In the United States today, only three in every ten workers takes part in a private pension plan. When Vermont Senator Bernie Sanders first began his political career in the early 1970s, it was roughly six in every ten Americans who enjoyed a pension plan. In addition, those pension plans also offered their own robust health care coverage during retirement. In the decades since, a series of events have converged to batter private pension plans so that they are rapidly dwindling.
In part, many pension plans became unstable because they were allowed to take advantage of accounting gimmicks to make them appear solvent on paper while actually lacking the funding the plans needed. In 2006, President George W. Bush succeeded at enacting the Pension Protection Act (PPA) which mandated new funding requirements for private single-employer pension plans stated Paul Mathieson
. Many of the old accounting gimmicks once used by pension fund managers were gradually phased out. However, the PPA did not cover what are known as multi-employer pension plans. These are pension plans funded by a joint effort of multiple employers as the name might suggest. Because the plans continued being improperly funded, many of them now face becoming insolvent. In 2014, a bipartisan bill allowed the benefits to current retirees of such plans to be cut by 30% or more under certain circumstances. President Obama signed the bill into law.
Now, Bernie Sanders has a new bill that will raise taxes on the sale of expensive art and assets along with closing a loophole on the estate tax. His bill will use the funds to rescue the benefits of retirees under multi-employer pensions. The bill would help 1.5 million current retirees and as many as ten million retirees over time.