Congress would no longer be able to use Pension Benefit Guaranty Corporation (PBGC) premiums to offset unrelated spending increases under bipartisan legislation introduced by U.S. Rep. Jim Renacci (R-OH) on Tuesday.
The Pension and Budget Integrity Act (PBIA) would eliminate the budgetary loophole that most recently increased PBGC premiums by $7.65 billion through 2025 to offset unrelated spending under the Bipartisan Budget Act of 2015.
“We need to improve our country’s fiscal health by balancing the federal budget, and it cannot be done with accounting gimmicks,” Renacci, a member of the House Budget Committee, said. “Budget gimmicks only result in contributing to our nation’s growing debt. Our common sense, bipartisan bill promotes sound budgetary policy and helps protect the PBGC from losing vital premium contributors.”
PBIA, which Renacci introduced with U.S. Rep. Mark Pocan (D-WI), wouldn’t prevent Congress from raising PBGC premiums. Rather, it would amend budget rules to prevent PBGC premium increases from offsetting unrelated spending.
Judy Miller, the executive director of the American Society of Pension Professionals and Actuaries College of Pension Actuaries, said the organization strongly supports PBIA.
“In past years, PBGC premium increases for single employer plans have been used as a budget gimmick,” Miller said. “The thousands of responsible employers who sponsor defined benefit plans have been penalized simply because they choose to provide this benefit to employees. This legislation will put a stop to this unfair and frankly deceptive practice.
Robert Martinez Jr., the president of the International Association of Machinists and Aerospace Workers, said for too long Congress has increased PBGC premiums to pay for unrelated budget items, even though Congress does not acknowledge a responsibility for the financial health of the agency.
“By unnecessarily raising PBGC premiums, pension plans suffer undue financial pressure while working to provide retirement security to tens of millions of Americans,” Martinez said.