U.S. Senator Bernie Sanders (I-Vermont) has introduced legislation to keep multiemployer pension plans from cutting benefits.
In the Multiemployer Pension Reform Act of 2014 (MPRA), Congress established a new process for multiemployer pension plans to propose a temporary or permanent reduction of pension benefits if the plan is projected to run out of money. A multiemployer pension plan sponsor that believes benefit reductions are needed must submit an application to the U. S. Department of the Treasury showing that reductions are necessary to keep the plan from running out of money.
Sanders’ bill would repeal that provision and restore anti-cutbacks rules, so retirees in financially troubled multiemployer pension plans will be protected from having their earned benefits cut. The bill also establishes a legacy fund within the Pension Benefit Guaranty Corporation (PBGC) to make sure multiemployer pension plans can continue to provide pension benefits. The legislation is paid for by eliminating a loophole in the estate tax and a tax break on sales of expensive art and other collectibles.
“If we do not repeal this disastrous law, retirees all over this country could see their pensions cut by 30% or more. We cannot let that happen,” Sanders said in a statement. “Instead of asking retirees to take a massive cut in their pension benefits, we can make these plans solvent by closing egregious loopholes that allow the wealthiest Americans in this country to avoid paying their fair share of taxes.”
The same version of the bill was also introduced in the U.S. House by Representatives Marcy Kaptur (D-Ohio) and Tim Ryan (D-Ohio). The U.S. Department of the Treasury released proposed and temporary regulations to implement the suspension of benefits provisions of MPRA the same day the bill was introduced to lawmakers.
More information about Sander’s bill can be found here.