A Congressional Joint SelectCommittee on Multiemployer Pension reform will not reportlegislation that would rescue up to 130 collectively bargainedpension plans, according to an email obtained by BenefitsPRO.(Photo: Shutterstock)

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[Update: A previous version of this story mistakenlyreported the U.S. Chamber of Commerce backs the Butch LewisAct.]  A Congressional Joint SelectCommittee on multiemployer pension reform will not reportlegislation that would rescue up to 130 collectively bargainedpension plans, according to an email obtained by BenefitsPRO.

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The Joint Select Committee on Solvency of Multiemployer PensionPlans, created earlier this year, was comprised of 16 lawmakers from the House and Senate—eightRepublicans and eight Democrats.

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A November 30 deadline was set to report bipartisan legislation.But Republican and Democrat members could not agree on an“equitable” solution, despite getting “close” to a compromise,according to an email from an aide close to the committee.

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Sen. Sherrod Brown, D-OH and retiring Sen. Orrin Hatch, R-UTco-chaired the Committee.  Last year, Brownintroduced the Butch Lewis Act, which would channel low-interestrate loans to pensions facing imminent insolvency over a30-year period. Under the bill, retirees would not suffer cuts topensions.

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But the bill met resistance from Republicans on the Committee,who charged the legislation did not create the reforms to pensionfunding needed to avert a future crisis.

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The Congressional Budget Office, which produces cost estimatesof legislation after proposals emerge from committees, did producetwo preliminary scores of Butch Lewis. The first put the cost ofthe bill at $100 billion. But a second score reduced the cost to $36billion.

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The Committee's inability to report legislation comes in spiteof an array of economists that have warned of massive macroeconomicimplications of letting the pensions, and the Pension BenefitGuaranty Corp.—the federal agency charged with insuring definedbenefit plans—fail.

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A discussion draft of legislation, released last week, includedtwo alternative proposals to the Butch Lewis Act that would reducepensions in plans that need assistance by 20 percent. PBGC'smaximum guarantee for a worker in a collectively bargained planwith 30 years of service is about $13,000 annually. When PBGCexhausts its cash reserve in its multiemployer insurance program bythe end of 2025, workers in failed pension plans will seeretirement benefits cut up to 98 percent of scheduled payments.

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Upwards of 15 percent of roughly 1,400 multiemployer plans areprojected to be insolvent within 20 years.

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Rep. Nancy Pelosi, D-CA, who will likely be made the majorityleader when Democrats take control of the House of Representativesin the 116th Congress, is expected to reintroduce the Butch LewisAct early next year. The bill's passage in the House would be allbut guaranteed. But it would need 60 votes in the Senate, and asignature from President Trump, to become law.

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Another possible option is for lawmakers to incorporate fundingand reforms for pensions in the spending bill currently beingdebated.

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READ MORE:

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Union pensions: Will Congress kick the can on asolution?

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Improvement in PBGC multiemployer deficit toolittle, too late

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Employers say multiemployer plans needtaxpayer-funded loan

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Flailing multiemployer pension plans need 'tens ofbillions' in cash

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Nick Thornton

Nick Thornton is a financial writer covering retirement and health care issues for BenefitsPRO and ALM Media. He greatly enjoys learning from the vast minds in the legal, academic, advisory and money management communities when covering the retirement space. He's also written on international marketing trends, financial institution risk management, defense and energy issues, the restaurant industry in New York City, surfing, cigars, rum, travel, and fishing. When not writing, he's pushing into some land or water.