Key Panel Oks Multi-Employer Pensions Rescue Bill

Mark Gruenberg

Mark Gruenberg Editor, Press Associates Union News

At a hearing packed with hundreds of workers, lawmakers on the key committee handling pension issues approved  legislation to establish federal loans for troubled multi-employer pension plans.

The measure, HR397, named for Ohio unionist Butch Lewis, who died of a stroke four years ago, would set up a bureau in the Treasury Department to judge applications from the troubled plans. Lewis’s multi-employer plan went broke, and his widow’s pension payout collapsed.

Those plans which can show federal loans would be used to both become solvent and to keep benefits level for current retirees – or their families and survivors – would get the loan funds, repayable after 30 years. The money would come from selling U.S. Treasury bonds.

“We are in the homestretch” of passing HR397, Teamsters President Jim Hoffa said at an outdoor press conference an hour before the July 12 House Ways and Means Committee work session on it. “This is a battle for dignity and for keeping the promises made” to millions of workers. But workers “have to walk the halls” to ensure it passes, he warned.

The multi-employer pension plan problem now affects more than 100 plans serving one million retirees and survivors. Multi-employer plans cover 10 million people overall. They’re common in industries such as trucking, bakeries and confectionery firms, construction, food processing and coal mining.

Joint labor-management boards run the plans, with all employers contributing to the workers’ pensions.

But corporate consolidations, bankruptcies and the plummet in pension values during the 2008 Great Recession put multi-employer plans into the “red zone” of financial danger, where they could go broke within months or years.

The Mine Workers’ two pension plans, which the federal government virtually chartered 72 years ago, are in the most-immediate danger. The biggest threat is the Teamsters’ giant Central and Southern States pension plan.

And the federal Pension Benefit Guaranty Corporation’s (PBGC) fund to cover takeovers of broke multi-employer plans – which would pay out far less than what was promised to workers by their multi-employer plans – is running out of cash, too. The result is huge benefit cuts for workers, like Butch Lewis, who sacrificed pay hikes for a decent pension, his widow, Rita, said.


“If there’s a better approach than benefit cuts, which the 2014 (multi-employer plan) law led to, I’d like to hear it,” Rep. Ron Kind, D-Wis., challenged the GOP during the work session. He got a round of applause. “It matters that we look out for our people,” added Rep. John Larson, D-Conn.

“This is a solution for everybody, not just Teamsters. These people worked hard for 30 or 40 years to retire with dignity, and we have to make sure that promise is kept,” Hoffa said before that.

But Republicans, both on the Ways and Means panel and overall, call the rescue legislation “a bailout.” And Murray Energy, the nation’s largest coal company, also objects. As a result of mergers and bankruptcies, it would fund 97% of one of UMW’s pension funds.

Panel chair Rep. Richard Neal, D-Mass., along with lead co-sponsor Rep. Peter King, R-N.Y., refuted that bailout charge at the outdoor press conference. Another House panel, the Education and Labor Committee, passed HR397 last month on a party-line 26-18 vote. But Ways and Means writes actual pension and tax legislation, so it’s the key House committee in the mix.

“This is not a bailout. What we are proposing is a backstop: The full faith and credit of the U.S. government, which is used every day worldwide,” through the Treasury bonds, Neal explained. “We will construct a structure, a rehabilitation agency, with minimal costs” to run the pension program.

And, addressing defiant Republicans, Neal stated: “I was here for the S&L (savings and loan) crisis. That was a bailout. I was here for” legislation to deal with “Wall Street” after the 2008 crash. “That was a bailout. They (executives) not only kept their jobs” after tanking the U.S. and world economies “but they got bonuses,” Neal said of the financial finaglers. “That was a bailout.”

“This is not a bailout.”

Without the legislation, Rita Lewis said, “It’s not just that one million families will be hurt,” including thousands in her home state of Ohio. “It’s our communities. It’s our state,” with a $6 billion annual income loss to Ohioans alone. That’s because pensions would be cut by 40% or more, if the retirees or their survivors get anything at all.

