Sen. Chuck Grassley (R-Iowa), a senior member and former chairman of the Senate
Finance Committee, reintroduced the Chris Allen Multiemployer Pension Recapitalization and Reform Act.
The legislation is based on a 2019
avert the collapse of critically underfunded multiemployer pension plans and
reform rules for these plans to prevent future funding shortfalls within these
important pillars of the American retirement system.
multiemployer pension system is in serious trouble, and the PBGC, its insurer
of last resort, is set to be insolvent in five years, absent changes. This bill
ensures both short-term and long-term sustainability and provides security for
so many American workers who otherwise could see their retirement plans
evaporate. Last Congress, as chairman of the Finance Committee, I worked to
incorporate a broad range of input, and Democrats finally began working with us
in earnest late last year. Unfortunately, they have abandoned those efforts in
favor of an $86 billion bailout in their partisan COVID relief package. Not
only is their plan totally unrelated to the pandemic, but it also does nothing
to address the root cause of the problem. Without a plan like the one I’m
proposing, taxpayers will be on the hook for another bailout down the road,” Grassley said.
the bill in 2020 after he and former Senator Lamar Alexander
sought stakeholder feedback to their 2019
to address the multiemployer pension crisis.
is named after Chris Allen, who was a dedicated member of Grassley’s Finance
Committee staff who passed away in 2020. Chris poured thousands of hours of
work into developing, drafting and perfecting the legislation.
of the legislation can be found HERE
section-by-section of the legislation can be found HERE
submitted the following statement for the Senate record upon reintroducing the
for the Senate Record by Senator Chuck Grassley (R-Iowa)
Statement on Pension Bailout
multiemployer pension system has been in need of a major overhaul for years. More
than 300 plans are critically underfunded. Moreover, the Pension Benefit Guarantee
Corporation (PBGC) multiemployer insurance fund, which is a backstop for these
plans, is projected to become insolvent in the next five years.
this occurs, 1.5 million retirees, due to no fault of their own, could see
their hard-earned retirement benefits slashed to pennies on the dollar.
is unacceptable. And, it’s one of the reasons that, when I took over as
Chairman of the Senate Finance Committee in 2019, I made it a priority to fix
the failing multiemployer pension system. To me, this has always meant helping secure
the retirement benefits of millions of retirees and ensuring that this
retirement system is sustainable over the long term.
with former Senator and HELP Committee Chairman Lamar Alexander, I immediately
got to work on a draft proposal, which was released for public input and
stakeholder feedback in November of 2019.
numerous comments from workers, retirees, unions, employers, actuaries,
academics, plan officials, and members of the general public that helped me
refine my approach and create a balanced plan.
week, I reintroduced this version of my plan, which is titled – the Chris Allen Multiemployer Pension
Recapitalization and Reform Act.
legislation recognizes that, given the severity of the underfunding issue, some
federal dollars will be necessary to shore up severely troubled plans in the
short-term. But, this limited assistance must be coupled with structural
reforms intended to address the root causes of our current situation.
includes reforms to multiemployer funding rules to ensure plans are adequately capitalized
to make good on promises made to plan participants. Furthermore, it would
increase PBGC oversight of troubled plans and enhance transparency for plan
it also overhauls the financing of the PBGC multiemployer insurance fund so
that it can resume its role as the insurer of last resort for these plans
without additional taxpayer funding.
fundamental tenet of my plan is that all stakeholders have a role in fixing the
multiemployer pension system. The American taxpayer shouldn’t be expected to
simply write a blank check.
need to have skin in the game if the system is to be sustainable moving
understand that this is an extremely complex situation. There is no perfect
solution. From the start, I have let it be known I want to work with my
Democrat colleagues to find a bipartisan compromise.
June of last year, I came to the floor to plead with my Democrat colleagues to
come to the table in hopes we could work toward a bipartisan agreement prior to
the end of last Congress.
for months I heard nothing. Then, with only a few weeks left in the 116th
Congress, my Democrat colleagues took me up on my offer, and negotiations began
weeks of bipartisan negotiations ensued, but there simply was not enough time
to iron out all our differences to ensure we had sufficient member support before
the end of the year.
I found our discussions constructive. They were focused correctly on securing
the retirement benefits of participants in the failing plans in the near term,
while also ensuring the long-term sustainability of the multiemployer pension
system without a federal takeover.
hoped our negotiations would provide a foundation for continuing to work toward
a bipartisan solution this Congress. Instead, I’m disappointed to see that the
majority has include an unprecedented $86 billion no-strings bailout of
troubled multiemployer pension plans in the reconciliation bill currently
before the Senate.
have discussed, I recognize that federal funds will be needed to solve the
pension crisis in the short term. But, it’s equally as important that essential
reforms are enacted to ensure the system can be self-sustaining in the long
term. Otherwise, taxpayers will be perpetually subsidizing a private-sector
system of employee-benefit promises.
exactly what will occur if my Democrat colleagues insist on going forward with
the reform-free bailout included in this package. As is, this proposal has been
stripped of even the most rudimentary of reforms or accountability measures. In
fact, one provision even bars the PBGC from issuing regulations to provide for
result, the proposal is likely to breed what economists call “moral hazard” as
plan managers and sponsors realize that there are no consequences to
underfunding and overpromising. In the end, the American taxpayer will be left footing
the bill for a private-sector retirement system.
my Democrat colleagues will reconsider moving forward with their no-holds-bared
bailout. Fundamentally, it does not belong in the current package. The issues
plaguing the multiemployer system long predate the pandemic and are not COVID
it is to be included, at a minimum, essential reforms along the lines of what I
have proposed must be included. They are essential to protect the American
taxpayer and to ensure the long-term sustainability of the multiemployer
this end, I intend to offer a motion to commit the reconciliation bill to the
Finance Committee with instructions to report it back with critical reforms to
ensure multiemployer plans are adequately funded and the PBGC’s insurance fund
is adequately financed.
such reforms, the current proposal would set the precedent that the American
taxpayer, not the PBGC, is the ultimate guarantor of private-employer pension
promises. If this is the case, the burden on the American taxpayer will not be
the $86 billion in this package, or even hundreds of billions of dollars. It
will be limitless.
yield the floor.