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94–394 2016

PRIVATE EMPLOYER DEFINED 

BENEFIT PENSION PLANS 

HEARING 

BEFORE THE

SUBCOMMITTEE ON SELECT REVENUE MEASURES 

OF THE

COMMITTEE ON WAYS AND MEANS 

U.S. HOUSE OF REPRESENTATIVES 

ONE HUNDRED THIRTEENTH CONGRESS 

SECOND SESSION 

SEPTEMBER 17, 2014

Serial 113–SRM04 

Printed for the use of the Committee on Ways and Means 

( 


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COMMITTEE ON WAYS AND MEANS 

DAVE CAMP, Michigan, Chairman 

SAM JOHNSON, Texas 

KEVIN BRADY, Texas 

PAUL RYAN, Wisconsin 

DEVIN NUNES, California 

PATRICK J. TIBERI, Ohio 

DAVID G. REICHERT, Washington 

CHARLES W. BOUSTANY, JR., Louisiana 

PETER J. ROSKAM, Illinois 

JIM GERLACH, Pennsylvania 

TOM PRICE, Georgia 

VERN BUCHANAN, Florida 

ADRIAN SMITH, Nebraska 

AARON SCHOCK, Illinois 

LYNN JENKINS, Kansas 

ERIK PAULSEN, Minnesota 

KENNY MARCHANT, Texas 

DIANE BLACK, Tennessee 

TOM REED, New York 

TODD YOUNG, Indiana 

MIKE KELLY, Pennsylvania 

TIM GRIFFIN, Arkansas 

JIM RENACCI, Ohio 

SANDER M. LEVIN, Michigan 

CHARLES B. RANGEL, New York 

JIM MCDERMOTT, Washington 

JOHN LEWIS, Georgia 

RICHARD E. NEAL, Massachusetts 

XAVIER BECERRA, California 

LLOYD DOGGETT, Texas 

MIKE THOMPSON, California 

JOHN B. LARSON, Connecticut 

EARL BLUMENAUER, Oregon 

RON KIND, Wisconsin 

BILL PASCRELL, JR., New Jersey 

JOSEPH CROWLEY, New York 

ALLYSON SCHWARTZ, Pennsylvania 

DANNY DAVIS, Illinois 

LINDA SA ́ NCHEZ, California 

JENNIFER M. SAFAVIAN, Staff Director and General Counsel 

JANICE MAYS, Minority Chief Cousel 

SUBCOMMITTEE ON SELECT REVENUE MEASURES 

PATRICK J. TIBERI, Ohio, Chairman 

ERIK PAULSEN, Minnesota 

KENNY MARCHANT, Texas 

JIM GERLACH, Pennsylvania 

AARON SCHOCK, Illinois 

TOM REED, New York 

TODD YOUNG, Indiana 

RICHARD E. NEAL, Massachusetts 

JOHN B. LARSON, Connecticut 

ALLYSON SCHWARTZ, Pennsylvania 

LINDA SA ́ NCHEZ, California 


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C O N T E N T S 

Page 

Advisory of September 17, 2014 announcing the hearing .................................... 2 

WITNESSES 

Deborah Tully, Director of Compensation and Benefits Finance and Accounting Analysis, Raytheon, Testimony .................................................................... 6 

R. Dale Hall, Managing Director of Research, Society of Actuaries, Testimony 14 

Scott Henderson, Vice President of Pension Investment and Strategy, The 

Kroger Company, Testimony ............................................................................... 24 

Jeremy Gold, FSA, MAAA, Jeremy Gold Pensions, Testimony ........................... 34 

Diane Oakley, Executive Director, National Institute on Retirement Security, 

Testimony ............................................................................................................. 38 

SUBMISSIONS FOR THE RECORD 

AARP ........................................................................................................................ 66

Church Alliance ....................................................................................................... 80 

National Center for Policy Analysis ....................................................................... 84 

National Center for Policy Analysis.2 .................................................................... 88 

National Education Association .............................................................................. 89 

The ERISA Industry Committee ............................................................................ 91 

United Brotherhood of Carpenters and Joiners .................................................... 99 

U.S. Chamber of Commerce .................................................................................... 101 


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PRIVATE EMPLOYER DEFINED BENEFIT 

PENSION PLANS 

WEDNESDAY, SEPTEMBER 17, 2014 

U.S. HOUSE OF REPRESENTATIVES, 

COMMITTEE ON WAYS AND MEANS, 

SUBCOMMITTEE ON SELECT REVENUE MEASURES, 

Washington, DC. 

The Subcommittee met, pursuant to notice, at 10:19 a.m., in 

Room 1100, Longworth House Office Building, the Honorable Patrick Tiberi [Chairman of the Subcommittee] presiding. 

