Dem senators: Slash executive pay at pension plans seeking benefit cuts

A group of Democratic senators want to see pension executives suffer a pay cut if the plans they monitor cut benefits.

A new bill unveiled Tuesday takes square aim at executives of pension plans that are considering cutting benefits, as lawmakers want to ensure that top officials feel some of the resulting pain as well.

{mosads}The bill comes at the same time the Treasury Department is nearing a deadline to decide whether to sign off on a sweeping set of benefit cuts sought by the Central States Pension Fund, which provides benefits to hundreds of thousands of union workers.

The bill, sponsored by five Democratic senators, is directly spurred by trouble at that fund, which is seeking cuts not only for future retirees but existing ones. Some people under the plan are facing benefit cuts of as much as 60 percent.

The cuts would impact hundreds of thousands of union workers, but the senators contend that top executives should have some skin in the game too. In a press release announcing the bill, the senators noted that the fund’s top executive made nearly $700,000 in 2014 and that the fund has also hired lobbyists to help make its case in Washington.

With significant benefit cuts on the line for retired workers, the lawmakers contend the fund should be saving every dollar they can to pay out in benefits.

“It’s completely unacceptable for top executives at Central States earned hundreds of thousands of dollars a year while at the same time, pension benefits for retirees who worked hard their entire lives are being slashed,” said Sen. Debbie Stabenow (D-Mich.), one of the bill’s sponsors.

“Fund assets shouldn’t be spent on excessive salaries and compensation for Washington lobbyists while critical retirement benefits for ordinary folks are slashed,” added Sen. Claire McCaskill (D-Mo.), another sponsor. “That’s basic fairness, and it’s appalling that executives would give themselves a pat on the back and a bonus while hurting retirees.”

Sens. Sherrod Brown (D-Ohio), Amy Klobuchar (D-Minn.) and Gary Peters (D-Mich.) are also sponsors. The legislation faces long odds in a Senate controlled by Republicans. However, members of both parties are looking for a legislative way to limit the pain from the cuts.

Under the new bill, pension fund executives would face a cut in their pay proportional to the steepest benefit cuts any retiree would face under their pension plans. Furthermore, no executives would receive a bonus while benefit cuts are in place, and pension plans seeking benefit cuts would be barred from spending money on lobbyists.

Facing steep losses stemming from the financial crisis, Central States has warned that it cannot continue paying out benefits at current levels, projecting it will be insolvent by 2026.

The Treasury Department is set to make a decision on the proposed cuts by May 7.