Defined benefit pension plans have long been favored for retirement because they promise a guaranteed level of income and don’t require individuals to manage assets. It’s a painless way for retirees to enjoy their golden years. That is, unless the plan goes bust.

Unfortunately, that’s the condition a number of pension plans are close to being in, particularly so-called “multi-employer” defined benefit plans. These plans typically cover unionized workers who move from job to job throughout their careers. It is no exaggeration to say that these plans face a crisis. There is currently a shortfall of more than $124 billion in these plans. Roughly 1,141 of these plans, covering 1.3 million workers, face more than $36 billion in shortfalls and are likely to start going bankrupt in as little as five years.

{mosads}One might think that employers in these plans could simply pay more to shore them up. Perhaps, but the amounts are so large that they could cause many employers to go into bankruptcy, with a snowballing effect on jobs and the economy. Not to mention, the government backstop for these plans – the Pension Benefit Guarantee Corporation (PBGC) – is itself predicted to go bust by 2025. 

So, we face a dilemma. We can let workers lose their retirement benefits, benefits they have been promised their whole careers would be there, look on as employers go broke and shut their doors, and perhaps see taxpayers called on to bail out the PBGC. Or, we can figure out ways to solve this problem.

Congress has decided to do just that, establishing a bipartisan committee tasked with drawing up legislation by the end of the year. The U.S. Chamber of Commerce and the National Coordination Committee for Multiemployer Plans (NCCMP) have issued a set of joint principles to aid the committee in its work.

First, all members of the Committee must recognize that rescue legislation is urgently needed. We can no longer kick the can down the road.

Second, these struggling plans will need financial assistance. Our recommendation is long-term, low-interest loans that will protect taxpayers from financial liability. 

Third, all parties will have to be part of the solution, including plan beneficiaries and participating employers.

Fourth, while the PBGC may ultimately need more money, in the form of increased premiums paid by employers, these increases must be evaluated after tools to restore the solvency of these plans are put in place.

Finally, composite plans must be authorized so that healthy multiemployer plans can stay that way. Composite plans are a hybrid between traditional pension plans and individual accounts plans that can bridge the gap between current existing options.

Without substantive and timely multiemployer plan reform, businesses will go broke, workers will be left without benefits, and taxpayers may face a hefty bill. It is critical that Congress gets this right and take steps that will not only restore the system of today, but also allow it to remain solvent in the years ahead. The Chamber and NCCMP stand ready to help. The time to act is now.

Aliya Wong is the Executive Director of Retirement Policy at the U.S. Chamber of Commerce.