The Hill reports that Senate Democrats are pushing the PBGC to bypass the multiemployer pension provisions enacted as part of the American Rescue Plan Act. [https://thehill.com/opinion/finance/583184-democrats-want-to-rescue-union-pensions-from-the-partys-failed-bailout-plan?rl=1] These Legislators now realize that the provisions which mandate multiemployer pension plans seeking taxpayer funding adopt a 5.5% return assumption and only invest conservatively in investment grade fixed income, unless PBGC permits otherwise.

Most observers conclude that it is unlikely that a plan can earn 5.5% in fixed income. How did the bill end up this way? We don’t know. ERISANation is long out of the fray, but remembers when plan professionals were not listened to in crafting various provisions. Some multiemployer Trustees have long pinned their hopes on a sympathetic Congress and President, and condemned existing relief under the Pension Protection Act of 2006. After PPA, some of us in the multiemployer community pushed for further relief under the rubric Solutions not Bailouts [see http://nccmp.org/wp-content/uploads/2017/07/TalkingPointsFinal.pdf] but many in our community in fact longed for a “bailout.” They got one, but it won’t be enough, certainly not for any new participant. So how will Trustees of troubled plans, sell this relief – how will they convince an employer to enter a plan, or urge participants to defer wages for one?

There is much concern over income inequality.   President Obama and Democrats can claim that they achieved a wealth transfer from the “wealthy”[i]  to the poor and the not-wealthy.  The advertisements for Healthcare.gov (or if you like the “Affordable Care Act” or “Obamacare”) say the 85% of enrollees get some level of premium subsidy. (See also NYT http://preview.tinyurl.com/z2jt559).    The Motley Fool recently reports:

….it’s stressed that most enrolled Americans have access to the Advanced Premium Tax Credit, or APTC. The APTC is a federal subsidy that lowers what consumers pay for their monthly premium. Persons and families making under 400% of the federal poverty level (about $47,520 for an individual in 2017) qualify for the APTC, with about 85% of the 10.4 million paying enrollees currently receiving this subsidy. http://tinyurl.com/youllpay

          So who is paying for this large percentage? Proponents of ACA (including many unions) argued that health plans were already paying for the uninsured who had to resort to emergency rooms for uncompensated treatment.  Efforts were made to calculate that cost, and other costs, resulting from the uninsured.  The latest open enrollment ad campaign spells out clearly that at least as far as ACA goes, there are haves (who gets subsidies) and have nots (who don’t get subsidies).  EN has heard from teachers, restaurant workers and small business owners, including sole proprietors,  who advise that they do not receive subsidies.

            Fertile ground for Pres. Trump and the haters on Capitol Hill.

[i] Definitions or critieria differ as to whom is wealthy  or who “can afford to pay a little more”.

No pension or benefit talk this edition, just a lesson or maxim that benefit professionals and their bosses might take to heart!

About 30 years ago, T. J. LeBlanc Jr, DDS (second of his name) gave me a 1978 Motobecane 7.  One internet commentator describes this moped as a Cadillac to sit on but Citroen to work on.

Of french extraction, no one has more respect for french engineering and design than I. Further, the Motobecane 7 is also a tribute to France’s policies to  engineer full employment.  Example, cleaning a carburetor can take several hours.

What does it matter that mounting and adjustment hardware are almost always behind something that has to be removed first. And just one example: the brake light is run by a rube goldbergesque button held in by a plate on the brake handle and when the handle moves the button pops out into a rubber bulb in which three electrodes hopefully connect with a copper tube found on the lower end of the button..

The day my Dad (Lord rest his soul) gave me this bike, he started it, seemed to run fine. Okay Dad, I’ll load it up.   But wait, he must tune it up better. Still okay.  Thanks Dad, I’ll be off.  Then he said, let me give you fresh tank of fuel. This is a two-cycle bad air day moped, you mix oil and gas.  Woe to him who does not follow the correct ratio.  The bike specs are 32:1 gas to oil.  My Dad, made it 12:1.  Thus started twice a year trips to a now defunct but eccentric repair shop in a Fairfax, VA  industrial park.

And so for years, I’d pay $250, the bike would run for 6 months, then die.  For the past 6 years or so, the mighty Moto 7 has sat in my garage with a carburetor problem.  No service shop will touch it –  “parts too old” – (what a thing to say to an aging boomer).

Last August, ERISANation retired from the day-to-day strain of saving the multiemployer benefits system.  After an inspiring talk from my daughter-in-law’s Dad (he fixes everything), I decided to fix the bike.

In several days of internet trolling, I discovered an entire subculture of vintage moped enthusiasts who freely share time and knowledge.   I engaged in extensive correspondence with two or three folks, bought some parts, which it turns out I did not need.  Finally, with trepidation, I removed the carburetor, cleaned it thoroughly, ground the float valve seat with metal polish and a q-tip in a drill (YouTube video).  I put everything back together, and called it a night.

