Under the leadership of Chairman John Kline (R-MN), the House Committee on Education and the Workforce has been working hard on behalf of students, small business owners, teachers, and working families. And by improving education, retirement, job training, and more, the committee has delivered impressive results. This is the seventh in a
series of releases that will look back at some important reforms the committee has advanced under Chairman Kline’s leadership—reforms that will help more Americans pursue a lifetime of success and prosperity.
Chairman Kline speaks on the House floor in support of the Multiemployer Pension Reform Act
in December 2014.
When it comes to addressing the multiemployer pension crisis, there are no easy answers. More than a million Americans are in collapsing defined benefit pension plans. What’s worse, the federal backstop in place to insure those plans—the Pension Benefit Guaranty Corporation (PBGC)—is facing insolvency. As a result, countless families are at risk of losing everything.
With the retirement security of hardworking men and women at stake, doing nothing simply isn’t an option. Chairman Kline has always known action is urgently needed. That’s why he played a leading role among a coalition of employers, union leaders, Democrats, Republicans, Congress, and the administration who came together to identity the best possible solution for working families. After years of hard work, the Multiemployer Pension Reform Act (MPRA) was signed into law in December 2014. These bipartisan reforms:
- Prevented workers and retirees from losing everything by empowering trustees of severely underfunded plans to adjust vested benefits and enabling deeply troubled plans to survive without a federal bailout.
- Provided protections to safeguard the most vulnerable retirees, including disabled retirees and individuals age 75 and older.
- Gave the PBGC the authority to take earlier action to help save failing plans and adjusted the premium structure to improve the agency’s long-term fiscal health.
It wasn’t the most popular thing to do, but leadership requires making tough decisions and putting forward solutions. As the editorial board of the Minnesota Star Tribune acknowledged:
…[S]ome hardened problems have no good or easy solutions, and that in such situations, strong leadership means identifying the least bad option.
There are few better illustrations of this than the Kline-Miller Multiemployer Pension Reform Act, a painful but necessary measure that acknowledged federal bailouts for severely underfunded pension funds are unlikely and gave unprecedented flexibility to pension funds to restructure on their own to avoid insolvency.
Despite this important bipartisan achievement, there’s a lot more to do to modernize the multiemployer pension system. Earlier this year, Chairman Kline took the next step in that important effort by releasing a draft proposal to provide workers a new option to save for retirement. And once again, it reflected the input of both employers and labor leaders. North America’s Building Trades Unions applauded the proposal, saying:
Working families across the country are facing significant uncertainty with their multiemployer pensions and they deserve to have additional tools available to preserve their retirement benefits.
The Association of General Contractors agreed, writing that the proposal:
…would build on the MPRA reforms offering new and innovative structural designs that are necessary to ensure multiemployer plans can continue to provide a sound retirement benefit for our employees.
Beyond multiemployer pension reform, there’s also more to be done to make it easier for working families to save for retirement. Unfortunately, a new regulatory scheme will do just the opposite by restricting access to affordable retirement advice. That is why the committee advanced bipartisan reforms that would ensure retirement advisors act in their clients’ best interest without putting retirement advice out of reach for those who need it most. But since the administration ignored the concerns of both Democrats and Republicans, Congress had no choice but to pass a resolution that would protect low- and middle-income families and block the flawed rule.
The committee’s efforts to protect access to affordable retirement advice and modernize the multiemployer pension system are all part of an ongoing commitment to help working families retire with financial security and peace of mind.
To read other releases in the Leadership & Results series, click here.
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