Members of Congress’ Joint Select Committee tasked with solving the nation’s pension crisis failed to present a bipartisan solution by its self-imposed November 30 deadline.
The Joint Select Committee on Solvency of Multi-Employer Pension Plans, co-chaired by Sen. Orrin Hatch (R-Utah) and Sen. Sherrod Brown (D-Ohio), said in a Thursday statement that “it will not be possible to finalize a bipartisan agreement before” its Friday deadline.
“We believe a bipartisan solution is attainable, and we will continue working to reach that solution,” the co-chairs added, saying they have made “meaningful progress” in addressing the issue.
“The problems facing our multi-employer pension system are multifaceted and over the years have proven to be incredibly difficult to address,” their statement continues. “Despite these challenges and a highly-charged political environment, we have made meaningful progress toward a bipartisan proposal to address the shortcomings in the system to improve retirement security for workers and retirees while also providing certainty for small businesses that participate in multi-employer plans.”
As Battleground State News previously reported, an estimated six millions retirees and four million workers in the United States rely on multi-employer pension plans, called “MEPPs” for short, which are collectively-bargained plans maintained by more than one employer to limit risk.
A report conducted by Matrix Global Advisors CEO Alex Brill and sponsored by Protect Our Workers Earned Retirement (POWER) notes that the Pension Benefit Guarantee Corporation—the federal backstop for MEPPs—is itself expected to “be insolvent in less than a decade.”
Additionally, the Central States Pension Fund, one of the largest MEPPs in the country, will also be insolvent by the year 2025.
“Even after legislative fixes to improve plans’ financial status in 2006 and 2014, one-third of the 10 million participants are in plans that are headed toward either a funding deficiency or insolvency. More than 1 million people are in plans projected to be insolvent within 20 years,” Brill’s report states.
In all, the report estimates a projected loss of more than 55,000 jobs, a drop in $3 billion in labor income, and a drop in GDP of more than $5 billion.
“The Joint Select Committee (JSC) has missed the November 30 deadline. That is the bad news,” former Rep. Connie Mack (R-FL-14) and national chairman of POWER told Battleground State News. “The good news is that JSC leaders are signaling there is common ground and a will to work towards a solution before the next Congress convenes.”
In order to reach a bipartisan solution, Mack’s organization needs to urge Democrats to avoid looking at a bailout as the answer while convincing Republicans that the federal government does in fact have a role to play.
“Millions of Americans whose retirement depends on a long term solution are depending Congress will do its job. Study after study shows the damage of a failure to act will impact not only those directly part of [MEPPs],” Mack continued, saying that the damage “could erase” the recent economic gains.
“Any agreement must be fair to workers, retirees, and employers, as well as the American taxpayer,” he suggested. “Let us all hope a bipartisan agreement that meets the test of being a real solution is put forward in the coming days.”
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Anthony Gockowski is managing editor of Battleground State News and The Minnesota Sun. Follow Anthony on Twitter. Email tips to [email protected].
Photo “Orrin Hatch” by Orrin Hatch. Photo “Sherrod Brown” by Sherrod Brown.