Congressman Tim Ryan Introduces the Prioritizing Our Workers Act
Washington, DC – Congressman Tim Ryan today introduced the Prioritizing Our Workers (POWA) Act. This legislation revises the priorities section of the bankruptcy code to place unpaid vested benefits on the same level as bankruptcy attorneys’ fees and other highest-priority claims that a company must pay out in full before paying any other claims. Congressman Donald Norcross (D-NJ) is an original co-sponsor in the House, and Senator Joe Manchin (D-WV) has introduced companion legislation in the Senate.
“Pensions are not ‘benefits’ given as a gift from employer to employee, they represent payment for work that was already done. In 2016 alone, over 146,000 individual pensioners experienced cuts in their pension benefits. This is a clear breach of contract and these hardworking men and women are being robbed. It’s that simple. Every day these Americans went to work with the understanding that their future was secure with the benefits they were promised. American retirees should never have to doubt their financial security after a lifetime spent building our great county. I am proud to support this bill,” said Congressman Ryan.
"If you work hard and play by the rules, you should be able afford to care for your family and retire with dignity. Hard-working men and women expect to receive the pensions they earned and were promised by their employers," said Congressman Norcross, an electrician by trade. "These workers already did their part: they worked day in and day out giving back to their community. Now, we must do our part in Congress to ensure workers and their families aren't being cheated."
“American bankruptcy laws are a travesty for working families, who are left with nothing when a company goes bankrupt while the big banks and corporate executives walk away with millions. It is long past time for Congress to take action to reform bankruptcy laws. Congressman Ryan's bill takes a huge step toward leveling the playing field for workers, and we support it wholeheartedly,” said Cecil Roberts, International President of the United Mine Workers of America.
Workers who choose to make contributions to a pension plan are electing to set aside a portion of their wages in order to earn pension benefits in their retirement. Yet, when a business who sponsors one of these funds goes out of business, it is often the pensioners who are left with losses. The Pension Benefit Guaranty Corporation (PBGC) estimates 146,000 individual pensioners experienced cuts in pension benefits due in 2016 as a result of employer bankruptcies. The Prioritizing Our Workers Act would re-define claims for unfunded vested benefits in defined benefit pension plan as “administrative expenses” of the estate, which, under bankruptcy law, must be paid before all other claims. The bill puts pension benefits on the same level as bankruptcy attorneys’ fees and other highest-priority claims that a company must pay out in full BEFORE paying any other claims.
Yesterday, Congressman Ryan also joined Senator Manchin, Senator Capito, Congressman McKinley and Congressman Welch in introducing the American Miners Pension Act (AMP Act) which would ensure the 87,000 retired miners receiving pensions, as well as another 20,000 who are vested, won’t lose their pensions benefits under the 1974 UMWA Pension Plan which will soon be insolvent. This bill would:
- Uses the provision from the Miners Protection Act to allow transfers of excess funds in the Abandoned Mine Land program to the 1974 UMWA pension plan.
- Direct the Treasury Department to loan the Pension Plan funds annually.
- Cap the annual loan amount at $600 million and set the interest rate at 1%.
- Require the fund to pay interest for the first 10 years and then pay back the principal plus interest over a 30-year term.
- Require the fund to certify each year that the pension plan is solvent and able to pay back the principal and interest.