This is from an email I got from the Pension Rights Center.
We’ve heard from reliable sources that high-paid lobbyists, working in concert with retiring Representative John Kline, are redoubling their efforts to get the “composite bill” inserted into the end-year Appropriations bill – just as they did with the Multiemployer Pension Reform Act at the end of the 2014 congressional session. In fact, we’ve heard that this bill could pass as early as Wednesday, December 7th…
Like MPRA, this draft composite legislation was developed by Representative John Kline (R-MN), the retiring chair of the House Committee on Education and the Workforce. Where MPRA gave license to trustees to slash the benefits of retirees, this ill-conceived proposal would allow the trustees of healthy multiemployer pension plans to switch to new inferior plans that don’t provide guaranteed benefits to workers or retirees. Even worse, the bill would allow plan trustees to divert money from the old plans to the new plans – increasing the chances that well-funded plans could fall into underfunded status, threatening the promised benefits of both workers and retirees.
Comment below fold.
From Mac Hall: All workers should be concerned … Kline’s deceitful inclusion in 2014YearEnd must-pass lame-duck legislation that produced this problem is at it again.
Kline has known about the problems for too long … heck, Republican David McKinley has said that he has worked on it for over four years. The Pension Benefit Guaranty Corporation issued a report in June and in September, Kline put out a “draft” proposal but to my knowledge has not offered it as legislation.
Kline’s proposal has a few problems (as well as some vocal critics) … such as the draft would allow plan actuaries to certify that a composite plan meets the 120-percent funded-ratio standard based upon assumptions that the actuary believes are reasonable. Operative word “believes” … if you ever got a call from an investment “advisor” telling you about some great stock (think Enron) that he really “believes” in, then you already know to be wary.
Well, the concern is that the actuary could use unrealistic assumptions to conclude that the plan is in compliance with the funding standards even though it would not be in compliance if realistic assumptions were used. Kline’s legislation should be reworked to require the Treasury Department be charged with establishing standards for plan sponsors — with the ability to reject actuary’s conclusions if deemed unreasonable.
The PBGC report is pretty scary … especially when you consider the premium increases that are already established (Kline supported the Deficit Reduction Act of 2005 which raised the premium from $2.60 to $8 per participant … then Kline supported The Moving Ahead for Progress in the 21st Century Act which raised in to $13) … now they will have to be raised again … biggly …. and the concern should be that some companies will terminate their plans … leaving workers and retirees at risk.
No doubt that this is a problem … and a main component of the Kline Legacy … he wanted to be Chairman … he didn’t follow Boehner’s promise of open and empowered committee, instead opting to hold the power in the chairman’s gavel … in the end, he has done nothing to make things better for workers … while leaving problems for the future.
Worse yet … the future will be lead by President Trump and Chairwoman Virginia Foxx.