05.03.16

Senators Peters, Stabenow Announce Legislation to Hold Pension Fund Executives Accountable if Retirees’ Benefits are Cut

U.S. Senators Debbie Stabenow (D-MI) and Gary Peters (D-MI) today announced the introduction of the Pension Fund Integrity Act of 2016 (S. 2894), which would cut pay and prevent raises and bonuses for top pension fund executives if retirees’ benefits are cut. The Central States Pension Fund has submitted an application to the U.S. Department of Treasury that would drastically cut pension benefits for roughly 270,000 retirees across the country. If approved, some retirees could see their pensions reduced as much as 50 to 70 percent. Meanwhile, the top executive of the Central States Pension Fund earned nearly $700,000 in 2014.  The bill is also cosponsored by Senators Sherrod Brown (D-OH), Claire McCaskill (D-MO), and Amy Klobuchar (D-MN)

The Pension Fund Integrity Act of 2016 would cut excessive executive compensation and stop raises and bonuses for executives as long as the benefit cuts are in place. The amount of the executive pay cut would be determined by calculating the percentage of cuts for retirees most impacted by the reduced pension benefits. The bill also prohibits financially troubled pension plans from using plan assets to hire outside lobbying firms. As just one example, the Central States Pension Fund has spent hundreds of thousands of dollars to pay outside lobbyists in recent years to lobby on issues including passing legislation to allow retiree benefits to be cut. 

“Thousands of Michigan retirees depend on the pensions they have earned through years of hard work to afford housing, food, health care, and other critical necessities,” said Senator Peters. “It is simply outrageous that plan executives have proposed cutting retiree pensions by as much as 70 percent, but continue to earn six-figure salaries and large bonuses. This bill is a key piece of broader efforts to increase oversight for pension plans and to prevent steep cuts to the benefits retirees have earned and depend on.”

“A pension is a promise that’s earned, and workers should be able to count on them when they retire,” said Senator Stabenow. “It’s completely unacceptable that top executives at Central States earned hundreds of thousands of dollars a year while at the same time, pension benefits for retirees who worked hard their entire lives are being slashed. The Pension Fund Integrity Act will hold pension fund executives accountable if retirees’ benefits are cut, and I will continue to do everything I can to protect hardworking retirees’ pensions.”

The Pension Fund Integrity Act will:

Cut excessive executive compensation This bill will cut excessive compensation for executives at the largest financially troubled plans. The U.S. Department of Treasury would determine the executive pay cut by calculating the percentage of cuts for retirees most impacted by the reduced pension benefits. This would only take effect if the benefit cuts are approved by Treasury.

Stop raises and bonuses for executives— This bill will also stop executives from receiving raises or bonuses for as long as the benefit cuts are in effect. This would effectively freeze their compensation.

Prohibit financially troubled pension plans from using plan assets to hire outside lobbying firms- This bill will prohibit a financially troubled plan from hiring outside lobbying firms to influence legislation. Employees of the plan could still lobby.

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