WASHINGTON, D.C. | October 29, 2013 -
The topic of this hearing personally affects many in our audience, men and women who have spent a lifetime in the workplace and hope to enjoy retirement with the financial security they were promised. Unfortunately, that security is now in jeopardy for a number of different reasons.
For example, the recent recession and a sluggish economy continue to threaten the multiemployer pension system and the retirement savings of many Americans. Flawed government policies have also had a hand in the current crisis we face, making it difficult for the trustees of these pension plans to prepare during the good times for the difficult times we are now in.
I expect our witnesses will describe in greater detail the challenges facing the multiemployer pension system and how we have ended up with nearly $400 billion in unfunded benefit liabilities, a Pension Benefit Guaranty Corporation on the brink of insolvency, employers stretched thin by current pension obligations, and both workers and retirees fearful they will lose what they worked so hard to achieve.
For more than a year the subcommittee has been closely examining this difficult issue. During that time two things have become abundantly clear.
First, the pain inflicted on workers and retirees will be far greater if we fail to act in the coming months. A number of multiemployer plans are regaining their financial health. We certainly welcome that progress and hope it continues. However, we cannot lose sight of the sizeable number of large plans that remain in financial trouble.
Pension plans that include hundreds of thousands of workers will become insolvent unless they receive the tools necessary to change course. If they don’t, it is impossible to predict with any certainty how far the consequences will spread. We’ve discussed in previous hearings a domino effect that would undermine not just the strength of the individual pension plans, but the pension system as a whole. PBGC will become overwhelmed and unable to provide the federal backstop it has delivered for nearly 40 years, which means some retirees will be left with nothing.
We must also be mindful that employers will be harmed under this nightmare scenario as well. Improving the multiemployer pension system is not only about retirement security; it’s about saving jobs and protecting the competitiveness of America’s workplaces. As elected policymakers, we have a responsibility to take action and help prevent the worst from happening.
It has also become clear that there are no easy answers, despite what some may suggest. Our goal is to strengthen multiemployer pensions. Part of that effort must include finding ways to encourage new employers to join the system. Raising contributions and premiums to punitive levels will undermine this important goal. In fact, I fear it will destroy jobs and drive even more employers out of the system, exacerbating the problems that already exist.
We need to find a better way forward. While we face significant challenges, I am hopeful we can enact meaningful solutions before it’s too late. Members from the labor and management communities have united behind a comprehensive proposal to reform the multiemployer pension system. Their work has been vital to this debate and encouraged members on both sides of the aisle.
I’ve also had a number of positive conversations with the senior Democratic member of the subcommittee, Representative Rob Andrews. We share a commitment to working together and making the tough choices that are necessary. America’s workers, employers, and retirees deserve no less.
I know this is extremely difficult for every man and woman involved. Promises were made and lives were planned believing those promises would be kept. I cannot fathom the anxiety and frustration you must feel, but I hope you will work with us – not against us – as we try to preserve the multiemployer pensions you and millions of Americans rely upon.
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