]
[Extensions of Remarks]
[Page E519]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          OPPOSING THE GROW ACT'S INCLUSION IN THE HEROES ACT

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                           HON. MARCY KAPTUR

                                of ohio

                    in the house of representatives

                         Thursday, June 4, 2020

  Ms. KAPTUR. Madam Speaker, I am very pleased the House took important 
action to support the pensions of millions of Americans in the HEROES 
Act. Action to secure the retirement benefits of workers and retirees 
in troubled multiemployer plans and the long-term solvency of the 
Pension Benefit Guaranty Corporation (PBGC) remains a top priority of 
mine. Despite this positive effort, I am troubled by inclusion of 
provisions that impact healthy multiemployer pension plans. The 
inclusion of the GROW Act, which possesses significant conflicting 
support and opposition on important, must pass legislation is deeply 
troubling. The GROW Act will hurt workers, retirees, employers and the 
PBGC, and should not become law.
  Composite plan legislation would create two plans--an existing plan 
and a new ``composite'' plan--out of a single, finite pool of assets. 
This places added burden on the ability to fund each adequately, 
increasing the odds of failure. Existing plans could refinance their 
obligations over 25 years--more than 10 years longer than current law 
allows. This reduces available funds for benefits under existing plans, 
making them vulnerable to funding shortfalls--and thus at risk for 
draconian benefit cuts in times of market volatility. For example, if 
Congress had already passed the GROW Act and it was law during the 
market volatility COVID inflicted on the stock market, the benefits 
composite plan participants expected to earn would be cut 70 percent, 
and the vested benefits they already earned would be cut 25 percent. At 
the same time, the vested benefits of participants in the existing plan 
would be cut 21 percent.
  In addition to using accounting gimmicks to weaken existing 
multiemployer pension plans and place Americans' retirement security at 
risk, composite plans would also make it easier for employers to 
withdraw from existing multiemployer pension plans altogether, without 
paying their fair share of obligations to participants. Under current 
law, employers withdrawing from a pension plan must pay a ``withdrawal 
liability'' based on their contribution to the plan. Provisions of the 
GROW act would eliminate withdrawal liability for composite plans, and 
it would dramatically reduce the cost of withdrawing from an existing 
plan.
  Moreover, composite plans would not be insured by the PBGC and would 
be exempt from paying PBGC premiums. This erodes the PBGC premium base 
significantly. When combined with plan failures that composite plans 
would accelerate, the PBGC will face new liabilities that will drive it 
to a new solvency crisis. Because of the grievous harm the GROW Act 
imposes on workers, retirees, the PBGC, and the entire multiemployer 
plan system, I strongly oppose its inclusion in the HEROES Act.

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