July 12, 2018, Fairfax, Va.—Americans for Limited Government President Rick Manning today issued the following statement in anticipation of the Joint Select Committee on Solvency of Multiemployer Plans completing its work on a plan to shore up solvency of the Pension Benefit Guaranty Corporation:
“If there is going to be a low interest rate loan program to undergird the massive soon-to-be insolvent multiemployer pension plans, then the unions must have skin in the game and be in 50/50 with corporations on any risk pool that might be created in the event of defaults. There should also be full transparency including annual external audits for all affected multiemployer pension plans and there must be a way for companies to exit and decertify the union by replacing the lump sum payment with payments over a longer period of time. Finally, there must be a commitment to unwind and eliminate over time the unsustainable defined benefit formula that caused the insolvency in the first place and became a false promise to pensioners.
“At the end of the day, there must be no bailout. In the event such a loan program and risk pool fails to shore up the system, the losses must be borne by the pensions via benefit cuts — not by taxpayers. This is a predictable crisis that can be averted. As the Baby Boomers retire, an effort should be made to reform the broken multi-employer pension system now before it catastrophically fails and the ensuing wave of pensioners bankrupt the Pension Benefit Guaranty Corporation.”
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