Democrats Press McConnell to Fix Pensions

This story appears in the June 6 print edition of Transport Topics.

Senate Democrats are pressuring Majority Leader Sen. Mitch McConnell (R-Ky.) to take up pension legislation for truckers and miners before the summer recess that begins in six weeks.

Twenty senators, including Sherrod Brown (D-Ohio), Ron Wyden (D-Ore.), Patty Murray (D-Wash.) and Elizabeth Warren (D-Mass.), presented their case to McConnell in late May in a letter that was sent less than three weeks after the U.S. Department of Treasury rejected a Central States Pension Fund rescue plan that would have cut most Teamsters retirees’ pensions by half or more.

McConnell

That ruling, and the unwillingness of the largest union pension fund to submit a new plan, could leave as many as 270,000 active and retired workers with no union pension within a decade due to Central States’ financial weakness, the fund has said.

The letter to McConnell marked the latest attempt to address Teamsters pensions, which also have included union efforts to block the Central States plan from taking effect and a Capitol Hill rally in April to which bus loads of Teamsters retirees came from as far away as Nebraska.

McConnell’s office didn’t respond to requests for comment from Transport Topics.

“Before we break for the long summer recess, we must move the bipartisan Miners Protection Act [S. 1714],” the letter to McConnell said. “At the same time, we also ask that you work with us to address troubled multiemployer plans like Central States, because time is working against those retirees as well.”

The miners’ bill, which Brown co-sponsored, would block the cessation of benefits to about 100,000 workers whose pension benefits are slated to expire Dec. 31.

For truckers, two bills have been introduced to address pension issues. One bill would block cuts from occurring, and the other would change the process for voting on future pension reductions.

Central States was required to come up with a rescue plan under a 2014 measure called the Multiemployer Pension Reform Act, or MPRA, which required a review by the Treasury Department and a member vote if the federal agency approved steps to cut pensions.

“Legislation that only reforms the voting rules under MPRA will not solve this crisis; we need to find a real solution, and we need to do it this year,” the letter said. “We understand that there are no easy answers, but we owe it to the hardworking Americans, who played by the rules and worked a lifetime for a secure pension, to do our best and not to wait for another day,” the letter said.

While Central States is saddled with five beneficiaries for every active worker and pays out $3.46 in pensions for each dollar received, some other Teamsters funds are solvent, including the Western States fund that is almost fully funded.

Wyden, the ranking member of the Finance Committee, and his colleagues said Central States’ plight “is emblematic of our pressing multiemployer pension problem.”

“The Pension Benefit Guaranty Corp., or PBGC, the federal agency tasked with protecting these defined-benefit retirement plans, and the hard-earned pension payments that they support, is itself troubled and may not be able to adequately address this crisis,” said the Oregon senator and fellow Democrats.

The PBGC was created to continue pensions for workers whose plans ran out of funds. In the case of some workers covered by Central States, their benefits would have been cut as much as 70% to a level just above the current PBGC benefit level.

“While the miners’ situation presents the most imminent loss of benefits, we also must act this year to address the Central States issue, which is emblematic of the broader multiemployer pension crisis,” the letter to McConnell said.

The other signatories were Sens. Claire McCaskill (D-Mo.), Heidi Heitkamp (D-N.D.), Debbie Stabenow (D-Mich.), Amy Klobuchar (D-Minn.), Al Franken (D-Minn.), Joe Manchin (D-W.Va.), Richard Durbin (D-Ill.). Gary Peters (D-Mich.), Joe Donnelly (D-Ind.), Tammy Baldwin (D-Wis.), Charles Schumer (D-N.Y.), Jeanne Shaheen (D-N.H.), Tom Carper (D-Del.), Ben Cardin (D-Md.), Maria Cantwell (D-Wash.) and Jon Tester (D-Mont.)