Congressman Cleaver Joins Representatives in Charge to Protect Pensions

WASHINGTON D.C. – Congressman Emanuel Cleaver, II joined 40 other U.S. Representatives in a letter to House leaders regarding future pensions. The charge led by U.S. Reps. Marcy Kaptur, Rick Nolan and Cheri Bustos urged House Leadership to reject any proposal attacking the hard-earned pension benefits of retirees and workers added as a rider to any end-of-year legislation. Congressman Cleaver is pleased to announce that the effort was successful in keeping harmful provisions out of appropriations legislation.

 “When I spoke with and listened to hundreds of retirees earlier this year in a town hall meeting, who were in fear of facing dramatic cuts to their pensions, the only thing I could think of was how did this happen. I believe one of the problems involved last minute budget moves. We can’t let that happen again,” said Congressman Cleaver.

The lawmakers urged House Leadership to reject House Education and Workforce Chairman John Kline’s draft composite pension proposal, because the proposal has not been fully debated in Congress. House leaders responded and the proposal failed.

Congressman Cleaver has been working on behalf of retirees, and specifically those with the Central States Pension Fund, since 2015. Hundreds of retirees have written to his office regarding the future stability of the Fund. This February Congressman Cleaver held a town hall meeting in his district in Kansas City, Missouri and invited U.S. Department of Treasury’s Special Executive to Compensation, Ken Feinberg to listen to the retirees’ concerns.  He also sent a letter to the Department of Justice requesting a formal investigation into the management of the Central States Pension Fund to determine if there was any fraudulent or mishandling of funds. At least 32,000 retirees would be affected in Missouri by any cuts to the Central States Pension Fund.

The full text of the letter is available below:

December 5, 2016

The Honorable Paul D. Ryan
Speaker
U.S. House of Representatives
Washington, DC 20515

The Honorable Kevin McCarthy
Majority Leader
U.S. House of Representatives
Washington, DC 20515

The Honorable Nancy Pelosi
Minority Leader
U.S. House of Representatives
Washington, DC 20515

The Honorable Steny Hoyer
Minority Whip
U.S. House of Representatives
Washington, DC 20515

 Dear Speaker Ryan, Majority Leader McCarthy, Minority Leader Pelosi, and Minority Whip Hoyer,

 We write to express grave concern over the possible inclusion of pension reform legislation to “modernize multiemployer pensions” in any must-pass, end-of-year legislative vehicle, particularly a budgetary continuing resolution. Just two years ago, at the last minute and behind closed doors, a similar negotiation unfolded and resulted in the inclusion of the Multiemployer Pension Reform Act (MPRA) in the 2014 Cromnibus. We are deeply troubled to hear this may happen again with pension legislation that would have significant consequences to American workers and retirees.

In September 2016, House Education & Workforce Committee Chairman John Kline revealed a discussion draft and held one hearing on a “Discussion Draft to Modernize Multiemployer Pensions,” which would change funding rules for pension plans to allow the creation of “composite” multiemployer plans. The composite plans would combine elements of defined benefit and defined contribution pension plans.

Although we commend Chairman Kline for his commitment and desire to address the looming challenges of retirement security in America, to include this proposal in must-pass legislation without a formal introduction, in addition to no Committee markup, floor debate, or independent floor vote, is unacceptable. On such critical life issues as retirement and financial security, we seek to be involved in the creation of the legislative proposal and engage in a transparent debate through regular process. 

We are in full agreement that Congress must address the multiemployer retirement savings crisis and that tough choices will likely be required. However, we cannot blindly accept a proposal that has been through almost zero regular order and which permits employers and pension funds to transition to new plans that may put existing “legacy” plans that already face funding challenges at greater risk.

Although Chairman Kline assures his proposal is good for employers, workers, retirees, and taxpayers, the current circumstances multiemployer pension funds in America face is a zero-sum situation and a result of circumstances beyond the control of workers and retirees. Again, as we saw with MPRA, retirees are asked to bear the brunt of this policy’s proposals, with almost no input. Concerns[1] have already arisen that his new proposal provides inadequate funding for new composite plans and will weaken the funding base for existing plans. The proposal will not only put retirees’ pensions at risk, but will reduce premium payments and add significant new liabilities to the Pension Benefit Guaranty Corporation’s already underfunded multiemployer insurance program.

Following the unacceptable inclusion of MPRA in the 2014 Cromnibus deal, we continue to hear extensively from constituent retirees whose retirement security is at stake. These hardworking Americans deserve a fair, thorough and open legislative process where their interests are weighed and heard. Given the limited time since Chairman Kline unveiled his proposal and its subsequent limited review and process, we firmly assert that its inclusion in any must-pass legislation is intolerable.

Thank you for your consideration of our request.

 For more information, please contact Heather Frierson at 816-842-4545 or Heather.Frierson@mail.house.gov.

Emanuel Cleaver, II is the U.S. Representative for Missouri’s Fifth Congressional District, which includes Kansas City, Independence, Lee's Summit, Raytown, Grandview, Sugar Creek, Blue Springs, Grain Valley, Oak Grove, North Kansas City, Gladstone, Claycomo, and all of Ray, Lafayette, and Saline Counties. He is a member of the exclusive House Financial Services Committee, the Ranking Member of the Subcommittee on Housing and Insurance, and also a Senior Whip of the Democratic Caucus. A high-resolution photo of Congressman Cleaver is available here.