WASHINGTON, D.C. | June 17, 2016
Rep. John Kline (R-MN), chairman of the House Committee on Education and the Workforce, issued the following statement today after the Pension Benefit Guaranty Corporation (PBGC) released two reports
documenting the significant challenges facing the multiemployer pension system:
These reports put in stark detail the very real risks facing American workers, retirees, and taxpayers. They also demonstrate the costly consequences resulting from the administration’s recent actions. The bipartisan Multiemployer Pension Reform Act provides the tools necessary to save plans from insolvency and protect retirees from losing everything. When trustees are denied the opportunity to use those tools, the risk to workers, taxpayers, and retirees grows greater.
Today is a reminder of the urgent need to enact additional reforms to strengthen multiemployer pensions, reforms that would modernize the system for workers and provide PBGC additional resources to meet its obligations. There have never been any easy answers, and it’s time for those who oppose recent reforms to be honest about these challenges and put forward responsible solutions. Our efforts in 2014 were based on bipartisan cooperation with strong support from both employers and labor leaders. A similar effort is the only way to protect the best interests of employers, workers, taxpayers, and retirees.
Key details from the reports released today:
- PBGC’s multiemployer insurance program is expected to run out of money in 2024.
- The multiemployer pension system is funded at only 41 percent, which translates to approximately $610 billion in unfunded liabilities.
- PBGC’s multiemployer deficit is expected to increase in 2025 to $53.4 billion from $36.1 billion in 2024, largely due to the administration’s implementation of the bipartisan Multiemployer Pension Reform Act.
- If plans on the brink are unable to use the tools Congress provided in 2014, premiums would have to be increased by up to 552 percent in order for PBGC to meet its obligations over the next 20 years.