[Congressional Record Volume 166, Number 134 (Wednesday, July 29, 2020)]
[Senate]
[Pages S4577-S4578]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]



                      Multiemployer Pension Plans

  Mr. President, I am also here on floor today to talk about another 
critical issue we should be addressing.
  As we speak, there continues to be a looming crisis involving what is 
called our multiemployer pension system, and without reform, it is 
going to result in pension benefit cuts of over 90 percent for more 
than 1.4 million American workers and retirees and unnecessary 
bankruptcies for a lot of small businesses, including many in my home 
State of Ohio.
  Multiemployer pension plans are defined benefit plans maintained by a 
lot of different companies, multiple companies, and a labor union that 
pool together their pension assets to cover all workers and retirees in 
the plan. The multiemployer system now comprises roughly 1,400 plans 
covering almost 11 million participants and their families
  Unfortunately, it is on the verge of collapse. Years of bad Federal 
policy with respect to funding and withdrawal, liability rules, losses 
on risky investments, and failure to take proactive action have led to 
this crisis, and the current economic slowdown caused by the 
coronavirus has made the situation even worse.
  Not only is the system underfunded by about $638 billion, but the 
Federal entity that insures these pensions, the Pension Benefit 
Guaranty Corporation, is also projected to become insolvent in less 
than 5 years. So the multiemployer part of the PBGC, Pension Benefit 
Guaranty Corporation, is projected to become insolvent in less than 5 
years. We can't let that happen.
  In my home State of Ohio, we have more than 50,000 active workers and 
retirees in multiemployer pension plans who are facing deep benefit 
cuts if we do nothing, with hundreds of small businesses contributing 
to these plans that could be forced to close if we fail to act.
  There are about 200 small businesses in Ohio that are going to have 
huge liabilities, many of which are not going to be able to continue to 
operate. We can't let that happen.
  Nearly 42,000 of those Ohioans, by the way--many of them veterans--
participate in a single plan called the Central States Pension Fund, 
which is also the largest plan considered to be in what is called 
critical and declining status and is projected to become insolvent by 
2025. It is that insolvency that will take down the PBGC if it is not 
already insolvent.
  The good news is that proactive action now will reduce the cost of 
fixing the problem, will ensure a secure retirement for these 
participants and their families, and will ensure certainty for 
employers to make investments in good-paying jobs.
  The further good news is that the House Democratic proposal which 
passed as part of the Heroes Act--it is called the Emergency Pension 
Plan Relief Act--is more similar to the Senate version, the Senate 
Republican structure, than the previous Democratic plan. So not only is 
the Democratic plan in their COVID-19 response bill, called the Heroes 
Act, but it is also more similar in structure to legislation that some 
of us have been working on over here on the Senate side. That means we 
have a better shot, I believe, this year than we have had in a long 
time to try to solve this crisis and do it in a bipartisan way.
  In my view, in order to solve this, it is going to entail three key 
principles:
  First, we are all in this together, and that means we all have a 
shared responsibility.
  House Democrats have proposed using only taxpayer money to rescue 
these plans. None of the stakeholders are asked to, again, have any 
shared responsibility. That is not the way to get bipartisan support in 
Congress. Employers and participants must also share the 
responsibility, especially since about 94 percent of taxpayers do not 
participate in this system, many of whom are struggling with their own 
retirement security. As an example, somewhat higher employer 
contributions are required if multiemployer plans are to sustainably 
provide the benefits they promise.
  Second, we need to ensure that we safeguard the long-term financial 
health of the PBGC so we aren't back in this fiscal crisis again soon. 
Part of that should be a new, small, variable-rate premium for plans, 
but we also need participants in federally rescued plans to pitch in 
with solvency fees paid directly to the PBGC. These do not have to be 
large payments.
  The Federal Government and the taxpayer, I think, are willing to play 
a role as long as this is viewed as something that is part of shared 
responsibility. But it is important that all stakeholders are 
contributing to the health of the PBGC in addition to us

[[Page S4578]]

here in Congress and therefore the taxpayers because insolvency would 
be in no one's interest.
  Finally, we have to ensure that there is long-term solvency for these 
multiemployer plans. That entails enacting some restructuring, some 
structural reforms to the funding rules governing employer 
contributions so that bailing out these plans doesn't become a habit of 
the Federal Government. We don't want to fix this problem and be right 
back in a few years having to fix it again.
  We should gradually phase down the rate of return which plans assume 
in budgeting for promises that are made to participants, partly because 
that keeps these plans from going bankrupt and partly because that is 
just fair. Investment risk is a problem in these plans now, and we need 
to give more certainty to workers and retirees.
  The pension crisis is an issue that I, along with Senator Grassley, 
Senator Sherrod Brown from Ohio, and many other colleagues here in the 
Senate, have been trying to solve for quite a long time. We had a 
bicameral and bipartisan solution very close at hand at the conclusion 
of a committee process that ended about a year and a half ago, but we 
weren't quite able to get there. I think it is achievable, particularly 
now, but only if we are willing to listen to each other and willing to 
come around the table for a real discussion.
  Republicans have reached out. I reach out today. We are ready to find 
an acceptable compromise. We are ready to talk, but that discussion 
needs to be driven by the merits of solving this issue, not just the 
politics of the moment. We owe solving this problem to those 
beneficiaries--the retirees, the workers, the active workers in these 
plans--and to the small businesses participating in these plans. We 
have to find common ground. We have to deliver a sustainable and 
lasting solution.
  I believe we have an opportunity right now, this month, to try to 
come together, working with the House and the Senate and the 
administration. Everybody has a responsibility to do it. We talked 
about shared responsibility with regard to the plans; there is also a 
shared accountability here in the U.S. Congress. This is our job. We 
can get this done. I think we are quite close now with similar 
structures and having gone through various iterations during the select 
committee process a year and a half ago. Let's do the right thing. 
Let's act now.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Ohio.

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