The Multiemployer Pension Reform Act: Inadequate Response to Looming Pension Fund Insolvency
According to the Pension Benefit Guarantee Corporation’s (PBGC’s) own 2015 annual report, the government entity tasked with insuring private-sector pensions faces a $76.3 billion shortfall. In other words, the backstop that Congress created to prevent workers from losing their promised pensions could be worthless. Without further, significant reforms, the PBGC’s multiemployer program will become insolvent in 2025, and millions of beneficiaries of insolvent pensions will be left with mere pennies on the dollar in promised benefits.
Although Congress enacted some well-meaning reforms in the 2014 Multiemployer Pension Reform Act (MPRA), these reforms will not prevent the insolvency of many large multiemployer pension plans or the PBGC’s multiemployer program. Despite passage of the MPRA, the PBGC’s multiemployer program deficit rose by $9.9 billion in 2015 to $52.3 billion, and it is still projected to be insolvent within 10 years. The MPRA was a step in the right direction, but more significant reforms are needed to protect private pension beneficiaries from a complete loss of pension benefits and to protect taxpayers from a bailout of private pensions.