Tackling issues on workers’ rights and safety will be top of mind for Marty Walsh if he’s confirmed to lead the Department of Labor, but he also vowed to address the mounting multiemployer pension crisis during his Senate confirmation hearing Thursday.
Mr. Walsh, who has served as Boston’s mayor since 2014 and is President Joe Biden’s nominee for labor secretary, has an extensive labor background, including leading the Boston Metropolitan District Building Trades Council from 2011-2013.
Retirement issues weren’t a focus during the Senate Health, Education, Labor and Pensions Committee hearing, as most committee members asked questions of Mr. Walsh on getting people back to work, protecting workers during the pandemic, boosting unemployment insurance and improving job training programs.
But at the end of the 2½-hour hearing, Chairwoman Patty Murray, D-Wash., brought up the nation’s multiemployer pension crisis. Lawmakers in the last Congress could not reach a deal to address the funding problem that continues to worsen. The Pension Benefit Guaranty Corp.’s multiemployer program had a deficit of $82.3 billion as of Sept. 30, 2019, according to the agency’s latest projections report released in September. The report projects a “very high likelihood” of the multiemployer program’s insolvency by September 2026 and “near certainty” by September 2027.
“If those funds fail, not only will millions of Americans face economic devastation, but it will also be catastrophic for the thousands of employers, particularly small businesses, who are trying to do right by their workers,” Ms. Murray said. “So this is an urgent crisis that really needs a swift resolution.”
Mr. Walsh committed to working with Ms. Murray on the issue. “This is one of the largest crises of the moment and I feel that it’s our obligation as a government to protect workers and protect their futures, and protecting their futures means protecting their pensions,” he said.
Mr. Walsh was not asked about the Labor Department’s Employee Benefits Security Administration or any of its rule-making initiatives under the Trump administration, including a rule that went into effect Jan. 12 stipulating that ERISA plan fiduciaries cannot invest in “non-pecuniary” vehicles that sacrifice investment returns or take on additional risk. Mr. Biden signed an executive order on Jan. 21 directing a review of the rule.
Also, Mr. Walsh wasn’t asked about the prohibited transaction exemption regarding investment advice that the previous administration finalized in December and was slated to go into effect on Feb. 16. Ronald A. Klain, White House chief of staff, issued a memo Jan. 20 indicating that all new or pending regulatory initiatives will be paused and reviewed.
Mr. Walsh appears likely to sail through the confirmation process. While several Republicans on the committee voiced concern over certain administration policy proposals — Sen. Tim Scott, R-S.C., called the Mr. Biden’s push to raise the federal minimum wage to $15 an hour “another example of bad policy, perhaps with good intention” — the hearing was non-confrontational.
Toward the end of the hearing, Sen. Richard Burr, R-N.C., the committee’s ranking member, said, “I look forward to the (chairwoman) expediting your confirmation and look forward to supporting you.”
Ms. Murray said she intends to schedule a vote in committee on Mr. Walsh’s nomination “as quickly as possible so we can move his nomination forward and he can begin the important work of leading the Department of Labor.”
Source: Pensions & Investments