[Congressional Record Volume 167, Number 42 (Friday, March 5, 2021)]
[Senate]
[Page S1273]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




   CRIS ALLEN MULTIEMPLOYER PENSION RECAPITALIZATION AND REFORM PLAN

  Mr. GRASSLEY. Mr. President, the multiemployer pension system has 
been in need of a major overhaul for years. More than 300 plans are 
critically underfunded. Moreover, the Pension Benefit Guaranty 
Corporation, PBGC, multiemployer insurance fund, which is a backstop 
for these plans, is projected to become insolvent in the next 5 years.
  If this occurs, 1.5 million retirees, due to no fault of their own, 
could see their hard-earned retirement benefits slashed to pennies on 
the dollar. This is unacceptable, and it is one of the reasons that, 
when I took over as chairman of the Senate Finance Committee in 2019, I 
made it a priority to fix the failing multiemployer pension system. To 
me, this has always meant helping secure the retirement benefits of 
millions of retirees and ensuring that this retirement system is 
sustainable over the long term. Working with former Senator and HELP 
Committee Chairman Lamar Alexander, I immediately got to work on a 
draft proposal, which was released for public input and stakeholder 
feedback in November of 2019. We received numerous comments from 
workers, retirees, unions, employers, actuaries, academics, plan 
officials, and members of the general public that helped me refine my 
approach and create a balanced plan.
  Yesterday, I reintroduced this version of my plan, which is titled 
the ``Chris Allen Multiemployer Pension Recapitalization and Reform 
Act.'' This legislation recognizes that, given the severity of the 
underfunding issue, some Federal dollars will be necessary to shore up 
severely troubled plans in the short term. But, this limited assistance 
must be coupled with structural reforms intended to address the root 
causes of our current situation. This includes reforms to multiemployer 
funding rules to ensure plans are adequately capitalized to make good 
on promises made to plan participants. Furthermore, it would increase 
PBGC oversight of troubled plans and enhance transparency for plan 
participants. Critically, it also overhauls the financing of the PBGC 
multiemployer insurance fund so that it can resume its role as the 
insurer of last resort for these plans without additional taxpayer 
funding.
  The fundamental tenet of my plan is that all stakeholders have a role 
in fixing the multiemployer pension system. The American taxpayer 
shouldn't be expected to simply write a blank check. Stakeholders need 
to have skin in the game if the system is to be sustainable moving 
forward.
  I understand that this is an extremely complex situation. There is no 
perfect solution. From the start, I have let it be known I want to work 
with my Democratic colleagues to find a bipartisan compromise. In June 
of last year, I came to the floor to plead with my Democratic 
colleagues to come to the table in hopes we could work toward a 
bipartisan agreement prior to the end of last Congress. Unfortunately, 
for months I heard nothing. Then, with only a few weeks left in the 
116th Congress, my Democratic colleagues took me up on my offer and 
negotiations began in earnest. Several weeks of bipartisan negotiations 
ensued, but there simply was not enough time to iron out all our 
differences to ensure we had sufficient Member support before the end 
of the year. However, I found our discussions constructive. They were 
focused correctly on securing the retirement benefits of participants 
in the failing plans in the near term, while also ensuring the long-
term sustainability of the multiemployer pension system without a 
Federal takeover.
  I hoped our negotiations would provide a foundation for continuing to 
work toward a bipartisan solution this Congress. Instead I am 
disappointed to see that the majority has include an unprecedented $86 
billion no-strings bailout of troubled multiemployer pension plans in 
the reconciliation bill currently before the Senate.
  As I have discussed, I recognize that Federal funds will be needed to 
solve the pension crisis in the short term, but it is equally as 
important that essential reforms are enacted to ensure the system can 
be self-sustaining in the long term. Otherwise, taxpayers will be 
perpetually subsidizing a private sector system of employee-benefit 
promises. That is exactly what will occur if my Democratic colleagues 
insist on going forward with the reform-free bailout included in this 
package. As is, this proposal has been stripped of even the most 
rudimentary of reforms or accountability measures. In fact, one 
provision even bars the PBGC from issuing regulations to provide for 
such measures. As a result, the proposal is likely to breed what 
economists call ``moral hazard'' as plan managers and sponsors realize 
that there are no consequences to underfunding and overpromising. In 
the end, the American taxpayer will be left footing the bill for a 
private sector retirement system.
  I hope my Democratic colleagues will reconsider moving forward with 
their no-holds-bared bailout. Fundamentally, it does not belong in the 
current package. The issues plaguing the multiemployer system long 
predate the pandemic and are not COVID related. But if it is to be 
included, at a minimum, essential reforms along the lines of what I 
have proposed must be included. They are essential to protect the 
American taxpayer and to ensure the long-term sustainability of the 
multiemployer system.
  Toward this end, I intend to offer a motion to commit the 
reconciliation bill to the Finance Committee with instructions to 
report it back with critical reforms to ensure multiemployer plans are 
adequately funded and the PBGC's insurance fund is adequately financed. 
Without such reforms, the current proposal would set the precedent that 
the American taxpayer, not the PBGC, is the ultimate guarantor of 
private-employer pension promises. If this is the case, the burden on 
the American taxpayer will not be the $86 billion in this package or 
even hundreds of billions of dollars. It will be limitless.

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