The call went out Monday Nov. 26: our pensions are
|IBEW members had meetings with more than 300 legislators including Senate Minority Leader Chuck Schumer of New York, here with Political and Legislative Director Austin Keyser, International Secretary-Treasurer Kenny Cooper, Chuck Mack from the Teamsters and International President Lonnie Stephenson.
Congress was considering a law that would put the pensions of tens of millions of union workers at risk, and the rumors were that they would be taking it up in days, if not hours.
“There was no time,” said International President Lonnie R. Stephenson. “We had to be heard and it would take an army.”
By Wednesday, more than 200 business managers and pension trustees, many of whom had traveled thousands of miles to Washington, fanned out across Capitol Hill to more than 300 meetings.
“This is the highlight of my career, to be able, as a Brotherhood, to pull off what we did today,” Stephenson said at the day’s end. “We didn’t ask to be at the table, we demanded it. They knew we were coming, they knew we were here, and now they know what we think. We were heard, and we are not done.”
The alarm bells sounded over Thanksgiving weekend. A special committee composed of House and Senate members from both parties had a Nov. 30 deadline. After months of hearings, a solution was needed for a looming crisis. A handful of multiemployer pension plans were in trouble; they had been failing for years. None of the IBEW’s nearly 120 local- or international-run plans were among the worst off.
A decade of hard work and investment by IBEW members had left our plans on solid ground nearly a decade after the banks torched the economy and gutted our funds of billions of assets.
“Our plans are among the strongest in the nation,” said International Secretary-Treasurer Kenny Cooper. “We have played by the rules and our members’ retirement savings are secure. We absolutely will not let Congress put that promise at risk.”
Close to 100 plans are on the brink, most in industries hollowed out by policies that left working people gasping, like unionized trucking, mining and food service. What those plans owe far exceeds the assets of the Pension Benefit Guaranty Corporation, a federal agency that all pension plans pay into for something akin to insurance. If the PBGC went under, every plan would be at risk.
|Hundreds of IBEW leaders listen to Political and Legislative Department Director Austin Keyser before they blitzed Capitol Hill to save multiemployer pension plans.
When the bureaucratically-named Joint Select Committee on the Solvency of Multiemployer Pension Plans was convened in April, there was hope that the size of the problem and the fact that it grew more expensive everyday it went unsolved might overcome the entrenched partisanship of the 115th Congress. One of its co-chairs, Ohio Sen. Sherrod Brown, expressed guarded optimism.
“This is not a partisan issue,” Brown said in the opening session. “We need to lock arms to reach the solution for workers and businesses who did things right. They are not looking for a handout or a bailout; they’re asking for what they earned.”
The committee was formed in response to a plan in the Trump Administration’s budget proposal, issued last February. Membership included Folsom, N.J. Local 351’s Rep. Donald Norcross, the only electrician in Congress. That plan would have saved the PBGC but at the cost of crippling the healthy plans, taxing people who received pensions and forcing pension contributions to go up without increasing benefits.
The entire cost of the sick plans would be borne by healthy plans, even though healthy plans did nothing to cause the problem. The impact on the IBEW’s plans would have been catastrophic.
“It’s like saving a ship by throwing the passengers overboard,” Cooper said at the time. “Just one part of the proposal would have cost just one of our plans –the National Electric Benefit Fund – $2 billion a year.”
After months of hearings across the country, the committee’s Nov. 30 deadline loomed with no word about its proposal. Then Political and Legislation Department Director Austin Keyser began to hear rumblings that the recommendation was coming, and it would look almost exactly like the one that had been killed in February.
“The zombie was back,” he said. “That’s when President Stephenson and Secretary-Treasurer Cooper put out the call.”
Within 24 hours, Keyser’s staff arranged more than 300 meetings in the House and Senate, almost 60 percent of all members. IBEW leadership flew in from nearly every state. They were handed a schedule, talking points and an information packet for every office they visited, from California Democrat Rep. Nancy Pelosi to Texas Republican Michael Burgess.
Stephenson himself made his case to Sen. Brown and Senate Minority Leader Chuck Schumer.
