Federal tools could help prevent future pension crises
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In my home town of Dallas, the situation with the Dallas Police and Fire Pension Plan is appalling, but unfortunately not unique. Many pension plans across the country, both public and private, are headed to a similar or crueler fate. What is happening in Dallas is a crisis that needs to be solved, but it is just one example of what is on the horizon for other pension plans, both large and small, if some action is not taken. The time is now to provide those closest to the fall with the tools and flexibility to prevent or at least delay their pending demise.

Last Congress I introduced bipartisan legislation (H.R. 458) with Rep. Bill Pascrell (D-N.J.) not to fix the broken pension system in total, but to address one of the most troubled sectors of the American pension system. This legislation would allow the interested and affected parties in private, multi-employer pension plans to work collectively to devise reasonable solutions to avoid, or at least delay, impact with the iceberg directly in front of them, rather than head full steam into it because the federal government currently prohibits them from changing course.

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I am introducing the same legislation this Congress to allow the sponsors of multi-employer pension plans the flexibility to provide incentives to retain their currently contributing employers and protections for newly contributing employers, so these plans can maintain or even improve their source of funding. By maintaining and increasing employer contributions, these plans can extend their lives and more importantly continue to provide the pension benefits promised to their participants and beneficiaries, at no cost to the U.S. taxpayer. 

 

Right now, I have constituents in Dallas who are building infrastructure and creating jobs in Texas and across the country but who are preoccupied with the difficulties of accessing the necessary capital because of the amassing and suffocating contingent pension liability reflected in their financial statements. Union workers in New Jersey are concerned that any of their promised benefits will be unavailable and their contributions lost because of the looming insolvency of their pension plan brought on by the mass exodus of formerly contributing employers. My legislation enables those employers and the unions representing their workers to present a plan to the federal government that would keep the plan solvent for as long as possible and would require the government to provide a timely response — within at least 90 days. Right now the government has similar requests from plan stakeholders who have been waiting years for a response.

Again, my legislation does not solve all the predictable pension problems facing the country, but it does help one specific type of pension plan by forcing the government to approve or deny proposals in a reasonable time frame that have the ability to keep these plans solvent longer and maintain employee pensions without cutting those benefits for as long as possible. Regulatory rigidity should not be permitted to stand in the way of beneficiaries, unions and employers from working together to find a timely solution. 

Sessions represents Texas’s 32nd District. He is the chairman on House Committee on Rules.


The views expressed by this author are their own and are not the views of The Hill.