When Democrats take control of the U.S. House in January they’ll be looking to increase the financial security for millions of Americans.
It is not just Social Security and Medicare that will get attention in the next Congress, but some struggling private pension plans as well.
"The multi-employer pension plans across the midwest in America are in severe jeopardy right now," said Massachusetts Democrat Richard Neal, in line to become chairman of the powerful House Ways and Means Committee.
Speaking with reporters the day after the November election, Neal identified multi-employer pensions as an issue he hopes to take action on.
" If we don't handle it correctly it threatens to bring down the Pension Benefit Guarantee Corporation, because we would be overwhelmed in this crisis," said Neal.
Earlier this year, Neal met in Springfield with labor leaders from across Massachusetts to discuss legislation he introduced aimed at preventing troubled multi-employer pension plans from failing.
The bill would create a federal agency that would sell U.S. Treasury-issued bonds and loan the proceeds from the bond sales to the financially-troubled pension plans.
" This is not a Wall Street bailout or a savings and loan bailout," said Neal. " It allows many of these plans to be nursed back to good health."
Every Democrat in the House signed on to the bill, but it got support from only 14 Republicans.
Multi-employer pension plans are negotiated between unions and trade associations representing fields such as transportation, manufacturing, and construction. Sweeping changes in these industries have left fewer active companies to contribute to pension systems for a growing number of retirees.
"Some of the plans are down to the last man standing and that small company is incapable of meeting those obligations," said Neal.
Frank Callahan, president of the Massachusetts Building Trades Council, said organized labor in Massachusetts supports Neal’s bill.
"This is a problem that can not wait too long to be solved," said Callahan.
A study released last month by Cheiron Inc., a pension consulting firm, said 121 multi-employer pension plans covering roughly 1.3 million workers are underfunded by about $49 billion and could be insolvent within 20 years.
The report identified the New England Teamsters and Trucking Industry Pension Plan as being the second-most underfunded multi-employer pension plan in the nation at a current unfunded liability of $5.1 billion.
The pension plan covers more than 70,000 truck drivers and warehouse workers.
Another study estimated that up to 1.5 million people are in multi-employer plans that are likely to fail, and more than 3.5 million people are in plans considered at risk.
