My representative in Congress, Jim Renacci (R-OH) has sponsored House Resolution 761 To prohibit the use of premiums paid to the Pension Benefit Guaranty Corporation as an offset for other Federal spending.
Huh?
As of this morning the:
…text has not been received for H.R.761—To prohibit the use of premiums paid to the Pension Benefit Guaranty Corporation as an offset for other Federal spending. Bills are generally sent to the Library of Congress from GPO, the Government Publishing Office, a day or two after they are introduced on the floor of the House or Senate. Delays can occur when there are a large number of bills to prepare or when a very large bill has to be printed.
So, what might Renacci be sponsoring?
Well, the Pension Benefit Guaranty Corporation
…protects the retirement incomes of more than 40 million American workers in nearly 24,000 private-sector defined benefit pension plans. A defined benefit plan provides a specified monthly benefit at retirement, often based on a combination of salary and years of service. PBGC was created by the Employee Retirement Income Security Act of 1974 to encourage the continuation and maintenance of private-sector defined benefit pension plans, provide timely and uninterrupted payment of pension benefits, and keep pension insurance premiums at a minimum.
PBGC is not funded by general tax revenues. PBGC collects insurance premiums from employers that sponsor insured pension plans, earns money from investments and receives funds from pension plans it takes over.
The inference there is that Renacci thinks that someone (my guess would be Democrats) are borrowing from PBGC premiums to fund other projects. The question is, of course, specifically who and for what purpose?
Renacci first introduced the legislation last April. Senator Mike Enzi (R-WY) introduced similar legislation last July.
So far I’ve only found one news story about the bill: ‘Off Budget’ PBGC Premiums Viewed As Essential By DB Industry. I’ll be looking for more—especially at the original legislation in both the house and senate last year—to find some clarity.
I did find this telling in the piece regarding Enzi:
In recent years, Congress [Democrats? JH] has increased the PBGC premiums several times in order to offset increased spending; most recently increasing premiums through 2025 by $7.65 billion in the Bipartisan Budget Act of 2015.
Confronting these challenges, S. 3240 would ensure that premiums paid to the PBGC are no longer counted as general fund revenue, eliminating the motivation for legislators to raise premiums in order to pay for unrelated initiatives and programs.
In a letter to Enzi, industry groups thanked him for introducing the legislation. “Eliminating the ability to ‘double-count’ these premiums for other spending will keep lawmakers from using pension plans as a piggy bank,” said Lynn Dudley, senior vice president, global retirement and compensation policy for the American Benefits Council.
In the story concerning Renacci’s original bill, I found:
“The Pension and Budget Integrity Act simply moves these premiums ‘off-budget,’ and ensures that Congress is raising premiums only if and when it is appropriate.”
In a statement, the ERISA Industry Committee, the American Benefits Council, the American Retirement Association, the Committee on Investment of Employee Benefit Assets, the National Association of Manufacturers, the Society for Human Resource Management, and U.S. Chamber of Commerce said the Act would ensure any future pension premium increases are only used towards retiree payments from the PBGC and not double counted for budget scoring purposes, which was the original intent of Congress when the PBGC was created in 1974.
“Discipline is needed to ensure that PBGC premiums are used solely to protect the pension system and not as a budget gimmick to pay for unrelated federal programs,” says Annette Guarisco Fildes, president and CEO of the ERISA Industry Committee. “The predictability of costs is critical as employers weigh whether to continue sponsoring defined benefit plans and there is nothing predictable about Congress raising premiums at any time to pay for other programs.”
This is starting to make more sense. My read is that businesses (and remember, Renacci is a former car dealership owner) view the premiums as a tax and, as such, an imposition on their profits. Neither story provides any insight as to precisely why the premiums went up or where the money is going.
I just have to keep digging.
Previously…