Senator Tammy Baldwin, D-Wisconsin, a member of the Senate Committee on Health, Education, Labor and Pensions (HELP), reintroduced her Pension Stability Act.
Current law requires entities convicted of financial crimes to seek an exemption from the Department of Labor in order to manage retirement plan funds. Baldwin’s reform would impose fees on entities seeking the exemption. The new revenue generated from the fees would be directed to the Pension Benefit Guaranty Corporation (PBGC), which insures multiemployer and single employer pension plans.
The PBGC’s multiemployer pension program, which covers over 10 million participants, is projected to run out of money by the end of fiscal year 2025.
“Financial institutions convicted of a crime should have to pay a penalty that will provide funding to support workers and retirees who saw massive cuts to their pensions through no fault of their own. This reform helps us keep our promise to workers,” says Baldwin.
Baldwin is a cosponsor of the House-passed Butch Lewis Act, led by Senator Sherrod Brown, D-Ohio. The Act would provide funds for 30-year loans and new financial assistance, in the form of grants, to financially troubled multiemployer pension plans. As detailed in the text of the legislation, the program is designed to “operate primarily over the next 30 years.” However, the Congressional Budget Office (CBO) projects that about one-quarter of the affected pension plans would become insolvent in the 30-year loan period and would not fully repay their loans.Baldwin says the Pension Stability Act would complement the Butch Lewis Act by providing additional funding to the PBGC, helping to shore up worker pension plans. More information about the proposed legislation is here.
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