1What is the Butch Lewis Act and what is our Retiree Representative doing about it?
I have received a number of calls lately regarding the “Butch Lewis Act of 2017”, which is a bill that was introduced in Congress on November 16, 2017 by Senator Sherrod Brown (Democrat-Ohio) and Representative Richard Neal (Democrat-Massachusetts). If passed into law as drafted the Butch Lewis Act would rescue retirees of troubled pension plans, like me and you, by providing federal loans to the plans and prohibiting pension cuts. I encourage you to read more about the Butch Lewis Act at the IBT's website.
Personally – and unfortunately – I am not optimistic that the Butch Lewis Act will become law as drafted, at least not right now. Let’s be realistic. The Butch Lewis Act is co-sponsored by two Democrats, Congress and the White House is controlled by Republicans, and we live in an era where bipartisanship is rare. In fact, as of the date of this posting, I am not aware of a single Republican that has publicly supported the Butch Lewis Act.
If you want to see pension rescue legislation like the Butch Lewis Act passed into law you must make your voice heard, not by me but by your Congressmen. In this regard, I would like to share some interesting facts:
- On August 14th, 2017 I launched my website, wpateamstersretireerep.com
- My website includes a “LETTER CAMPAIGN” page – this page includes a model of a letter for you to send to your Congressmen advocating for legislation that would save us all from pension cuts.
- I encouraged all of you – and still encourage you – to send these letters and provided the mailing addresses for all of the Congressmen and Senators representing Western Pennsylvania.
- As of August 14th, 2017, the “LETTER CAMPAIGN” page has been viewed just 621 times, even though there are more than 17,000 retirees and deferred vested participants in the Pension Fund.
- Also available on my “LETTER CAMPAIGN” page are copies of letters I sent to all of the Congressmen and Senators representing Western Pennsylvania and President Trump explaining our dire circumstances and pleading for legislation to right this wrong – I sent this letter on September 22, 2017.
- As of December 11th,2017, only Representative Mike Doyle’s office (Democrat-PA 14th District) has responded to that letter.
I accepted the responsibility of serving as your Retiree Representative because I am willing to do my part to avoid pension cuts that would significantly impact my life and yours. But, brothers and sisters, I am but one voice and one voter. We all need to do our part if we want to see pension rescue legislation like the Butch Lewis Act passed into law. And to do our part, we must make our voices heard in Congress. No one is coming to save you – we must band together in solidarity and save ourselves.
Please visit my website at wpatrr.com to see the letters I have just sent to Western Pennsylvania Congressmen in support of the Butch Lewis Act. You can also go to www.wpatrr.com for a model letter you should send to your Congressmen in support of the Butch Lewis Act.
There is also a petition in support of the Butch Lewis Act you can sign online at Change.Org here. I am not endorsing Change.Org, but several of you have asked me about starting a petition and Change.Org already has one, so if you’d like to sign a petition supporting the Butch Lewis Act I suggest you do so there.
2Are there any updates about the Butch Lewis Act as of January 10, 2018?
The “Butch Lewis Act of 2017” is a bill that was introduced in Congress on November 16, 2017 by Senator Sherrod Brown (D-OH) and Representative Richard Neal (D-MA-1). The Senate bill is designated as S. 2147 and the House bill is designated H.R. 4444.
If passed into law as drafted, the Butch Lewis Act would rescue retirees of troubled pension plans, like you and me, by providing federal loans to the plans enabling them to avoid pension cuts. I encourage you to read more about the Butch Lewis Act at the IBT's website.
