In a perfect world, Senate Bill 1631, the Keep Our Pension Promises Act (KOPPA) sponsored by Bernie Sanders (I-VT), would make the need for a Pension Rescue Plan completely unnecessary. But a perfect world is one without politics. That’s the problem.
KOPPA is just one of nearly 500 bills currently referred to the Senate Committee on Finance. To put that in perspective, only 30 bills reached the next stage of being reported by the committee last year. Of those 30, just three were Democrat-sponsored bills.
That’s because the committee is run by a Republican majority that can decide which bills see the light of day. In today’s political climate, Senator Sanders has very few Republican allies. Some extraordinary things would have to happen in order for KOPPA to reach the Senate, where even more Republican barriers would confront it.
But, what if extraordinary things did happen and KOPPA managed to get out of committee, through both houses and signed by a future President? Depending on how long all of that took, Bricklayers & Allied Craftsmen Local No. 7’s Pension Plan would continue down the road toward insolvency.
KOPPA saves pensions by changing rules for something called a partition, where the PBGC takes over payments for part of a pension plan. However, the Bricklayers Local No. 7 Pension Plan does not qualify for current partition rules because the maximum benefit suspensions have not been made. Under KOPPA, new rules would be added for partitions but they would be based on special treatment of bankrupt and withdrawn employers. These are not issues that impact the Bricklayers Local No. 7 Pension Plan and it would not qualify.
Many of you are aware of the failure of the Central States Pension Fund due to its high profile. KOPPA exists in no small part because of Central States, and would help that fund stay solvent because many of its problems are related to special situations in that industry with bankruptcy and withdrawal liability.
While KOPPA may work for some pension funds like Central States, it is not a viable option for the Bricklayers Local No. 7 Pension Plan.