Tags: pension funds | sherrod brown | richard neal | congress

Bill to Stabilize Ailing Pension Funds Due in Congress Friday

Image: Bill to Stabilize Ailing Pension Funds Due in Congress Friday
Sen. Sherrod Brown (Bill Clark/AP)

By    |   Thursday, 16 Nov 2017 04:31 PM

Legislation will be introduced in Congress Friday that would create a new Treasury Department agency that would sell bonds to provide low-interest loans to troubled multi-employer pension funds.

The bill, establishing the Pension Rehabilitation Administration (PRA), is co-sponsored by Democratic Sen. Sherrod Brown of Ohio and Massachusetts Rep. Richard Neal.

The agency, to be headed by a director that would be appointed to a five-year term by the president, would issue bonds to pay for loans to "critical and declining" status pension plans.

Other plans that could benefit include those who have suspended benefits to its retirees — and some that have recently become insolvent but are receiving assistance from the federal Pension Benefit Guaranty Corp. (PBGC).

As many as 114 multiemployer plans, covering 1.3 million workers nationwide, are at risk of running out of money in 20 years, according to Cheiron Inc., an actuarial consulting firm based in McLean, Va.

Under the 2014 Multiemployer Pension Reform Act (MPRA), the Treasury Department allows underfunded, multiemployer plans to reduce benefits to retirees, within limits, if the trustees can show it will prevent the plan from becoming insolvent.

In August, the New York State Teamsters Conference Pension and Retirement Fund became the third and largest national multiemployer plan to receive Treasury approval for a rescue effort under MPRA.

The MPRA was adopted in part to shore up those troubled plans without overburdening the PBGC, which said in August its multiemployer insurance program could be broke by 2025.

Under the Brown-Neal proposal, the PRA would sell bonds issued by the Treasury and provide 30-year loans — with interest rates of around 3 percent — to the ailing pension funds.

In many cases, plans that received federal permission to cut benefits to retirees will be able to restore them fully, while plans that have already failed could use the loans to stabilize their finances and pay pensioners the benefits they have earned.

Reuters contributed to this report.

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Legislation will be introduced in Congress Friday that would create a new Treasury Department agency that would sell bonds to provide low-interest loans to troubled multi-employer pension funds.
pension funds, sherrod brown, richard neal, congress
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2017-31-16
Thursday, 16 Nov 2017 04:31 PM
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