Kilili, Walberg focus on national pension crisis

Nov 30, 2017
Ranking Member Gregorio Kilili Camacho Sablan (D-NMI) (left) questions Pension Benefit Guaranty Corporation Director W. Thomas Reeder, Jr. Chairman Tim Walberg (R-MI) (center) called the hearing to look at the financial challenges facing the PBGC.
Kilili, Walberg focus on national pension crisis

Marianas Variety WASHINGTON, D.C. (Office of the CNMI Congressional Delegate) — U.S. Congressman Gregorio Kilili Camacho Sablan, ranking member on the House Subcommittee on Health, Education, Labor, and Pensions, and Subcommittee Chairman Tim Walberg, R-Michigan, led a hearing Wednesday on the financial challenges facing the Pension Benefit Guaranty Corporation.

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.

“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 plans are on the brink of insolvency,” Congressman Sablan noted in his opening statement at the hearing.

“These Americans worked a lifetime and earned their pensions. 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, Congressman Sablan became an original co-sponsor of a legislative solution that could prevent multiemployer plans from failing, while safeguarding retirees’ hard-earned pensions.

Wednesday’s hearing was an opportunity for PBGC’s 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 on Tuesday in preparation for the 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, being part of the solution is one of the responsibilities we have as members of the American political family.”