Kilili, Walberg focus on national pension crisis

HELP Subcommittee ranking member Gregorio Kilili C. Sablan (Ind-MP), left, questions Pension Benefit Guaranty Corp. director W. Thomas Reeder Jr. on how pension promises made to hundreds of thousands of retirees in multiemployer pension programs can be protected, as subcommittee chair Tim Walberg (R-Michigan) look on. The hearing last week looks at the financial challenges facing the PBGC. The federal agency has $2 billion in assets, but $67 billion in pension liabilities. (Contributed Photo)

WASHINGTON, D.C.—The House Subcommittee on Health, Education, Labor, and Pensions held a hearing last week on the financial challenges facing the Pension Benefit Guaranty Corp.

The PBGC is a federal agency that insures private-sector retirement plans nationwide. Plans pay a premium for the insurance; but, as more plans are revealed to be underfunded, demands on PBGC to provide backup have exceeded the financial capacity of the agency to protect retirees.

Delegate Gregorio Kilili C. Sablan (Ind-MP), a ranking member of the subcommittee, joined subcommittee chair Tim Walberg (R-Michigan) at the Thursday hearing.

“I believe we should be guided by the simple principle that it is not the fault of the workers or the retirees’ that their pension plan is on the brink of insolvency,” Sablan noted in his opening statement at the hearing.

“These Americans worked a lifetime and earned their pension. American workers don’t want a bailout, they just want the pension promise that was made to them to be upheld.”

According to the PBGC’s annual report for 2017, the multiemployer pension programs backed by the government insurer have $2 billion in assets to cover $67 billion in pension liabilities—an increase of $6 billion year-over-year. The agency is looking to Congress for help before it runs out of money in 2025. A pension collapse could have a negative ripple effect throughout the U.S. economy.

Multiemployer plans are set up by two or more employers and a union, typically in the same or related industries, such as construction or transportation. The plans are run by a board of trustees, with an equal number of employer and union trustees.

After almost a year of work, meeting with pension managers and with employee and retiree representatives, Sablan became an original co-sponsor of a legislative solution that could prevent multiemployer plans from failing, while safeguarding retirees’ hard-earned pensions.

Thursday’s hearing was an opportunity for PBGC director W. Thomas Reeder Jr. to comment on the multiemployer problem in general and on specific legislative solutions, such as H.R. 4444, the Rehabilitation for Multiemployer Pensions Act, which Sablan has backed.

Sablan also met with Reeder separately last Tuesday in preparation for Thursday’s hearing.

With increasing seniority, the Northern Marianas congressman has gained increasing responsibilities to take on national issues.

“The multiemployer pension crisis is one of the most complex issues I have faced in my nine years in Congress,” Sablan said. “With billions of dollars and the lives of hundreds of thousands of workers and retirees at stake there is a serious need for action and little room for error.

“Even though my own constituents in the Marianas are not directly affected by loss of pensions, the economic fallout from the collapse of large-scale pension funds would affect the pocketbooks of all Americans everywhere.

“Addressing this looming crisis and being part of the solution is one of the responsibilities we have as members of the American political family.” (PR)