Statement of the AFL-CIO Retirement Security Working Group on the Grassley-Alexander Multiemployer Pension Plan Proposal
December 2, 2019
After a lifetime of hard work, working people deserve to retire with dignity. The labor movement is proud of our negotiated multiemployer pension plans, which have provided retirement income security for millions of working people for decades. Now, as a result of reckless Wall Street behavior, industry deregulation and employers’ creative use of corporate bankruptcy, important parts of that multiemployer pension system are at risk. To stave off financial devastation for retirees across the nation, the Senate must act immediately—but it also must act wisely.
Senators Grassley and Alexander have finally put forward the Republicans’ white paper to address the crisis faced by several multiemployer pension plans. As it stands, their proposal will not only injure the retirees and active participants it purports to help, it also will precipitate the collapse of all multiemployer pension plans.
This document contains no federal financial assistance whatsoever. Contrast this to the over $700 billion that the government provided to the banks and Wall Street in 2008 and other corporate tax giveaways in recent years. Here, under the guise of a federal solution, Grassley and Alexander have crafted a tax increase that hits hardest those who do not bear responsibility for the financial challenges faced by troubled multiemployer pension plans—including retirees, active pension plan participants, unions and employers.
Any multiemployer pension legislation should, at a minimum, do no harm. This proposal fails that basic test. Instead, it is punitive in nature, imposing hefty new costs that even healthy plans will be unable to survive. For example, in one sizeable national plan, there would be an eleven fold increase in Pension Benefit Guaranty Corporation (PBGC) premiums that would double the cost of that plan’s administration.
PLEASE CALL YOUR SENATOR!
Recapitalization and Reform Plan – Phone Script
Please call : Baldwin, Tammy - (D - WI)
709 Hart Senate Office Building Washington DC 20510
Please call : Johnson, Ron - (R - WI)
328 Hart Senate Office Building Washington DC 20510
SAMPLE TELEPHONE SCRIPT
Hello, my name is ________ and I live in _______.
I am an (active or retired) member of the International Brotherhood of Electrical Workers (if appropriate also identify as a veteran). I am calling the Senator to oppose the Grassley-Alexander “Multiemployer Pension Recapitalization and Reform Plan.”
This plan would bankrupt my pension plan and increase taxes on what little is left.
When big banks and Wall Street were in trouble, Congress gifted them with a $700 billion bailout 2008. The multiemployer pension system, including the failing plans and the Pension Benefit Guaranty Corporation, could be made whole by taking back just 0.005% (one half of one percent) of the 14-percent corporate tax break passed by Congress in 2017 at a cost of $1.4 trillion.
I (will or already) pay payroll taxes on my pension checks, and now the Republicans want to add 10 percent in additional taxes. The Grassley proposal would also:
- Drastically increase Pension Benefit Guaranty Corporation (PBGC) premiums
- Create massive new taxes on the wealth of workers
- Cap the discount rate at 6%, requiring plans to increase contributions and slash benefits.
- Render our pension system unsustainable and result in government-induced market failure
This proposal is not bipartisan and no part of it is acceptable to me or the IBEW.
Congress needs to focus on finding solutions for failing plans, not devastate mine, which is in good shape. I urge the Senate to pass the bipartisan Butch Lewis Act, (H.R. 397), which passed the House on July 25, 2019, with IBEW support. It is a loan program, not a bailout.
Butch Lewis is the best current proposal because it does not increase premiums and fees on healthy pension plans to support failing plans.
The Mine Workers are most at risk and need immediate relief. I support the bipartisan American Miners Act (S. 2788).
IBEW members didn’t cause this crisis. We have only worked hard and counted on the multiemployer pension system to be there for us and our families in our retirement years. I hope you will stand with your constituents on this issue.