Which brings us to yesterday’s proposal. It is named the “Butch Lewis Emergency Pension Plan Relief Act of 2021” but it is not the “Butch Lewis Act” and it is not the “Emergency Pension Plan Relief Act of 2021.”
There are some commonalities, to be sure. The new bill maintains the provision which allows plans to use the “zone” status from prior to the pandemic to avoid designation as endangered, critical, or critical and declining. It allows plans to stretch their “funding improvement and rehabilitation period” from 10 to 15, or from 15 to 20 year, depending on the plan’s particulars. It permits plans to amortize asset losses over 30 years to reduce their required contributions — plus, added in the new version, the option to also defer recognizing “other losses related to the virus SARS-CoV-2” such as reductions in employment or increases in retirements.
But there’s another change that’s substantial. In the prior, HEROES Act version, the drafters maintained the concept of the “partition,” shifting liabilities for a portion of an at-risk pension to the PBGC and funneling extra funds there to be able to make those payments; to be sure, that version had planned to increase the maximum benefit substantially in order to protect retirees from benefit cuts, but the structure remained somewhat similar. The new proposal simply sends cash to eligible ailing multiemployer plans directly.
A straightforward read of this, then, is that every penny of pension benefits due to be paid to present or future retirees, for the next 30 years, would be paid by the federal government.
Author(s): Elizabeth Bauer
Publication Date: 9 February 2021
Publication Site: Forbes