Pensions are facing a crisis. We have a plan to stop it | Opinion
One of my main priorities as a member of Congress is to lift more people out of poverty in Philadelphia and nationwide. Our bill to protect pensions in part of that.
Recently The Inquirer covered the plight of several thousand current and retired ACME employees, whose pension plans may dry up in eight years, if not sooner.
I want them and everyone to know that I and other leading Democrats in the U.S. House are working to save not only their pensions, but pensions that are at risk for other employees and retirees around the country.
I am cosponsoring the bipartisan Rehabilitation for Multiemployer Pensions Act (H.R. 397), introduced by Rep. Richard Neal (D., Mass.), chairman of the House Ways and Means Committee, on which I serve.
This bill has, as of this writing, more than 170 cosponsors. It would address this growing problem that threatens to trap or dump more Americans into poverty. One of my main priorities as a member of Congress is to lift more people out of poverty in Philadelphia and nationwide, so I see this bill as a vital preventive tool.
Like the ACME workers, the people in failing multiemployer pension plans did everything right. They planned for their retirement, year after year choosing to contribute to their pensions instead of taking a higher wage. But now, after working for decades, their planned retirements may be taken away from them — and at the worst possible time, when they’re no longer able to prepare for retirement because they’re now near or in retirement.
These pension plans have been hit hard by the stock market crash of 2008 and other factors beyond the workers’ control. These people worked hard and played by the rules.
If no action is taken, the pensions of truck drivers, coal miners, ironworkers, bakers, and many more would continue to be cut significantly.
There’s no time to waste in addressing this crisis. The bill I am cosponsoring would save these retirees’ and workers’ benefits through a private-public partnership.
Under the proposal, private investors would be able to purchase highly attractive, long-term Treasury bonds backed by the full faith and credit of the United States.
A new office within the U.S. Treasury Department, called the Pension Rehabilitation Administration, would administer loans to troubled pension plans using the money from the sale of the long-term bonds. These loans would allow multiemployer pension plans to remain solvent, grow their assets, and pay promised benefits.
The loan proceeds would have to be invested in low-risk investments, like an annuity or a fixed income investment. Additional assistance would be available to those plans that need it.
I want to emphasize that this would not be a bailout. These plans would be required by law to pay back loans from the PRA — the federal government would simply backstop the risk, and workers wouldn’t have to go without their pensions while pension administrators struggle to shore up their long-term financial security.
Congress did bail out Wall Street in 2008, only because it had to keep Wall Street’s mess from becoming a full-blown Great Depression. I was elected to Congress in 2016, and I believe we must look out for workers first.
Workers built America. They deserve a deal at least as good as Wall Street’s 2008 deal. We must protect workers’ pensions and their financial security, and H.R. 397 would do exactly that.
U.S. Rep. Dwight Evans represents the 3rd Congressional District, which includes Northwest and West Philadelphia and parts of North, South, Southwest, and Center City Philadelphia.