Budget Bill Is Mixed Bag for Pension and Benefit Universe

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By David B. Brandolph

Dec. 7 — A congressional must-pass continuing resolution budget bill is significant for the pension and health benefit world both for what the measure does and doesn’t include.

The bill includes short-term rather than permanent funding for the health-care benefits of retired coal miners whose benefits are slated to run out on Dec. 31. However, it excludes any rescue for the retired miners’ pension plan that is heading toward insolvency.

The bill is also missing a proposal to create a new composite pension plan design incorporating favorable aspects of both defined benefit and defined contribution plans. The concept of composite plans has been floated as a way of providing better options than 401(k) plans for participants of plan sponsors that intend to withdraw from multiemployer pension plans.

The House Appropriations Committee released the terms of the continuing resolution budget bill late Dec. 6. Notable in the bill for the multiemployer benefit plan community is a provision extending health plan benefits for United Mine Workers of America retirees only for the four-month life of the stopgap budget bill.

The bill’s failure to include a permanent solution for retired miners’ health and pension plan benefits drew an angry reaction from UMWA International President Cecil E. Roberts.

In a Dec. 6 statement, Roberts said the “inclusion of a mere four months of spending on health care benefits for retired miners and widows is a slap in the face to all 22,000 of them who desperately need their health care next month, next year and for the rest of their lives.”

The budget bill’s failure to include a proposal for the composite plan design, however, was sure to brighten the day of a coalition of unions, consumer organizations and pension plan retirees who have opposed the idea. They have lobbied against the proposal because they believe it will weaken the defined benefit plan system and harm the federal pension insurer Pension Benefit Guaranty Corporation.

On the other side of that issue is House Education and the Workforce Committee Chairman John Kline (R-Minn.), who it is widely believed has been seeking to have the proposal attached to the budget bill. The National Coordinating Committee for Multiemployer Plans, a coalition of labor and business groups, has also been lobbying for the composite proposal.

Mine Workers Decry Bill

In addition to the budget bill’s shortcomings regarding health-care benefits, Roberts said the bill’s “complete exclusion of any language to provide help for the pensions of 120,000 current and future retirees puts America’s coalfield communities on a glide path to deeper economic disaster.”

Don Stewart, a spokesman for Senate Majority Leader Mitch McConnell (R-Ky.), responded to Robert’s comments by telling Bloomberg BNA Dec. 7 that the funding for the retired miners’ health benefits is extended for the length of the continuing resolution. “It otherwise would have expired on Dec. 31,” he said.

Coal-state lawmakers led by West Virginia Democrat Joe Manchin and Ohio Republican Rob Portman have been working to shore up the UMWA’s health benefit and pension funds. The Senate Finance Committee in September approved legislation later introduced as S. 3470. It would help both programs by allowing transfers of unspent money from a fund to clean up abandoned mines.

Ohio Senator Sherrod Brown (D) has also been a vocal supporter of legislation to rescue the miners’ pension and health benefits.

In a statement to Bloomberg BNA Dec. 6, Brown said that McConnell is “turning his back on American coal miners. We had the chance to protect the retirement and healthcare coal miners have earned and save taxpayers money in the process, but Washington leaders chose to pull a bait and switch instead. This is everything that’s wrong with Washington.”

MPA Would Save Money

An aide to Brown told Bloomberg BNA Dec. 6 that S. 3470, known as the Miners Protection Act of 2016, would permanently fix the retirees’ pension plan and has the support of 60 senators. The aide, speaking on background, said that refusing to fix the pension issue now “will only make it more expensive later.”

As to the budget bill’s health-care funding fix, the aide said there’s “no reason for a short-term patch that leaves miners high and dry again in four months.” The aide said “we have a bipartisan permanent fix ready to go right now that not only doesn’t cost taxpayers any money, actually saves money.”

The aide was referring to a Congressional Budget Office estimate that enactment of the MPA “would reduce direct spending, on net, by $7 million and increase federal revenues by $67 million over the 2017-2026 period.”

Composite Plan Debate Needed

Opposition to attaching composite plan legislation to the continuing resolution has been mounting. First, the White House circulated a memorandum urging Congress to give the idea more thought. On Dec. 5, a group of 41 Democratic lawmakers submitted a letter to House leadership asking that the composite plan language be omitted from the budget bill.

Ohio representative Marcy Kaptur (D) was one of the leaders of that group.

In a Dec. 7 e-mail, Kaptur told Bloomberg BNA that it’s “very promising to see the released CR text does not include language to rush the composite pension proposal through Congress without regular order or debate.”

Furthermore, Kaptur said that “both chambers should engage in a productive debate, inclusive of the interests of retirees and workers, to address the deficiencies that face multiemployer pension plans in a comprehensive and not piecemeal way.”

To contact the reporter on this story: David B. Brandolph in Washington at dbrandol@bna.com

To contact the editor responsible for this story: Jo-el J. Meyer at jmeyer@bna.com

For More Information

A press release summarizing the continuing resolution is at http://appropriations.house.gov/news/documentsingle.aspx?DocumentID=394665.

Copyright © 2016 The Bureau of National Affairs, Inc. All Rights Reserved.

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