Multiemployer Pension System Faces a Crisis Threatening Millions of Workers’ Benefits

By Charles Blahous | October 29, 2018

Earlier this year, federal lawmakers established the Joint Select Committee on Solvency of Multiemployer Pension Plans to address an intensifying crisis in multiemployer pensions. A primary focus of the Committee, which is co-chaired by Senators Orrin Hatch (R-UT) and Sherrod Brown (D-OH), is the projected insolvency of our national multiemployer pension insurance system operated by the federally chartered Pension Benefit Guaranty Corporation (PBGC).

PBGC’s multiemployer insurance program faces a $65 billion shortfall, and insolvency by 2025, threatening the vital pension benefits of workers. Worse yet, the projected insolvency of PBGC insurance is but one symptom of systemic underfunding in multiemployer pensions themselves, which has left $638 billion in worker pension benefits—over $60,000 per worker—without financing. The committee is required to vote on recommendations by the end of November. Last week, the Mercatus Center published my study of the crisis, which lays out the causes of the shortfall and offers a suggested framework for reform. This piece summarizes the principal findings of the study................To Read More.....