WASHINGTON, D.C. | December 19, 2014
There are nearly 11 million workers and retirees across America, including more than 165,000 Minnesotans, who rely on the little known but economically vital multiemployer pension system. Nationwide, this system has an economic impact of approximately $38 billion — with more than $375 million in benefits being paid to Minnesota retirees each year.
Today, many multiemployer pension plans find themselves in jeopardy, including some right here in our state.
Make no mistake: Some of these pension plans are on the brink of insolvency. While most plans are well-funded, including those here in Minnesota, some of the nation’s largest plans are in trouble. If they fail, the fallout will overwhelm the federal backstop, which recently announced that it is facing a $42 billion funding deficit.
If no action is taken, the plans themselves — as well as the government safety net — likely will disappear. That would mean deep, automatic cuts to pensioners and the real risk of businesses needing to close their doors forever.
U.S. Rep. John Kline, R-Minn., chairman of the congressional committee that oversees pensions, has called this issue a “ticking time bomb” that jeopardizes a long-standing promise to so many retirees. Just last week, Kline, along with the committee’s ranking member, Rep. George Miller, D-Calif., crafted a bipartisan proposal to address this issue.
The proposal has support from both labor and business groups; both the House of Representatives and the Senate recently passed the pension reform legislation. Thankfully, our leaders have acted to address an issue before it became an unmanageable crisis.
As heads of a company with headquarters in Minnesota and of an international labor union, we don’t always see eye to eye on issues, but on this critical matter, we do.
These plans give employees the ability to accrue benefits in industries where frequent job changes are common — such as retail, construction, entertainment or, in our case, the food services industry. Companies contribute to these pension funds on behalf of their employees. These pension plans have existed for decades and, historically, they have been stable pension vehicles for countless families. Today, millions depend on their hard-earned retirement benefits, and employers depend on them to stay competitive and to stay in business.
Like other multiemployer participants, we have taken many steps on our own to ensure that our business, employees and retirees can continue to rely on their plans for both business stability and retirement security. With this action, Congress is providing the critical tools so the plans themselves can take the steps needed to survive in the long term. Congress’s bipartisan action provides the opportunity to keep the majority of multiemployer plans healthier longer — and helps prevent the devastating, automatic cuts that would have come if nothing had been done.
We applaud the efforts on this critical issue.
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