CHECK OUT WEB SITE COULD NOT POST WHOLE SPEECH Home / Newsroom / Press Releases Portman Stands Up for Ohio Workers Facing Severe Pension Cuts[/paste:font] Urges Department of the Treasury to Reject Central States’ Application to Reduce Benefits Washington, D.C. – Today, U.S. Senator Rob Portman delivered remarks on the Senate floor in support of his Pension Accountability Act, which will help protect Ohioans from having their hard-earned pensions cut with no say in the process. Portman urged the Department of the Treasury to reject the Central States’ proposal to cut benefits by up to 70 percent, calling instead on all involved parties to seek out a better solution. Portman, who detailed the importance of his Pension Accountability Act in October in an op-ed in the Cleveland Plain Dealer, recently rallied with Teamsters at the U.S. Capitol to help the more than 47,000 Ohioans who are facing Central States Pension Cuts. Transcript of Portman’s floor remarks can be found below and a video can be found here. “I'm rising today to talk about an issue that affects us in Ohio but affects retirees all around the country. Let me just start by saying this, if hundreds of thousands of retirees were getting their social security benefits that they had worked for cut by as much as 70 percent, there would be an uproar nationally. People would consider it totally unacceptable. It would be a top news story every night. People would say ‘okay, these retirees played by the rules, did everything right and yet they're seeing these big cuts. How could this happen?’ Yet that's exactly what's happening to about 400,000 members of the Central States Pension who are facing this fate of cuts up to 70 percent as soon as July 1 of this year. And again, these are people who worked hard all their lives and put money into the pension system, assuming it would be there, made their financial plan based on that, and now they're suddenly finding massive cuts. Some 20 percent, some 40 percent, some as high as, again, 70 percent. It's time for the senate to address this to come up with a fair solution. “The Central State's Pension fund consists mostly of union truck drivers, and they have seen their pension funds severely decline. That's why we're in this situation. The pension suffered big investment declines during the great recession, as did other pension funds. One difference is they missed the market rebound because they had a large population of new retirees, and they had to withdraw large sums from their pension for those payouts. So one of the largest pension funds in America is in trouble. It would be projected to go bankrupt in about a decade and that bankruptcy could be so large that it would have a very negative impact on this larger fund called the Pension Benefit Guaranty Corporation, PBGC, that ensures the fund. We don't want that to happen because that could leave, of course, hundreds of thousands of retirees with severely reduced pensions or no pension. So something has to be done. “Math is math. I understand that. By the way, the central states retirees understand that. They know there's a problem. But I've got to tell you, the way congress and the president have dealt with this is totally unacceptable. This is what congress did. The House of Representatives worked on a proposal. It was crafted in the house, not in the senate. It allowed the pension to possibly avert bankruptcy. I say possibly because as I'll talk about later, even this proposal doesn't mean they're going to avert bankruptcy. But they did so by cutting the benefits of current retirees substantially, severely in some cases, again by as much as 70 percent. “They then took this proposal, it's called the Multiemployer Pension Reform Act or MPRA. Pension Reform Act, MPRA, they took it and they buried it inside of a $1 trillion spending bill which, frankly, nobody read because it was one of these last-minute bills. It was an end of the year spending package, an omnibus spending package, as they call it, and put this in, sent it to the United States Senate and members of the senate were told this is an up-or-down vote. There were no hearings in the senate. “There was no transparent process. I remember about a year and a half ago when this happened we were told if the senate didn't quickly pass these near unprecedented pension reforms with no hearings, no opportunity for amendments, no opportunities for amendments on the floor of the senate, that the spending bill would fail. This, to me, is Washington at its worst. “You bury something in a spending bill that has nothing to do with the spending bill -- in this case a pension cut -- and then you basically try to blackmail lawmakers into voting for it by saying if you don't vote for this, the whole bill goes down. I voted against it, as did other members here in the senate, but it passed. Of course, President Obama quickly signed it into law and suddenly these retirees were sent notices saying you've got this big cut in your pension. “And look, I agree the status quo is not acceptable. I think over time it would lead to pension bankruptcy and something has to be done. Difficult decisions are necessary. But MPRA was an unfair remedy because it didn't go through a transparent, fair, and open process and did not give workers and retirees a sufficient voice in their own future. They did not have a voice in crafting the reforms because of the way it was structured. “So, after months of meeting with Ohio workers -- and we probably have 47,000, 48,000 Ohioans who are affected by this. After meeting with retirees, after meeting with other stakeholders, including the administration, I introduced what was called the Pension Accountability Act. Basically it gives more workers and retirees a voice in this process. Right now MPRA does allow there to be a vote by workers and retirees. But for these large plans, the vote's nonbinding. So, there is a vote but it doesn't count. “Even if participants vote 100 percent against the reforms it wouldn't stop it from going forward. That's crazy. That's certainly not democratic. Additionally, the vote is designed unfairly. Here's how it works, if a retiree or worker chooses not to take out a ballot and vote it's automatically counted as a ‘Yes’ vote for the plan. Imagine how that would work in U.S. Presidential elections or other democratic processes. That's not how it works. If you submit a ballot, you should be counted. The onus to submit a ballot, it shouldn't be counted. “The pension accountability act fixes these two problems. First, it makes the retiree and worker vote binding. This will give workers and retirees a seat at the table and the majority vote would be required for any pension cuts to go forward. Second, it makes the vote fair by counting the ballots as they should be counted. Not counting unreturned ballots as an automatic ‘Yes’ vote. These commonsense reforms gives the workers and the retirees more leverage. It gives them a fair shake, a say in the process. Because their vote is going to be needed in order to implement these pension changes, they are going to have a seat at the table to find the right balance. Again, we know these pensions are in trouble and some changes are necessary to prevent bankruptcy that could leave some families with nothing. So let the process play out. If the businesses, the unions, the workers, the retirees can craft a solution to win a majority vote, more power to them, but let's give everyone a seat at the table and let these retirees have a vote. “The goal should not be to stop all pension reforms. If they continue its road to bankruptcy, then everybody loses. But the goal should be to say to those affected you have a say in thousand these reforms are designed. It brings accountability. It opens the lines of communication on both sides of the bargaining table to come up with a fair solution. There are some other proposals out there, one in particular. I think the pension accountability act has a much more realistic chance of enactment because I do not believe a massive tax increase is viable. And by the way, it's the only reform proposal with bipartisan support. In fact, between my bill and the house companion legislation, we have nine Democrats and nine Republicans. In the meantime, for the reasons I have discussed, the Department of the Treasury should not accept Central States application. They should reject this proposal to cut benefits up to 70 percent for some of the retirees as we've talked about. By the way, even if all the applications positive market assumptions play out, there are still we are told a 50 percent chance that the pension goes bankrupt anyway. So this doesn't exactly inspire confidence in this plan, and I think they should go back to the drawing board. And by the way, I'm open-minded to other solutions that would provide funding from inside the multiemployer pension system. There are different ideas out there, we should talk about them.