Debbie Wasserman Schultz And The Crisis in Workers’ Retirement Funds

[AntiBank]

http://www.huffingtonpost.com/tim-canova/debbie-wasserman-schultz-_2_b_10663414.html

In November 2014, Democrats suffered one of the worst midterm election defeats in American history, resulting in the largest Republican majority in nearly a century. Debbie Wasserman Schultz did not lose her job as head of the Democratic National Committee (DNC) because of this disastrous failure. Instead, as a member of the House, Wasserman Schultz voted weeks later with a lame-duck Congress for a bill that now jeopardizes the retirement savings of about 400,000 Americans workers, including thousands of Teamsters and other union members.

Unfortunately, Wasserman Schultz and her Republican allies who voted for the Multiemployer Pension Reform Act (MPRA) never questioned the false claims that the measure would prevent retirement plans from becoming insolvent. Perhaps this is because the demise of these pension funds would serve the Wall Street interests that have contributed so much money to her campaigns. Prior to the MPRA, a retiree’s pension could not be reduced unless the plan ran out of money. The MPRA, for the first time, allows for a reduction in pension payments prior to a plan’s insolvency. Wasserman Schultz ignored warnings that this would create a dangerous precedent that could open the door for similar cuts to Social Security and single-employer pension plans.

Under this new legal regime, the giant Central States Pension Fund (CSPF) applied last September to impose drastic benefit cuts on its 400,000 participants, claiming that the fund is projected to become insolvent in ten years. The Treasury Department rejected this plan and called for more reductions in benefits. Many of the CSPF recipients who rely on their pensions to pay mortgages and buy groceries, are now left hanging — unsure whether the fund will go under and perhaps bankrupt the Pension Benefit Guarantee Corporation, the federal agency that insures workers’ pension plans.

Wasserman Schultz and her Republican colleagues who voted for the MPRA never asked the hard question of why these once-robust pension plans are now facing potential insolvency. Much of the distress in these funds can be traced back to the 2008 financial collapse. In addition to huge investment losses, many companies went bankrupt, thereby withdrawing from the multi-employer plans, and putting pressure on those remaining to fund existing obligations. Meanwhile, a sharp decline in U.S. jobs caused plans to suddenly have a dangerously high ratio of retirees to active workers.


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[Hoyt]

1. If not mistaken, this is a pension plan managed by the Teamsters. It has been investigated for

mismanagement and corruption for years. I hope there is some equitable resolution, but I'm not sure blaming it on Schultz or anyone else is the solution.

[bluedye33139]

2. It's likely I would vote for this bill

It's likely that I would have voted for this bill, too. If a pension fund is insolvent, there should be a mechanism for it to seek relief as it approaches complete insolvency. The statute has that weird provision that compels Treasury to evaluate applicants and to determine that the relief they are asking for will be enough to stabilize the fund, though. Do I really want Treasury imposing austerity in this heavy-handed manner? I could possibly be talked out of voting for this bill, if I had been in Congress.

I guess I'm just not seeing how the Multiemployer Pension Reform Act would have been an automatic "nay" on its own merits.