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Senate Republicans unveiled a plan yesterday to stabilize the failing pensions of 1.3 million miners, truckers, and other workers and retirees, setting the stage for a battle with House Democrats, who approved their own version of a fix over the summer, the Wall Street Journal reported. The workers and retirees belong to what are known as multiemployer pension funds, which are governed by collective bargaining agreements between a group of employers and a union. The most troubled plans are an estimated $100 billion short of what they need to pay out promised benefits — and the government insurance plan that backstops them is expected to run out of money by 2025. The new proposal by Sens. Chuck Grassley and Lamar Alexander would pave the way for the Pension Benefit Guaranty Corp., the government’s pension insurer, to take over a portion of some troubled plans’ liabilities, according to documents shared by Sen. Grassley’s and Sen. Alexander’s offices. The plans eligible for takeover would include two plans serving truckers and mine workers that are on the verge of running out of money. Following the takeovers, retirees would continue to receive benefits, but they would be cut by 10 percent, the documents show. The bill passed by House Democrats differs in that it would offer direct aid to the troubled plans in the form of forgivable loans. The Congressional Budget Office pegged the total price tag for the package at $48.5 billion but said it was difficult to predict the cost because it wasn’t clear under what circumstances the loans could be forgiven.

The private equity industry came under the microscope — and, at times, under attack — yesterday at a House Financial Services Committee hearing on private equity practices, Pensions & Investments reported. Some possible actions discussed at the hearing were several legislative proposals, including H.R. 3848, the "Stop Wall Street Looting Act of 2019," that would require private equity funds to share debt liability, prohibit capital distributions for two years after buyouts, create new marketing disclosure regulations, among other measures, a companion to legislation introduced by Sen. Elizabeth Warren (D-Mass). Other legislative proposals on the drawing board include one calling for board composition disclosure by private equity firms and the proposed Investment Adviser Alignment Act, which would require SEC reporting on fees and expenses, impose a fiduciary duty on private equity funds and allow communication among limited partners. Wayne Moore, trustee of the $58.4 billion Los Angeles County Employee Retirement Association, Pasadena, Calif., testified that more disclosure of private equity fees and expenses will help public pension fund investors. "My fiduciary duties include making sure we get what we pay for," he said. "Private equity is one of our best performing assets, but it is also our most costly asset," he told the committee, adding later that "information is critical, and we lack the information we need." A committee memo noted that state legislatures in California, Washington and Virginia have passed laws requiring public disclosure of information about private fund fees and expenses. Read more. 

To watch a replay of the hearing and to read prepared testimony, please click here. 

Among five financial services bills passed by the House of Representatives yesterday was the "Investor Protection and Capital Markets Fairness Act" (H.R. 4344) that would substantially strengthen the authority of the Securities and Exchange Commission (SEC) to recover the wrongful gains of securities law violators for investors, Investment News reported. The bill was introduced by Rep. Ben McAdams (D-Utah) and passed by a vote of 314-95. A recent Supreme Court decision, Kokesh v. SEC, capped the SEC's look back at five years. The bipartisan Investor Protection and Capital Markets Fairness Act would apply a 14-year statute of limitations for the SEC to seek so-called disgorgement, or the return of ill-gotten gains. The House legislation also would prevent disgorgement from being defined as "a civil fine, penalty or forfeiture." Defining it in one of those categories would limit the timeframe and monetary amount of disgorgement. Read more. 

Click here to read the full bill text. 

Two Pennsylvania state House representatives are hopeful that sexual abuse reform legislation they’ve proposed will pass today in the state Senate and eventually become law, the Altoona Mirror reported. But the measures have plenty of critics, chief among them the Roman Catholic church, which claims it is the prime target of the legislation. Church representatives have said that they have acknowledged the past sins of clergy sexual abuse, and they’re atoning for those with compensation funds and counseling for victims. They’ve said they’ve also instituted reforms to avoid future problems. State Reps. Jim Gregory (R) and Rep. Mark Rozzi (D) put forth the pair of bills earlier this year. Their bills, to be voted upon today in the Senate, would eliminate the statute of limitations on sexual abuse criminal charges and provide a two-year window on outdated civil lawsuits against alleged sexual abuse offenders. Both bills raise the age of victims who can file claims from 30 to 55. Rozzi’s piece refers to eliminating the criminal statute of limitations on sex abuse crimes.

A group of lawmakers wants to limit interest rates on consumer loans nationally at 36 percent, a move that worries the payday and online-lending industries, the Wall Street Journal reported. The legislation introduced yesterday in both chambers of Congress aims to extend to all consumers an interest-rate limit already in place for the military, its sponsors said. A rate cap of 36 percent would effectively eliminate traditional payday loans, which often charge interest rates exceeding 300 percent, as well as many installment loans offered online. While Democratic lawmakers are the primary supporters of the legislation, Rep. Glenn Grothman (R-Wis.), is backing the House bill. “It’s too hard to imagine in any way this business practice should be allowed,” he said. Grothman said that he expects the bill to soon get a vote in the House Financial Services Committee, but it isn’t clear what chances the measure has in clearing Congress. More than a dozen states have banned payday loans, and the ranks of states with tough limits on high-cost loans are growing. California last month enacted a law imposing a 36 percent cap on loans between $2,500 and $9,999. Voters in Colorado approved a 36 percent limit last year, following similar moves in South Dakota and Montana in recent years. For active members of the military, the Military Lending Act of 2006 placed a 36 percent limit on most loans and it was extended to credit card loans in 2017.

For more than four years, coal-state lawmakers joined miners in raising political pressure on Congress to shore up union pensions amid a crisis of coal industry bankruptcies and layoffs, the Pittsburgh Post-Gazette reported. Each time legislation was advanced by West Virginia Sens. Joe Manchin (D) and Shelley Moore Capito (R) — with vocal support from Sen. Bob Casey (D-Pa.) — the measures died without a vote, despite Capitol Hill rallies, public hearings and searing statements. This month, they finally got the elusive endorsement they had been waiting for, one that helps move the pension fix forward. Senate Majority Leader Mitch McConnell (R-Ky.) signed on to the American Miners Act, a bill that transfers excess funds from abandoned mine reclamation to shore up a United Mine Workers of America retirement plan, which is projected to go broke by 2022. McConnell said that there were a “startling” number of miners on pension plans that had gone bankrupt. He said that he had personally raised the issue with President Donald Trump last week. “The drastically underfunded pension plan presents an urgent crisis for entire communities of miners, retirees, and their families,” he stated. The coal miners’ fund is among many multi-employer pension funds managed jointly by employers and labor unions that have faced steep declines. The 2008 financial crisis eliminated a chunk of workers’ retirement savings and falling employment in some industries have eroded the fund’s ability to pay for benefits for a ballooning number of retirees. Earlier this year, the Western Pennsylvania Teamsters and Employers Pension Fund in Pittsburgh, facing insolvency in the coming years, received federal approval to cut pension benefits by 30 percent.