I wanted to provide some updates regarding the Butch Lewis Act since my first FAQ about it:
- H.R. 4444 was referred the Congressional Committee on Education and the Workforce and the Committees on Ways and Means, and Appropriations, where it is currently being considered
- S. 2147 has been referred to the Senate Committee on Finance, where it is being considered
- On December 20, 2017, Senator Robert Casey (D-PA) cosponsored S. 2147, the Senate version of the Butch Lewis Act
- Congressman Mike Doyle (D-PA-14) is not yet a cosponsor of H.R. 4444, the House version of the Butch Lewis Act, but his office confirmed that he has asked to be a cosponsor
- I’m not getting political, just reporting the facts: as of this post, S. 2147 been cosponsored by 13 Senators – all Democrats, and H.R. 4444 has been cosponsored by 106 Congressmen and women – all Democrats
- Although the Butch Lewis Act does not currently have a single Republican cosponsor, I have been contacted by the offices of Congressmen Mike Kelly (R-PA-3) and Keith Rothfus (R-PA-12)
- The representatives of Congressmen Kelly and Rothfus indicated that they are aware that the MPRA pension cuts are an important issue to many of their constituents (i.e., you and me) and that they are open minded to legislation that would address the issue
- Also, on January 2, 2018 Congressman Peter King (R-NY-2) publicly announced his support for the Butch Lewis Act
I strongly encourage you to go to our Letter Campaign page for a model letter you can send to your Congressmen and women and Senators in support of the Butch Lewis Act. Also, please visit my website at www.wpatrr.com to see the letters I recently sent to Western Pennsylvania Congressmen in support of the Butch Lewis Act.
There is also a petition in support of the Butch Lewis Act you can sign online at Change.Org here. I am not endorsing Change.Org, but several of you have asked me about starting a petition and Change.Org already has one, so if you’d like to sign a petition supporting the Butch Lewis Act, you can do so there.
For additional information about the Butch Lewis Act, you can learn about the House version of the bill here and the Senate version of the bill here.
3Why was I appointed Retiree Representative?
The Pension Fund’s Trustees decided to file an application with the United States Treasury Department under a law called the Multiemployer Pension Reform Act of 2014 (MPRA). MPRA is also known as the Kline-Miller Act. MPRA requires the Pension Fund’s Trustees to appoint a Retiree Representative because the Pension Fund has more than 10,000 participants. The only requirement to serving as Retiree Representative is being a participant in pay status in the Pension Fund.
The Retiree Representative receives no compensation. The Retiree Representative’s reasonable expenses are reimbursed by the Pension Fund.
4Are Pension Fund benefits going to be cut?
Probably. If the Pension Fund’s MPRA application is approved then benefits will be reduced for most current retirees.
Until the Pension Fund’s MPRA application is available no one will know exactly how the pension reductions will work. The law does impose a few limits on how the Trustees cut pension benefits. Retirees over the age of 80 or receiving a disability pension from the Pension Fund cannot have their pensions reduced. The reductions for retirees between ages 75 and 79 are limited.
I will receive the same pension cuts as any other retiree; my status as Retiree Representative does not entitle me to special treatment.
5Why are the Pension Fund Trustees filing a MPRA application?
The Pension Fund is severely underfunded and is projected to become insolvent in 2028. This means that in about a decade the Pension Fund could run out of money unless action is taken. The point of the MPRA application is to obtain benefit reductions that will enable the Pension Fund to avoid insolvency. It also important to understand that the MPRA application does not guarantee that the Pension Fund will avoid insolvency; investment returns and other variables ultimately have a great deal to do with whether the Pension Fund avoids insolvency.
6How can the Pension Fund run out of money? It has $700 million.
The Pension Fund’s problem, like many other plans, is that it owes much more in pension benefits than it receives in employer contributions. The Pension Fund, for example, currently pays out about $6 million more per month in benefits than it receives in employer contributions. So while it might seem impossible that such a large plan could run out of money, the funding deficiency will over time drive the Pension Fund insolvent.
7Doesn’t the federal government protect our pensions?
In the event the Pension Fund becomes insolvent, all Pension Fund benefits would be in jeopardy except for the benefits insured by the Pension Benefit Guaranty Corporation (PBGC). There are two important problems regarding the PBGC insured benefit.
