Pension crisis looms

First we had the fiscal cliff, then the highway cliff. Now get ready for the pension cliff.

The lame-duck session will determine the fate of so-called multi-employer pensions. With many of these plans skittering toward insolvency in the next decade, nervous employers want to get out while the getting is still good. Pension reform advocates fear that if Congress fails to intervene before the end of this year, employers will stampede out of the plans, costing the Treasury billions.

Multi-employer plans are defined-benefit pension plans maintained not by a single company but by several companies, typically within a single industry, and by at least one union.

“In some industries, if nothing is done this year, they will have to take a look at what their alternatives are,” said Randy DeFrehn, executive director of the National Coordinating Committee for Multiemployer Plans (NCCMP), a nonprofit trade group. One clear alternative is to pull out.

The imminent retirement of two key congressional figures — Senate Health, Education, Labor and Pensions Committee Chairman Tom Harkin (D-Iowa) and House Ways and Means Committee Chairman Dave Camp (R- Mich.) — doesn’t help. Rep. John Kline (R-Minn.), another point person on multi-employer pensions, is ending his term as chairman of the Education and the Workforce Committee.

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