PBGC Report Shows that Brown Multiemployer Pension Fix is Working



 

Brown’s ‘Butch Lewis Act’ Helped Save Multiemployer Pension Plans

WASHINGTON, D.C. – The Pension Benefit Guaranty Corporation (PBGC) released its Fiscal Year (FY) 2021 Annual Report, showing that the agency’s multiemployer plan program will now remain solvent for another 30 years. After a years-long fight alongside Ohio retirees, workers, and businesses, Brown secured a fix for failing multiemployer pension plans in the American Rescue Plan, which he helped write and pass. The new report from PBGC shows that Brown’s legislation prevented potentially drastic, negative consequences for the country’s economy, especially amid the economic downturn caused by the ongoing COVID-19 pandemic.

“For years, I stood beside workers and businesses urging my colleagues in Congress to address this issue. We knew that the problem could be solved, but would only get more expensive and difficult as time passed. Finally, this past March, this Congress and this administration came together to pass historic legislation to help solve the underfunding crisis. This report shows that the advocacy of workers, retirees, and small business owners in Ohio and around the country is paying off,” said Brown. “The PBGC is finally on solid footing again and retirees can rest easy knowing that their pensions are safe.”

In order to shore up the multiemployer system and protect the hard-earned benefits of America’s workers, retirees, and their families, the program is expected to provide funding to over 250 severely underfunded pension plans. In FY20, the PBGC reported a $63.7 billion deficit, anticipating a wave where insolvencies would have required the PBGC to pay benefits to over 70,000 retirees in plans that were going bankrupt. Now, as a result of Brown’s pension fix, the PBGC expects to report a $481 million surplus by the end of FY21

Brown secured the Butch Lewis Act, named in memory of Butch Lewis, the former retired head of Teamsters Local 100 in southwest Ohio, in the American Rescue Plan. This legislation secured retirement benefits for workers and retirees in endangered pension plans for 30 years—with no cuts to benefits. Brown worked for years alongside Rita Lewis, Butch’s widow, who continued her late husband’s fight for the retirement security these workers earned over a lifetime of hard work.

Brown’s Butch-Lewis Act helped to:

  • Keep multiemployer pension plans solvent and well-funded for 30 years—with no cuts to earned benefits of participants and beneficiaries;
  • Restore full benefits for retirees in plans that previously had to take cuts and increase the maximum Pension Benefit Guarantee Corporation (PBGC) insurance amount; and
  • Require each plan that receives assistance file regular status reports with the PBGC and Congressional Committees, in order to prevent recurrence and to protect retirees’ benefits. 

More on the Pension Crisis:

The pension crisis threatened the retirement of more than 1-1.5 million workers and retirees nationwide and put small businesses across the country in jeopardy. These truck drivers, carpenters, bakers and others worked hard all their lives and gave up raises at the bargaining table in order to put that money toward retirement for themselves and their families.

Numerous pension plans, including the Central States Pension Plan, the Bakers and Confectioners Pension Plan, and more were at risk of failure. If nothing was done to help the plans, they would have failed and retirees would have faced massive cuts to the benefits they earned over decades of work, through no fault of their own.

If the plans were allowed to fail, not only would they no longer be able to pay promised benefits, but taxpayers and small businesses would be at risk of having to pay the billions of dollars PBGC would be on the hook for that it could not pay.

There are several causes for this crisis, including the fact that the economic collapse of 2008 devastated these plans and the people who depend on them.

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