First, the benefit insured by the PBGC for multiemployer plans like the Pension Fund is relatively small compared to the Pension Fund’s benefits. The PBGC guarantees 100% of a benefit up to $11 per month per year of service. This roughly equates to a pension benefit of $3,960 per year for an individual with 30 years of service. The PBGC then guarantees 75% of the next $33 per month per year of service up to a maximum annual benefit of $12,870. So if the Pension Fund becomes insolvent and the PBGC provides the insured benefit, everyone entitled to a benefit is likely going to see a drastic reduction.
The second problem with the PBGC insured benefit, however, is the solvency of the PBGC itself. In 2016, the PBGC delivered a report to the United States Congress indicating that the multiemployer insurance program would likely become insolvent in 2025. If the PBGC becomes insolvent then it will be unable to pay all of its obligations.
8What is the Retiree Representative’s job?
MPRA states that the Retiree Representative “shall advocate for the interests of the retired and deferred vested participants and beneficiaries of the Pension Fund”.
[A deferred vested participant is an individual entitled to a benefit from the Pension Fund but is not currently receiving benefit payments. Deferred vested participants are also no longer actively employed.]
I will communicate with you about the Pension Fund’s MPRA application; answer your questions as best as I am able; and, advocate in your interests that any benefit cuts must be fairly distributed in accordance with the law.
I am just like you – I don’t understand the intricacies of multiemployer pension funding or MPRA. MPRA is a relatively new law and it is complex. To assist me in performing my job as the Retiree Representative, I have engaged CBIZ Retirement Plan Services
to provide actuarial services and Meyer, Unkovic & Scott LLP
to serve as my legal counsel. I have also hired 4CTechnologies
to build this website and to help me reach as many retirees and deferred vested Pension Fund participants as possible. MPRA authorizes me to hire these professionals, but their fees are paid by the Pension Fund.
9How can the Trustees just cut my pension benefits?
On their own, they can’t. Under MPRA they must first file an application with the United States Treasury Department explaining how they propose to cut benefits and how those benefit cuts will enable the Pension Fund to avoid insolvency. The Treasury Department will then review the letter to determine whether the Trustees determinations are in accordance with law. As the Retiree Representative, I will share my thoughts with the Treasury Department during this process. This will be my opportunity to speak for you.
If the Treasury Department approves the Trustees’ application, then the Pension Fund’s participants and beneficiaries will vote to accept or reject the benefit reductions. If a majority of plan participants vote to reject the benefit reductions they will not take effect unless the Treasury Department determines that the Pension Fund is a “systemically important plan”. A systemically important plan is a plan that the PBGC projects the present value of projected financial assistance payments to exceed $1 billion if the benefit reductions are not implemented. If the Treasury Department determines that the Pension Fund is a systemically important plan it may authorize certain benefit reductions regardless of the participant vote.
As your Retiree Representative, I will be involved in each step of the process and will post updates on this website regarding significant developments.
10Are orphans of withdrawing employers entitled to special protection if the employer paid its withdrawal liability to the Fund in full?
They are not entitled to special protection under MPRA. Under MPRA, the pension cuts must be equitably distributed. The Trustees could distinguish between orphans based on whether their employers paid their withdrawal liability to some extent and argue that, in totality, the cuts are equitably distributed. MPRA, however, does not address the matter and the United States Department of Treasury would have to approve the application. I cannot say more about this until we are provided the details of the Trustees’ MPRA application.
11I am in payment status and over age 80 on the effective date of the MPRA cuts. Subsequently, I die. Is the survivor benefit payable to my spouse cut?
No. Under MPRA, the pension cuts occur once, on the effective date specified in the MPRA application. In this scenario the survivor benefit payable to your spouse would not be cut regardless of her age.
12What can you do?
You can stay informed and up to date by visiting this website often. I would also encourage you to recommend this website to anyone you know that has earned or is receiving a Pension Fund benefit.
You can also visit my “Lickert Listens” page and sign up
for updates by providing us with your e-mail address.
I will update the frequently asked questions section of my website from time to time as developments occur.
13What if you have questions?
You should e-mail your questions to email@example.com
or call 724-382-4956 and leave a message.