“Look at our faces. We matter. We are going to get what we worked for, what we paid for. It’s not a bailout. It’s a loan.”

“I’d ask anyone opposed to this, ‘Did you buy a house? Did you buy a car?’ You took out a loan. This is the same thing.”

Other unions and unionists joined the Teamsters at the outdoor press conference and in the crowded Ways and Means hearing room.

“We’re up here for those who need the attention,” said Larry Greenhill, political director of Electrical Workers (IBEW) Local 26 in Lanham, Md. Though his union’s multi-employer plan is solvent, the original congressional idea – approved in 2014 at the last minute – to have financially healthy plans “bail the others out” didn’t fly, he explained in an interview. “This is much better.”

“We’re here for our young brothers’ and sisters’ pensions,” said Local 26 member Jerry Lozupone. “Should we ever get in trouble, we want this to be there for us.” Added Amber Stevens of United Food and Commercial Workers Local 400: “When one is hurt, we all are hurt.”

The legislation, HR397, “offers a real, proactive solution” for the financially ailing plans and the

PBGC, Machinists President Robert Martinez wrote to the Ways and Means panel. It “protects the earned benefits of millions of retirees, workers and their families.”

Plans that get the loans would have to pay pensioners or their families – without benefit cuts – and pay interest on the loans for 30 years, then repay the loan, Martinez explained. Contributing employers would not be able to drop out, but benefits to retirees and survivors would not increase.

HR397 “is the only solution to date which appropriately and adequately addresses the multi-employer pension crisis by providing a lifeline to plans in critical financial status while maintaining the integrity of healthy plans and the PBGC without cutting into earned benefits,” Martinez wrote.



Posted In: Allied Approaches

Union Matters

Get to Know AFL-CIO's Affiliates: National Association of Letter Carriers

From the AFL-CIO

Next up in our series that takes a deeper look at each of our affiliates is the National Association of Letter Carriers.

Name of Union: National Association of Letter Carriers (NALC)

Mission: To unite fraternally all city letter carriers employed by the U.S. Postal Service for their mutual benefit; to obtain and secure rights as employees of the USPS and to strive at all times to promote the safety and the welfare of every member; to strive for the constant improvement of the Postal Service; and for other purposes. NALC is a single-craft union and is the sole collective-bargaining agent for city letter carriers.

Current Leadership of Union: Fredric V. Rolando serves as president of NALC, after being sworn in as the union's 18th president in 2009. Rolando began his career as a letter carrier in 1978 in South Miami before moving to Sarasota in 1984. He was elected president of Branch 2148 in 1988 and served in that role until 1999. In the ensuing years, he worked in various roles for NALC before winning his election as a national officer in 2002, when he was elected director of city delivery. In 2006, he won election as executive vice president. Rolando was re-elected as NALC president in 2010, 2014 and 2018.

Brian Renfroe serves as executive vice president, Lew Drass as vice president, Nicole Rhine as secretary-treasurer, Paul Barner as assistant secretary-treasurer, Christopher Jackson as director of city delivery, Manuel L. Peralta Jr. as director of safety and health, Dan Toth as director of retired members, Stephanie Stewart as director of the Health Benefit Plan and James W. “Jim” Yates as director of life insurance.

Number of Members: 291,000 active and retired letter carriers.

Members Work As: City letter carriers.

Industries Represented: The United States Postal Service.

History: In 1794, the first letter carriers were appointed by Congress as the implementation of the new U.S. Constitution was being put into effect. By the time of the Civil War, free delivery of city mail was established and letter carriers successfully concluded a campaign for the eight-hour workday in 1888. The next year, letter carriers came together in Milwaukee and the National Association of Letter Carriers was formed.

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There is Dignity in All Work

There is Dignity in All Work