U.S. House lawmakers agreed on an appropriations bill this week that includes an amendment submitted by Representatives John Kline (R-Minnesota) and George Miller (D-California) that would allow trustees of severely underfunded multiemployer defined benefit plans to adjust vested benefits.
The lawmakers said this would enable deeply troubled plans to survive without a federal bailout.
The provision would require approval by plan participants of any proposed benefit adjustments that take effect, with a fail-safe mechanism for those plans that present a systemic risk to the multiemployer pension system. It would provide participant protections to safeguard the most vulnerable retirees, including disabled retirees and individuals age 75 and older, according to a summary.
In addition, the legislation would give the Pension Benefit Guaranty Corporation (PBGC) the authority to take earlier action to help save failing plans, thereby reducing potential future costs, and adjust the premium structure in order to place the PBGC on more firm financial ground.
The bill amendment includes provisions to stop the sunset of certain provisions of the Pension Protection Act of 2006 (PPA).
Randy G. DeFrehn, executive director of the National Coordinating Committee for Multiemployer Plans, issued a statement in support of the measure, saying it included the reform elements in the labor-business-backed Solutions Not Bailouts proposal.
However, AARP Senior Vice President Joyce Rogers released a statement in opposition of the bill, saying, “After a lifetime of hard work to earn their pensions, retirees don’t deserve to receive a bad deal.”