SR2013 100TH GENERAL ASSEMBLY

SR2013 LRB100 23405 ALS 42430 r

SENATE RESOLUTION

WHEREAS, Over ten million Americans are currently participating in multiemployer pension plans, which support over 9.1% of the United States workforce, or over 13.5 million jobs; in 2015, participants in these multiemployer pension plans received $41 billion in benefits; and

WHEREAS, The Central States Pension Fund is the largest multiemployer pension plan in the United States and has 1,335 employers participating and over 378,000 individuals; and

WHEREAS, Current beneficiaries of the Central States Pension Fund receive over $2.8 billion a year in benefits and pay over $230 million annually in taxes; and

WHEREAS, Almost 25,500 participants in the Central States Pension Fund live in Illinois, and they receive almost $166 million in annual benefits; the Illinois beneficiaries pay almost $13 million annually in taxes; and

WHEREAS, As of August 2017, 114 multiemployer pension plans nationwide were underfunded by $49.9 billion, affecting 1.3 million workers; and

WHEREAS, The Central States Pension Fund suffered massive investment losses in the 2008 financial crisis and is projected to go insolvent by 2026; the Pension Benefit Guaranty Corporation has a $65 billion deficit and is likely to run out of money by 2025; and

WHEREAS, Should the Central States Pension Fund fail, there will be negative economic effects throughout the country and in Illinois, as the Fund's participants will lack sufficient resources for basic necessities, including housing and medical expenses; and

WHEREAS, The failure of the Central States Pension Fund will cause its participating employers to enter bankruptcy or go out of business; when the Central States Pension Fund fails, any attempt by the Pension Benefit Guaranty Corporation to meet its obligations to the Fund will likely force the PBGC into insolvency; and

WHEREAS, The Chamber of Commerce has expressed its concern that should the Central States Pension Fund fail, other multiemployer pension plans would also become insolvent and have a devastating effect on the economy; and

WHEREAS, The Butch Lewis Act, Senate Bill 2147, as proposed, would create the Pension Rehabilitation Administration, an agency of the U.S. Department of Treasury; and

WHEREAS, The Pension Rehabilitation Administration would provide financially distressed plans with low-interest loans guaranteed by the U.S. Government; the proceeds for these loans would be raised by the U.S. Treasury in the public debt markets and are not grants from the Federal budget; the loans for distressed plans, such as the Central States Pension Fund, would be interest only for years one through 29, with principal repayment in the year 30, and would mandate low-risk investment strategies that create a high certainty of repayment; and

WHEREAS, the Joint Select Committee on Solvency of Multiemployer Pension Plans, a Joint Committee of the U.S. Senate and House of Representatives, is devising recommendations and legislation that will significantly improve the solvency of multi-employer pension plans, including consideration of the Butch Lewis Act; the Joint Select Committee must issue a report with its conclusions by November 30, 2018; and

WHEREAS, In developing its recommendations, the Joint Selection Committee is seeking input from all who may be impacted by the failure of the multiemployer pension funds, such as the State of Illinois; and

WHEREAS, The Butch Lewis Act is supported by employers participating in the Central States Pension Fund, the U.S. Chamber of Commerce, the International Brotherhood of Teamsters, Teamsters Joint Council 25, and many labor unions and employers; and

WHEREAS, The creation of the Pension Rehabilitation Administration would prevent substantial harm to the economy of Illinois; therefore, be it

RESOLVED, BY THE SENATE OF THE ONE HUNDREDTH GENERAL ASSEMBLY OF THE STATE OF ILLINOIS, that we urge the United States Congress to immediately pass the Butch Lewis Act and allow these vital portions of our country's economy to remain solvent; and be it further

RESOLVED, That suitable copies of this resolution be presented to the members of the United States House of Representatives and the United States Senate.