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Ohio Senator Proposes Bill to Shore Up Multiemployer Pension Plans


This week, it was announced that Democratic Senator Sherrod Brown from Ohio, is supporting a bill in Congress that would shore up multiemployer pension plans in his state.  Many of those plans have come under scrutiny as of late with predictions that many will go insolvent in the next decade if something is not done to prop them up.

Under the Senator's plan, a new Treasury Department office would be created that would oversee money lent to pension plans.  (This new office, the Pension Rehabilitation Fund, would supervise the loans that would come from the sale of Treausry bonds to private investors.)  Under this proposed legislation, no fewer than seven pension plans in Ohio would be able to borrow enough money to remain solvent and continue providing pensions to its retirees.  Senator Brown's proposal would essentially prop up a number of well known pension plans in the state including the United Mine Workers Pension, the Ironworkers Local 17 Pension Plan, and the Ohio Southwest Carpenters Pension Plan.  

Critics of this proposal have argued that it is an attempt by a Democratic Senator who has been rumored to be considering a run for higher office, using his position to placate his base and build good will among the labor unions.  It is quite possible this criticism is correct, but I believe the bigger issue is allowing these pension plans to continue to borrow money and further dig themselves into a hole.  At some point, these pension plans risk becoming insolvent if there is not a significant cash infusion to prop them up.  However, eventually (perhaps in the coming years), it will be time to pay the piper.  When that happens, some generation of retirees will be left holding the bucket and with a pension plan that has collapsed.  Is this proposed legislation simply plugging a leaking dam with a piece of gum?  At some point, allowing pension plans to continue borrowing money will no longer be a realistic solution...


For additional information:  https://www.google.com/amp/www.daytondailynews.com/news/local-govt--politics/bill-would-allow-pension-funds-borrow-money-cover-losses/l0kBYX4Wl4WrmG6OGyBCqL/amp.html

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