Don’t Expect Pension Solvency to Get Shored Up in Next Stimulus
Shoring up pension solvency got left out of the $2 trillion stimulus package enacted last month and the early signs aren’t encouraging for a bipartisan compromise coming together in the next one.
House Speaker Nancy Pelosi (D-Calif.) didn’t specifically mention pension relief April 3 while outlining the “next steps” in combating the coronavirus outbreak. A senior House Democratic aide told Bloomberg Law paying workers what they’re owed remains a top priority.
House Democrats wove a long-term loan program (H.R. 397) into their last proposed stimulus plan largely ignored by Senate Republicans. Senate GOP aides said pensions didn’t make the cut for stimulus because that deal was supposed to address more immediate needs. They declined to speculate about any future relief bills.
“It’s too early to say what that legislation might encompass,” a spokesman for Senate Finance Committee Chairman Chuck Grassley (R-Iowa) told Bloomberg Law.
Advocates are urging lawmakers to add underfunded union pension plans to their rescue efforts.
“If Congress doesn’t act now, the only difference between the COVID-19 pandemic and the upcoming pension failure in this country is that the COVID-19 pandemic hit here first,” board members of the National United Committee to Protect Pensions, a nonprofit working with financially distressed pension groups around the country, wrote in late March.
Mike Walden, NUCPP president and a participant in the failing Central States Pension Fund, said missing the stimulus train was not unexpected.
“I was told 3-4 weeks ago that pension relief would be discussed in Phase 4. So I was not as disappointed as some were,” he explained via email.
Walden said negotiators keep looking for middle ground between the House-passed Butch Lewis Act, which would provide 30-year loans to struggling pension plans, and a bundle of rate hikes and benefit cuts favored by Senate Republicans.
He predicted that the deadlock will continue because of the core constituency involves organized labor.
“It is still the word union that holds us back,” Walden said.
Retirement Security Coalition co-leaders John Boehner and Joe Crowley urged Congress to buck partisanship and do what’s best for the country.
“If we are looking to maximize the potential for a strong recovery after COVID-19 by reducing anxiety in our economy and replacing it with certainty and stability, then addressing the multiemployer funding crisis as part of the coronavirus response makes a lot of sense,” the former lawmakers wrote in an email.
During the March 27 vote on the stimulus bill, Pelosi said on the House floor that Senate Majority Leader Mitch McConnell (R-Ky.) had asked to “save” pension issues for “the next bill.”
McConnell has since cooled to the idea of moving another stimulus package.
His office did not respond to repeated requests for comment about addressing pension solvency.
A spokesman for Senate Health, Education, Labor and Pensions Committee Chairman Lamar Alexander (R-Tenn.) said pensions weren’t in play during the stimulus talks because the focus was on addressing the “harm caused to the country’s health care system and economy.”
“Senator Alexander is continuing to work on a bipartisan basis to seek a solution on the multi-employer pension problems for future legislation,” the HELP aide said.
A senior House Democratic aide declined to comment on bicameral pension talks, stating only that “we are not so committed to an approach that we can’t negotiate a solution.”
Reproduced with permission. Published April 6, 2020. Copyright 2020 by The Bureau of National Affairs, Inc. (800-372-1033) <https://bloombergindustry.com>