The Select Committee on Multiemployer Pensions conducted its third hearing yesterday and heard from two key witnesses who voiced support for the concept of government-sponsored loans as a means of shoring up failing multiemployer pension plans. However, the panelists also stated that they believed workers’ pensions should also be cut as part of the deal. The two key panelists were Chris Langan, a finance executive with United Parcel Service, and Aliya Wang, Executive Director of Retirement Policy for the United States Chamber of Commerce, a lobbying organization which represents the business sector.
On May 17, the Select Committee on Multiemployer Pensions held a two-hour hearing on the Pension Benefit Guaranty Association (PBGC). The sole witness was Thomas Reeder, the current head of the PBGC.
First, a little background. The PBGC was created in 1974 when Congress passed the Employee Retirement Income Security Act, ERISA, the purpose of which was to provide pension security to Americans. Pension security rested on two pillars. One pillar was the "anti-cut back rule" which provided that a pension already earned from past labor could not be cut. The second pillar was the PBGC, a Government sponsored insurer of last resort which would step in and pay pension benefits if the pension plan became insolvent. The idea was that, as President Gerald Ford said when signing ERISA into law, “the retirement dollars will be there when they are needed.”
On April 18 the Joint Select Committee on Multiemployer Pensions held a two-hour hearing at which the panel heard from two experts who provided a briefing on the history and dimensions of the multiemployer pension problem. By design there was little discussion of possible legislative fixes to the problem. The panel wanted to understand the problem first.