Casey bill to save union pensions to get panel hearing
Thousands of Teamster retirees in Western Pennsylvania would benefit from a controversial bill to protect pensions of union members covered under multi-employer plans.
The Western Pennsylvania Teamsters Fund, covering 168 employers and 24,000 retirees, and the Central States Pension Fund, which covers 210,000 retired Teamsters and their spouses, are the two multi-employer pension funds nationwide whose participants would be covered under the bill sponsored by Sen. Robert P. Casey, D-Scranton.
Pension plans deemed in "critical" condition -- likely to become insolvent because employers cut contributions or because of a reduction in the number of employees contributing to a fund -- would be protected by the legislation.
Casey's bill was criticized Wednesday by a contractors' group that claimed the legislation was tantamount to a government bailout for union pension funds.
The bill, titled the Create Jobs & Save Benefits Act, would turn pension fund obligations covered by private employers into a taxpayer obligation that will benefit unions, said Brett McMahon, vice president of Miller & Long Concrete Construction Inc. of Bethesda, Md.
Opposing the bill are advocacy groups supported by the Associated Builders & Contractors Inc., a Washington-based group of contractors employing non-union workers.
Casey's bill is scheduled for a hearing today before a Senate committee.
The bill could cost $8 billion over 10 years to provide protection for defined-benefit retirement benefits of workers whose employer goes bankrupt or no longer contributes to a multiple-employer pension plan, said Casey aide Larry Smar. The Pension Benefit Guaranty Corp., a federal agency insuring pensions, would guarantee the benefits.
There are 1,500 multi-employer pension plans in the country with a total unfunded pension liability of $165 billion, according to the critics. The PBGC said plans for which it is providing benefits had $898 million in unfunded liabilities in 2009.
McMahon said the legislation would allow the government to use taxpayer funds to cover costs. But Smar said there are several options for covering the costs of workers whose company dropped pension contributions.
The PBGC provides a maximum of $12,870 in annual benefits to retirees under a multi-employer pension plan, but would have to provide full benefits under Casey's bill, McMahaon said.
The International Brotherhood of Teamsters in Washington, which supports the bill, declined to comment.
Yesterday, the PBGC said it took over paying benefits for the Printing Industry and Union Consolidated Pension Plan in Pittsburgh, which covers 300 workers and retirees in the printing industry.
The plan became insolvent in March, and the agency sent an initial payment of $69,200 to ensure that the plan's 206 retirees receive their benefits. The agency estimates its total financial commitment to the plan will be $3 million.