The next morning I put in fresh, correctly-ratioed fuel and tried to start it.  Gas gushed from a small hole in the carb housing.  Having no other idea, I spray air into this leaking/weep hole.  Gas and air spray from another hole which had been obscured by gasket sealant (why use a little, when a lot is stuck to your hands) and was very small.  Cleared that hole.  Bike runs and no gas leak!.  I tighten the front fork. Try and fail to fix the headlight.

HERE I SHOULD HAVE QUIT, but like my Dad just running for the first time in 6 years wasn’t good enough.  The idle speed needed adjusting, BUT, I hadn’t studied up on how to do it.  Ended up disconnecting the throttle  cable, and could not reconnect it. So, again it is not running.   I now have conferred with the moped intelligentsia and will get to it, probably 30 days from now ( and maybe fix the brake light switch too).

What compels us(me anyway) to ignore hallowed maxims and stoke frustrations.  “Perfect is the enemy of  good.”  And to me “better is the enemy of good.”  There’s a balance here, capsulized in “quit while you’re ahead.”

Note that for many years, the Moto 7 gathered dust because of my ignorance and fear of failure.  In most endeavors, failure or disappointing results are inevitable.   I observe plans that stick with the status quo because no solution will be perfect ( or please the whole board).  But try something .  It might be a start, or good enough for a start, something which we can make better.

Regards,
EN

Lately, I have been asked to assist an elderly relative and another disabled relative to address issues of assets levels and Medical Assistance, aka, Medicaid.  I am told read this state’s regulations, they are “the rules of the game.”  If only the game analogy provided a referee who could make a definitive call or a replay booth.  It would be nice if a recipient could get a do-over, like in football – replay first down.

The choices these weakest members of society face are tantamount to life and death, or at least life, and crappier life.  Make a mistake on the resource test – out the door of the  long term care facility you go, or you have no medical care, you’re done, cause you got a few grand in a windfall.

Oh sure, there are “strategies” but so few styled as safe harbors.  When the stakes are so, these folks are often paralyzed, justifiably afraid of a misstep…

Heart-rending accounts of the impact of Central States proposed cutbacks abound. Teamsters and supporters will march on Washington, Friday, April 14, 2016 (a few days before income taxes are due – later this year on account of Emancipation Day). https://teamster.org/news/2016/03/teamsters-retirees-rally-washington-dc-protect-pensions

Many put their hopes in Senator Sanders’ Keep Our Pension Promises Act or KOPPA. https://www.congress.gov/bill/114th-congress/senate-bill/1631/text

If enacted as drafted (ha ha ha), KOPPA would set up a $29 billion fund within PBGC to help cover underfunded pensions without resorting to the harsh medicine of the Multiemployer Pension Reform Act. [full disclosure:  ERISANation’s principal worked on MPRA.  It is harsh. It was and is necessary].

See also the Miners Protection Act which seeks to help participants in the United Mineworkers Plans.

KOPPA reminds us of the 2009 Pomeroy-Tiberi bill, also known as the Pomeroy-Casey bill. http://tiberi.house.gov/news/documentsingle.aspx?DocumentID=151619.

First proposed in 2009  by a Democrat and Republican as principle sponsors, it would have fully funded the PBGC which might have positioned that agency to provide a greater safety net for Central States pensioners.  Remember then the Democrats held the Presidency, and the House, and the Senate.  Pomeroy-Tiberi did not merit a single hearing.  Some of us tried including my old Chairman, MIchael J. Sullivan who spoke at a press conference, wrote a Politico piece, and other wise tried to get an audience.

Pomeroy-Tiberi-Casey quickly lost steam after characterized as another bailout bill. Worse still it was wrongly characterized as a “union bailout.”  In fact, given that a contributing employer’s liability to multiemployer plans extend beyond just making contributions, it should have been called an employer bailout bill.

The nation had spent billions on banks, and insurers, and manufacturers. Adding a few billion more to our deficit for modest workers pensions was a bridge too far.  ERISANation thought naively that the power of shame might be employed.  “Darn right we want a bailout, like you bailed out shareholders and bondholders and the powerful.”  But shame, where is thy sting?  Labor had so many friends on the Hill, but the friends had all dispersed after the signing ceremony on the Affordable Care Act, and then many no longer served after the 2010 elections.  As Wikepedia tells us:  “Although the President’s party usually loses congressional, statewide and local seats in a midterm elections, the 2010 midterm election season featured some of the biggest losses since the Great Depression.”

Why this time, is it different?  In an election year and the prospect of a divided government continuing past the election, it isn’t.  Suppose the Dems win big in November?  Should we expect KOPPA in the first 100 days?   I would not be sanguine.  Senator Sanders intends to open the Tax Code up for a pay-for.  That proverbial can of squirms cannot be opened for just one little adjustment.

It’s fall and the legislative calendar begins to compress. Will Congress enact the so-called Title III to MEPRA? What may be at stake is the last bastion of real pensions, organized labor 10 million or so lives built on these plans.