Active and retired members of the International Brotherhood of Teamsters received a boost after the U.S. House of Representatives approved legislation to keep multiemployer pension funds from failing.
The Rehabilitation for Multiemployer Pensions Act (H.R. 397) passed the chamber on July 25 by a vote of 264-169 and now advances to the U.S. Senate.
The measure is considered critical by some to save more than 300 multiemployer pension funds across the country — including the Teamster Union’s Central States Pension Fund, which includes over 30,000 employees of LTL carriers ABF Freight [NASDAQ: ARCB] and YRC Worldwide [NASDAQ: YRCW].
“After years of tireless work by Teamster retirees, members and local union officers, the House today rewarded their efforts by passing this critically important legislation,” said Teamsters General President Jim Hoffa. “Lawmakers cannot delay any longer. This legislation must now be approved by the Senate so that American workers retain their hard-earned retirement security.”
The Central States plan is in “critical and declining status” and is projected to run out of money by 2025 or sooner, leaving it unable to pay benefits to current and future retirees, according to the fund.
H.R. 397, introduced in January, would create a new agency under the U.S. Treasury Department that would sell bonds in the open market to large investors such as financial firms, with proceeds used to bolster failing multiemployer pension plans as part of a 30-year loan program.
“This is a runaway freight train coming down the tracks that we need to fix quickly,” Teamsters Union International Vice President John Murphy told FreightWaves.
“The debate before the vote on this legislation was amazing, with Democrats trying to let Republicans know this is something that has to be dealt with now, with every year of delay meaning bigger dollar numbers that have to be made up,” Murphy said. “The reality is, if the government doesn’t intervene, the plans will fail, the [Pension Benefit Guaranty Corporation] will fail and the loss of economic activity into local economies will be in the billions of dollars over time.”
Similar legislation introduced in 2017 failed to pass the House of Representatives when Republicans controlled the chamber. Getting the bill passed in the Senate, with Republicans still in control, “will be a tough fight,” Murphy said. “But a major reason it passed the House this time was because of a major lobbying effort by Central States. We plan to apply that same effort in the Senate.”