U.S. Senators Rob Portman, R-Ohio, and Sherrod Brown, D-Ohio, introduced the Pension Accountability Act (S. 833), designed to give workers and retirees “a seat at the table” when a looming multiemployer pension bankruptcy may require major pension cuts.
The Senators both opposed the Multiemployer Pension Reform Act (MPRA), enacted in 2014, and are working together to replace it with a comprehensive, bipartisan solution. They claim the MPRA did virtually nothing to prevent the pending insolvency of the Pension Benefit Guaranty Corporation (PBGC), which is projected to become insolvent in 2025. According to a press release, PBGC Director Tom Reeder recently testified that the insurer’s net deficit in 2026 would be only 1% smaller if eligible plans could not use MPRA to reduce benefits.
Under MPRA, severely underfunded multiemployer pension plans within 20 years of insolvency may apply to cut pension benefits if the cuts would have more than a 50% chance of preventing plan insolvency, among other requirements. Multiemployer plan participants are allowed to vote on the cuts, but the Pension Accountability Act is a targeted, technical fix to amend the voting procedures under MPRA.
The bill amends the MPRA in two ways:
- For struggling pension plans seeking cuts, it will make the participant vote binding in all situations. Their majority vote will be required for any pension cuts to occur.
- It will make the vote fair by counting only the ballots that are returned. Unreturned ballots will no longer be counted as a “yes” vote.