Legislation to repeal the Kline-Miller Multiemployer Pension Reform Act of2014 was introduced yesterday by Sen. Bernie Sanders,I-Vermont, and Rep. Marcy Kaptur, D-Ohio.

The Keep Our Pension Promises Act of 2015 would prohibittrustees of multiemployer pension plans from reducing retirees’monthly benefits.

Yesterday, the Treasury Department and the Pension BenefitGuaranty Corp. released interim rules laying out theprocedures for reducing retiree pensions.

Under the Multiemployer Pension Reform Act of 2014, which passedat the eleventh hour in the last Congress as a provision of theomnibus spending bill, retirees in the worst-funded multiemployerplans could see their pensions reduced to 110 percent of themaximum guarantee provided by PBGC.

The guarantees PBGC makes in its multiemployer insurance programare significantly less than those made in its single-employerprogram.

When PBGC takes over insolvent multiemployer plans, the agencypays participants an annual average of $13,000.

As a measure to avoid insolvency, those plans projected to beinsolvent in 20 years can apply to Treasury for the right to reducepensions for retirees. Under the law’s scheme, a pensioner whowould receive $1,000 from PBGC in the event of insolvency could seehis monthly benefit reduced by trustees to $1,100.

Sen. Sanders’ and Rep. Kaptur’s bill would safeguard promisedbenefits by creating a new legacy fund within PBGC that wouldinsure participants from companies that leave multiemployer plans,and subsequently stop paying into them, will continue to receivebenefits. The new program would be funded by tax increases on thewealthy.

Last year, PBGC reported a $42 billion debt in its multiemployerprogram, which covers roughly 1,400 multiemployer plans.

The Taft-Hartley Act of 1947 allowed labor unions to poolresources into a tax-deferred, collectively bargained definedbenefit retirement plans.

But most of PBGC’s multiemployer debt, which is calculated bythe cost it will be to cover plans that are projected to beinsolvent, comes from two large plans that account for $26billion of liabilities.

One of those plans is the Central States Plan, the biggestpension fund within the International Brotherhood of Teamsters.

Central States, which covers participants from a consortium ofabout 1,900 trucking companies, suffered a massive hit in 2007 whenUPS paid a lump-sum of $6.1 billion to leave the plan.

In the Central States Plan, one worker supports about fourretirees. It covers benefits for about 410,000 active and retiredunion members.

The plan reportedly has about $18 billion in assets and $35billion in liabilities. It pays $2.8 billion annually in benefitsto retirees.

This past April, trustees of the plan informed Teamster unionleaders and members that they plan to apply toTreasury to reduce retirees’ payments in order to staveinsolvency.

The Teamsters president, Jim Hoffa, was in Washington D.C. forthe announcement of the Keep Our Pension Promises Act. Other unionleaders, retiree members, and pension rights advocates joinedhim.

“Retirees and workers who have played by the rules shouldreceive the benefits they were promised,” said Hoffa at theannouncement. “The Teamsters thank Sen. Sanders and Rep. Kaptur fortaking steps to ensure the government repairs some of the damagedone by big banks to these retirement plans.”