“We didn’t just tell them what we wanted stopped,” Stephenson said. “They needed to understand that there was a sensible proposal out there that everyone should get behind.”
The proposal is the Butch Lewis Act, which would provide long-term, low interest federal loans to troubled plans, similar to the rescue programs that were used to save AIG, the steel and airline industries. Cost estimates vary from $7 to $34 billion, but the number is far lower than the $700 billion Troubled Asset Relief Program that bailed out the banks a decade ago or the $135 billion federal bailout of mortgage insurers Fannie Mae and Freddie Mac.
“And unlike the bank bailouts, the pensions plans would only receive federal loans that must be paid back,” Cooper said.
Some of the offices were highly receptive, said San Francisco Local 6 Business Manager John Doherty who visited the offices of Pelosi and California Reps. Pete Aguilar, Mike Thompson, John Garamendi and Sen. Diane Feinstein.
“Some of them knew as much about this as I did. Some knew more,” he said. “And for some, it was really important that we put this on their radar, so they knew to watch out for it. We’ve killed this proposal before. They have to expect it to come back again.”
Such were the numbers that throughout the day, IBEW delegations passed one another in hallways. As The New Jersey delegation was headed into a meeting with Sen. Cory Booker, the San Diego Local 569 Business Manager Nicholas Segura was headed to see Sen. Kamala Harris.
Milwaukee Local 494 Business Manager Dean Warsh crossed paths with Doherty early in the day.
Local 494’s pension plan has been in recovery mode for a decade, Warsh said. If the Republican plan passed, he said, they would go from perfect health to only 90 percent funded, suddenly subject to higher insurance fees that would make getting back where they were harder, if not impossible.
“We were at 100 percent before the crash and fell as low as 88 percent funded,” Warsh said. “But we made the decision to shore up the fund, voted to put three times more in than we did before 2008. We did the right thing. Now they want to do this?”
At the end of the day, Keyser said the feeling was that the bill was dead.
“Deals came undone,” he said. “But we have seen some terrible things in omnibus bills that come up just as everyone is rushing home for the holidays. We cannot live with this, and it may come back.”
The good news is that there were signs throughout the three House office buildings that a new day was here. Hallway after hallway was clogged with desks and chairs and staff from newly-elected representatives were wandering in and out of offices, taking notes, making choices.
After every election, offices are shuffled, updated, repainted and readied for new occupants. A new majority was elected in November and many of those freshly-painted rooms are going to Democrats.
“November was the first step in a correction,” Rep. Norcross said. “We have a lot of new friends up here.”
The job, Stephenson said, is to remind them who got them there.
“We may need to come back in a month, and a month after that and a month after that. It’s not dead until a real solution is passed,” he said. “The good news is, the House is now in the hands of our friends. Now we have to keep our friends accountable.”
Now It’s Your Turn
While the IBEW and our labor brothers and sisters were successful in stopping the Joint Select Committee’s proposal, which would have:
- Taxed retirees’ pensions
- Required active workers to pay much larger contributions to their pension funds
- Changed the accounting rules pensions use to plan, increasing costs and uncertainty
- Allowed for the creation of hybrid plans made up of pensions and defined contribution plans like a 401k that shift all the risk to workers, raise costs and will leave the original pension underfunded.
The at-risk pensions plans followed the rules and the instruction of their actuaries. They are in trouble for the same reason working people across the country are struggling: the disappearance of good, union jobs.
Healthy union pensions plans didn’t cause that problem. We fought it every step of the way. We shouldn’t be forced to pay for an economy that failed working people by design.
Not everyone can come to D.C. to speak to their representatives, but everyone (except the resident of Washington D.C. natch) can pick up the phone or visit a district office and let them know you oppose any proposals that would unfairly tax and weaken healthy multiemployer pension plans.
There are solutions out there. Urge them to look at the Butch Lewis Act, named after a Teamster who was so concerned about the lost income he faced when his pension plan went under that he had a stroke and died.
Read more about the Butch Lewis Act here. Find your Congressional Representatives here.