Former House Speaker John Boehner, R-Ohio
[Editor's note: This story originally was published by Real Clear Health.]
By John Boehner & Joe Crowley
Real Clear Health
Four months ago at an event on the White House South Lawn, President Trump called truck drivers “the heroes of our nation’s great struggle against the coronavirus.” Secretary of Transportation Elaine Chao agreed, saying truck drivers will “be a critical part in helping our economy recover” as they deliver food, PPE, and other necessary supplies. In return Secretary Chao promised, “the administration is here for you. Just let us know.”
As leaders of the Retirement Security Coalition, we hear from truck drivers regularly. Loud and clear, current and former drivers are letting us know they are in the fight of their life not only against COVID-19, but also the simultaneous disappearance of their retirement plans. What essential blue-collar workers and their families need now from leaders in Washington, D.C. is multiemployer pension plan reform. Failure to include a solution to the pension crisis in the next round of economic relief would let these heroes down while severely limiting our nation’s ability to recover.
More than 10 million Americans belong to a multiemployer pension plan. This includes essential workers like truck drivers, grocers, and health care employees, and also retirees who were the essential workers of their day. So far in 2020, 117 multiemployer pension plans have submitted notice of critical or critical and declining status, and in the last year, seven plans were approved to cut the benefits covering a total of 35,173 participants. Even before the pandemic set the economy on shaky footing, experts agreed the Central States Pension Fund, one of the largest plans in the country, will collapse by 2025. That will in turn lead to the insolvency of the federal insurance agency for these plans, the Pension Benefit Guaranty Corporation (PBGC), within the next five years.
When plans start failing and cut benefits, participants are left with pennies on the dollar. For example, Anthony and Laura Caporino were forced to make drastic changes when Anthony’s Road Carriers Local 707 Pension Plan in New York was cut by 50 percent in 2016 and then by 70 percent less than a year later. Anthony worked six nights a week and gave up raises in exchange for contributions to his pension for 25 years. He calls their newfound situation “impossible,” but if the PBGC fails, the average benefit reduction will skyrocket to 94 to 98 percent.
“We know a lot of people who are not able to buy their medications, that are losing their homes. I actually worry about losing my home,” said Laura.
When Anthony’s benefits were cut, the Caporinos had to go back to work to make ends meet. Today, young workers in multiemployer pension plans are up against record unemployment and some belong to industries crippled by the pandemic, like music and entertainment. For older Americans, there are now tremendous health risks associated with going to work. A recent study by The New School found 2.9 million older workersbetween the ages of 55 and 70 have left the workforce since March, and they are likely to see a wage decrease of 41 percent if they are ever able to regain employment. Then there are the essential workers like the truck driving heroes who must keep working to keep the country running, despite facing fears about their own financial and medical wellbeing.
With so much uncertainty in the world right now, retirees and essential blue-collar workers need to know the pensions that were promised to them, and that they have earned, will be there to fall back on. Instead, the recent market volatility has caused “dramatic swings in plans’ funding status over the last six months.”
This is especially troubling because while it is difficult to attribute the downfall of the multiemployer pension system to any single event, stock market losses during the 2008 recession are chief among the causes. Additional reasons for failure include a complicated web of regulatory policies, declines in U.S. manufacturing and union membership, and employer bankruptcies – which, in a vicious circle of mutual demise, have often been exacerbated by pension failure.
It is important to know these plans have failed while following federal guidelines. Retirees and essential workers are facing devastating cuts through no fault of their own.
So, while pension plan participants are not to blame for this situation, they also should not be left to fix it alone. Members of Congress on both sides of the aisle have been calling for action for at least a decade – we should know because we were among them – but a bipartisan, bicameral compromise agreement has yet to materialize.
Allowing billions more dollars to drain from the economy while abandoning essential workers at a time like this goes against every fiber of who we are as Americans. We must come together behind a solution and make it a reality without delay.
Mr. Boehner, an Ohio Republican, served as a U.S. representative (1991-2015) and House speaker (2011-15).
Mr. Crowley, a New York Democrat, served as a U.S. representative (1999-2019) and House Democratic Caucus Chairman (2017-2019).
[Editor's note: This story originally was published by Real Clear Health.]
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