Federal legislation introduced last month would lend cash to ailing pension funds so they can meet their obligations to current retirees and grow enough to serve people still working toward retirement.
The Butch Lewis Act, authored by Sen. Sherrod Brown of Ohio, received a full-throated endorsement from retirees, union leaders and lawmakers at a rally organized by Save Our Pensions-Minnesota on Saturday, December 2.
Over 100 people, mostly retired and active Teamsters in the beleaguered Central States Pension Fund, packed the United Food and Commercial Workers Local 1189 hall in South St. Paul to learn more about the new bill, which has bipartisan support.
“This is not a bailout,” Save Our Pensions co-chair Jeff Brooks told fellow retirees. “This is essentially a refinancing plan.
”The bill is named after the deceased Central States pensioner who led efforts to stop the fund from cutting benefits for 273,000 retirees. The Treasury Department rejected that so-called “rescue strategy” in May 2016, after Save Our Pensions-Minnesota and other grassroots organizations mobilized retirees in opposition to the plan.
Still, the fund claims it will run out of money sometime in the next 10 years, and it’s not the only U.S. multi-employer pension fund in trouble. An analysis by two actuarial consulting firms released earlier this year found 114 funds – covering nearly 1.5 million workers – in critical condition or worse.
The Butch Lewis Act would create a new federal office, funded by the sale of U.S. Treasury bonds, empowered to lend troubled pensions the money they need to remain solvent.
Funds would pay back the low-interest loans over 30 years. In exchange, they would be barred from making risky investments and required to deliver regular progress reports to federal administrators showing their progress in getting back on track.
For those plans needing additional help, the Pension Benefit Guaranty Corporation would be available to make up the difference.
Sen. Amy Klobuchar, in a previously recorded video address to Saturday’s rally, called the bill a “win-win” for retirees and pension plans alike. “No more stalling,” she said. “No more false promises. We need to act now.”
DFL Reps. Rick Nolan and Tim Walz attended the rally and pledged their support as well.
“If this country can’t provide a decent retirement to its people, then what do we stand for?” Walz asked.