ENDEAVOR — An Ohio senator’s bill has Wisconsin retirees feeling like the solution to their pension crisis is finally here.
Sen. Sherrod Brown, D-Ohio, is expected to introduce a bill next week that would create a new federal office in the U.S. Department of Treasury called the Pension Rehabilitation Fund. The new office would supervise loans to failing pension funds, paid for by private investors purchasing U.S. Treasury bonds.
“The Treasury is getting involved because they don’t want to see the PBGC go bankrupt on their watch,” said Bernie Anderson of the Milwaukee chapter of Protect Pensions.
Pension Benefit Guaranty Corp., which insures retirement incomes for 41 million Americans, announced late last year that it’s running at a $58.8 billion deficit. PBGC is on pace to go bankrupt by 2025 or sooner, it reported.
About 25,000 retirees in Wisconsin had faced immediate cuts of up to 70 percent of their Central States Fund pensions before the Treasury Department put those recovery plans on hold last year. Central States is a multiemployer pension fund with 400,000 participants in the U.S.
“This is the fix — it’s the only fix,” Bob Brockway said of the Brown bill. Brockway leads Endeavor’s Protect Pensions committee on the second Saturday of each month.
“Other plans cut pensions. That’s not what we want. We want it fixed.”
The plan would help a number of other failing pension funds, Anderson and Brockway said. Protect Pensions estimates 200 multiemployer plans are going bankrupt, directly affecting 1.4 million Americans.
“If a few go down, so will all the others,” said Anderson, who along with several other Protect Pension members is lobbying representatives in Washington, D.C. Brown’s bill will likely be introduced to various committees in the House and Senate on Thursday, Anderson said.
They hope that with bipartisan support, Brown’s bill will get passed before the end of the year.
Government Accountability Office investigations into the U.S. Department of Labor’s oversight of Central States have not yet been completed despite being launched in May 2016. Protect Pension groups had expected the probes to be completed in the summer of 2017.
The Department of Labor’s oversight of the Central States Pension Fund hadn’t been reviewed since it took the fund over in 1982.
During the Great Recession, Central States lost $12 billion in 18 months from 2008 to 2009 — more than 40 percent of its funds. Pension funds are supposed to stick to low- and moderate-risk investments, so the fund’s major losses that year have suggested to Protect Pensions members that criminal activity may have occurred.
The big picture, pension groups say, is how financial institutions since 2008 have received trillions of dollars in Troubled Asset Relief Program (TARP) funds, while failing pension funds like Central States have been ignored.
“You’d have to think this amount of time passing means the investigation will be thorough,” Anderson said of the GAO investigation that is now 18 months old. “I would think the longer it takes the better.”