Our Trustees Must Support a Fair and Democratic Vote on Pension Cuts

Last Friday, our trustees formally announced that they will begin the process of cutting our pension benefits. That process is spelled out in a law called the Multiemployer Pension Reform Act (MPRA). MPRA overturned 40 years of labor law by allowing accrued (already earned) pension benefits to be cut by trustees.   MPRA was quietly tucked into a must-pass Omnibus Budget compromise bill in late December 2014. It was drafted in secret and was kept from lawmakers until the last minute. It was never debated, and no amendments were offered. The result, as many Senators and Congressmen have stated, is that MPRA is unfair to workers and retirees.    One prime example of MPRA’s unfairness is how it deprives plan participants of any meaningful vote on whether the cuts should go into effect. MPRA states that plan participants should be given the opportunity to vote on proposed cuts to their pensions. However, the law then cynically takes away that right with two additional provisions. First, any participants who don’t vote are automatically counted as votes in favor of benefit cuts. For example, in a pension plan with 20,000 participants, there could easily be 12,000 members who don’t vote. Under MPRA, those 12,000 non-voters will be counted as “yes” votes in favor of benefit cuts.    Another way the MPRA voting process is unfair is that the vote is non-binding for large pension plans. Under MPRA, the Treasury Department determines whether a plan is large (called “systemically important” plans). It is possible that the Treasury Department will rule that the AFM-EPF plan is “systemically important.” If that happens, the Treasury Department can overrule a “no” vote on cuts and allow the proposed cuts to go forward.   Senator Rob Portman (R-OH) and Senator Sherrod Brown (D-OH), together with three other Senators, have co-sponsored the Pension Accountability Act (S. 833), which would ensure that all votes on any cut proposal would be counted. First, it would prevent unreturned ballots from being counted as a “yes” vote. In other words, there could be no cuts if over 50% of plan participants who vote decide there shouldn’t be cuts. S. 833 also takes away the “systemically important” exception and makes the participant vote binding no matter how large the plan is.   As Senator Brown said in support of S. 833, “Workers sat at the negotiating table and gave up raises because they were counting on these pensions when they retired. It’s common sense that these workers should also have a seat at the table when negotiating the future of the pensions they fought so hard for.”    The plan participants of the AFM-EPF should have a meaningful vote on whether benefit cuts make sense for them. We call on our trustees to support S. 833 so that a fair and democratic vote can take place on any proposed benefit cuts.  Regardless of what Congress chooses to do, there is nothing stopping our trustees from holding a vote on any proposed cuts and then providing a full and fair disclosure of the results. That means telling plan participants whether a majority of voters voted in favor of the cuts. We deserve a transparent, fair and democratic process because after all, it is our hard earned pensions that are at risk of being cut.

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