WASHINGTON, D.C. - U.S. Sen. Sherrod Brown (D-OH) today announced his support for legislation that would protect pension plans for employees and employers. The Create Jobs and Save Benefits Act of 2010 (S. 3157), introduced by Sen. Robert P. Casey Jr. (D-PA) would strengthen the funding status of multi-employer plans and ensure that hundreds of thousands of current and future retirees receive the pensions they have earned.
"Employees work hard for their pensions and they should receive every penny they've earned. Period. This legislation protects employee pensions and the employers who offer them," Brown said.
Multi-employer pension plans are collectively bargained, jointly administered plans funded by multiple contributing employers. If a contributing employer withdrawals from the plan and does not pay its withdraw liability, the other contributing employers must pick-up the liability. Additionally, many plans have seen the value of their assets decline with the steep stock market losses of 2008 and 2009. Over the next decade, several multi-employer plans are projected to become insolvent. Companies still contributing to the plans also run the risk of bankruptcy because of the additional burden of being forced to pay for the pensions of the employees of other companies.
For example, the Central States Pension Fund is at risk of insolvency. This fund covers more than 50,000 Ohioans and 435,000 participants in total. In 2008, even while following prudent investment standards, the fund lost nearly 30 percent of its value. Today, approximately 55 percent of all benefit payments go to retirees of failed employers. Without this legislation, Central States could become insolvent causing severe economic hardship to participating employers and retirees.
This bill would make a number of changes to help ensure solvency of multi-employer pension plans and protect current and future retirees, including:
- Mergers and Alliances - The language in the bill would enable multi-employer funds to combine resources for purposes of reducing administrative costs.
- Partition (ERISA Section 4233) - If a plan satisfies certain requirements, the plan would transfer to a separate account all benefit liabilities attributed to orphans (participants of employers who withdrew from the plan without paying withdrawal liability) and assets equal to a maximum of 5-years of projected benefit payments. The PBGC would handle the initial application, drafting of partition agreement and monitor financial assistance to the plans. PBGC does not provide notices, calculate benefits or in any other form administer the plan. The orphans benefit would be fully guaranteed as if the orphan was still receiving benefits from the multi-employer plan.
- Order the Department of Labor and Department of Treasury to prepare a report on whether the qualified partition program has strengthened the financial condition of the original plans and improved the ability of the contributing employers to these plans to remain in business.
Sens. Debbie Stabenow (D-MI) and Roland Burris (D-IL) are also cosponsors of this legislation.
As a member of the Health, Education, Labor and Pensions (H.E.L.P.) Committee, Sen. Brown has fought for Ohio workers who have lost their pensions when businesses collapse.