In Mid-July, Ohio Senators Sherrod Brown and Rob Portman chaired a hearing in Columbus on the multi-employer pension plan (MEPP) crisis. Reading the coverage of their efforts led me to seek the opportunity to visit Ohio and visit first-hand to those most effected by this issue.
For several months, I have been serving as the Chairman of Protect Our Workers Earned Retirement (POWER!) We are a coalition of employers, workers, and retirees committed to finding a solution that is fair and reasonable to all of these interests, as well as the American taxpayer.
Ohio is fortunate indeed that both of their Senators are fully engaged and working towards a bi-partisan solution to the crisis.
Earlier this month, I was able to speak with retired and active Teamsters and current business owners about the MEPP crisis. Both groups are greatly and equally concerned about this issue.
MEPPs are simply pension plans that involve a bargaining unit that represents more than one employer. As an example, a Teamster local might have some of its workers at a warehouse, others at distribution center, and so on.
In Ohio, about 66,000 pensioners are at members of troubled (at risk) MEPP’s. The reasons for this are many and complicated. What is clear is that retirees, current workers, and businesses that remain in operation and are part of these plans are victims, not the cause of the difficulties.
Each has done exactly what they are supposed to do, every step of the way.
The largest among the funds—The Central States Pension Fund—faces an unfunded liability of $17.2 billion. More than 200 such plans across the nation are at risk of insolvency. 1.3 million individuals are facing crippling benefit cuts.
The so-called backstop, the Pension Benefit Guaranty Corporation (PBGC) has its own massive deficits to address. It would cost at least $78 billion to erase PBGC’s net deficit in 2026. All that means is that PBGC would stay afloat, and those shifted from their MEPP to PBGC to collect their benefits would encounter a 50 percent reduction in benefits. Beyond retirees, current workers also are at risk of losing benefits for which they have already paid.
Here is where it gets murky.
Some have proposed a straight government-funded bailout, similar to what Wall Street interests received in 2007-2008. According to the Committee for a Responsible Federal Budget, any solution resulting in no benefit cuts would likely cost in excess of $100 billion.
A bailout of this type is simply the wrong approach. And, to be realistic, there is absolutely no chance it would be passed by Congress, much less signed by the President. No, any solution will require a combination of shared sacrifice, full protections for the American taxpayer, and good faith negotiations by members of both parties.
A joint Congressional committee that includes Senators Brown and Portman, has been tasked with coming forward with a report by Nov. 30.
A solution must be found and found soon. Fortunately, your Senators are at the forefront of finding that solution that would be fair and reasonable.
The men and women I spoke with are depending on Congress to do the right thing. The issue is larger than one company or one industry. Let’s keep our fingers crossed that the hard work and willingness of Senators Brown and Portman to lead on this matter will be rewarded in time to meet the Nov. 30 deadline.
Connie Mack IV is a former Florida congressman who chairs the Protect Our Workers Earned Retirement coalition.