William B. Cassidy | Mar 24, 2010 11:16AM EDT
Speaking at a trucking company in his home state, Sen. Bob Casey, D-Pa., called for pension reforms that would strengthen multiemployer pension plans and gradually shift the responsibility for “orphaned” retirees to the federal government.
Casey unveiled the Create Jobs & Save Benefits Act of 2010 Monday, at the Carlisle, Pa., headquarters of YRC Glen Moore, the truckload subsidiary of YRC Worldwide.
“Multi-employer plans face unique challenges that are overburdening pension plans and the bottom lines of companies,” Casey said. “My legislation would help correct these problems to protect the pensions of workers and unburden companies stuck paying a crippling expense that threatens its existence and the jobs of its employees.”
Casey said the bill could cost the federal government between $8 billion and $10 billion.
In addition to YRC officials, representatives from ABF Freight System, Kroger and the Teamsters union attended the event. The companies belong to dozens of regional Teamster multiemployer pension funds, including the Central States Pension Fund.
Those plans have been weakened not only by the economic downturn, but the failure of many unionized companies that once supported them -- including major companies such as Consolidated Freightways. UPS paid $6.1 billion to withdraw from the plans in 2008.
That’s left YRC and ABF paying for the benefits of pensioners who never worked for them, but for businesses that may have closed years ago, making them “orphans.”
YRC suspended contributions to its pension plans last year under an agreement with the Teamsters, but will have to resume payments in January, and the company supports reform that would lower pension costs before those payments kick in next year.
Casey’s bill would tackle the orphan problem by allowing multiemployer plans to partition off those benefits in separate accounts, overseen by the Pension Benefit Guaranty Corp., an independent agency of the federal government. Within five years, the PBGC would take over those accounts.
The retirees’ pensions would remain fully guaranteed, Casey said in a statement. The bill also would allow multiemployer plans to combine resources to lower costs.
A similar bill was introduced in the House last year by Rep. Earl Pomeroy, D-N.D., and Pat Tiberi, R-Ohio.
Contact William B. Cassidy at wcassidy@joc.com.