Out to save the retirement plans of over 1.3 million pensioners, the U.S. House of Representatives passed legislation that seeks to address a nationwide multi-employer pension funding crisis by providing low-interest loans to help fund the institutions, Chief Investment Officer reported. Called the "Butch Lewis Act," named after a Vietnam War veteran and pension activist, the bill seeks to address a situation that advocates say continues to get worse. It would establish a new division in the federal government to monitor and issue low-rate bonds and loan the proceeds to pensions. “These plans are failing at an alarming rate,” says AARP, an advocate for the bill. “About 12 percent of workers with vested multiemployer pensions are in plans expected to run dry within 20 years. And the plans’ weak safety net is getting weaker.” It’s a downward-spiraling issue as union membership numbers decline and contribution rates fall. Union employers in industries vulnerable to non-union competition, such as mining and construction, are losing business and contributing to pensions less as a result. Some companies such as lollipop maker Spangler Candy have had to shore up additional funds in recent years, nearly doubling its contribution rate, with approximately 54 percent of its contributions diverted to individuals who’ve never worked for them in the past, said House Ways and Committee Chairman Richard Neal (D). The bill passed the House garnering support from every Democrat and 29 Republicans, through a 264-169 vote. The bill faces uncertain prospects in the Senate as some Republicans have called the measure a “bail-out” that doesn’t address core issues that brought the problem about in the first place.