[The advisory of the hearing follows:] 


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HEARING ADVISORY 

Chairman Tiberi Announces Hearing on Private 

Employer Defined Benefit Pension Plans 

1100 Longworth House Office Building at 10:15 AM 

Washington, September 10, 2014 

Congressman Pat Tiberi (R–OH), Chairman of the Subcommittee on Select Revenue Measures, today announced that the Subcommittee will hold a hearing on defined benefit pension plans offered by private sector employers, including both multiemployer plans and single employer plans. The hearing will take place on 

Wednesday, September 17, 2014, in 1100 Longworth House Office Building, 

beginning at 10:15 A.M. 

In view of the limited time available to hear witnesses, oral testimony at this 

hearing will be from invited witnesses only. However, any individual or organization 

not scheduled for an oral appearance may submit a written statement for consideration by the Subcommittee and for inclusion in the printed record of the hearing. 

A list of invited witnesses will follow. 

BACKGROUND: 

Multiemployer (‘‘ME’’) pension plans collectively are less than 50-percent funded, with underfunding exceeding $400 billion. The Congressional Budget Office estimates that the Pension Benefit Guarantee Corporation’s (‘‘PBGC’’) ME insurance 

program, financed by premiums from ME plans and not backed by taxpayers, will 

run out of cash in 2021 and requires $9 billion over the next decade to pay statutory 

benefits. PBGC’s projected ME deficit for 2023 is $50 billion. With respect to ME 

plans that become insolvent: (1) retirees will receive a maximum annuity of $12,870 

from PBGC until PBGC runs out of cash, and (2) employers will be subject to substantial withdrawal liability that can exceed the value of the employer. 

The current investment environment and low interest rates combined with increasing life expectancies also present challenges to single employer (SE) plans, although they generally are better funded than multiemployer plans. (PBGC projects 

a deficit in its SE program of $8 billion for 2023.) Still, workers participating in, 

and employers sponsoring, such plans face a variety of challenges. For instance, employees whose employer is transitioning new employees into a defined contribution 

plan (e.g., a 401(k) plan) face the prospect of their employer being forced to freeze 

the defined benefit plan for all employees to avoid violating the non-discrimination 

rules. H.R. 5381, introduced July 31, 2014, by Chairman Tiberi, and H.R. 2117, introduced May 22, 2013, by Ranking Member Richard Neal (D–MA), are designed to 

protect longer-service participants in defined benefit plans that are closed to new 

entrants by allowing cross-testing between defined benefit and defined contribution 

plans. Other issues affecting single employer plans include the impact of the in-service distribution rules on employees’ retirement schedules and the effect of mortality 

tables on funding requirements. 

In announcing this hearing, Chairman Tiberi said, ‘‘I have heard for years now 

from hundreds of businesses and nonprofits about the need for pension reforms, especially for defined benefit plans. Increasing pension costs have 

hampered both the job growth and capital investment needed to grow the 

economy and have threatened retirement security for American workers. 

The cost of doing nothing is too high a price to pay. This hearing will give 

us the opportunity to examine challenges facing, and opportunities to 

strengthen, the defined benefit pension system.’’ 

FOCUS OF THE HEARING: 

The hearing will focus on some of the challenges facing employers, employees, and 

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rity. It will examine the funding rules governing multiemployer plans, as well as 

selected issues that affect single employer plans. 

DETAILS FOR SUBMISSION OF WRITTEN COMMENTS: 

Please Note: Any person(s) and/or organization(s) wishing to submit written comments for the hearing record must follow the appropriate link on the hearing page 

of the Committee website and complete the informational forms. From the Committee homepage, http://waysandmeans.house.gov, select ‘‘Hearings.’’ Select the hearing for which you would like to submit, and click on the link entitled, ‘‘Click here 

to provide a submission for the record.’’ Once you have followed the online instructions, submit all requested information. ATTACH your submission as a Word document, in compliance with the formatting requirements listed below, by the close 

of business on Wednesday, October 1, 2014. Finally, please note that due to the 

change in House mail policy, the U.S. Capitol Police will refuse sealed-package deliveries to all House Office Buildings. For questions, or if you encounter technical 

problems, please call (202) 225–3625 or (202) 225–2610. 

FORMATTING REQUIREMENTS: 

The Committee relies on electronic submissions for printing the official hearing 

record. As always, submissions will be included in the record according to the discretion of the Committee. The Committee will not alter the content of your submission, 

but we reserve the right to format it according to our guidelines. Any submission 

provided to the Committee by a witness, any supplementary materials submitted for 

the printed record, and any written comments in response to a request for written 

comments must conform to the guidelines listed below. Any submission or supplementary item not in compliance with these guidelines will not be printed, but will 

be maintained in the Committee files for review and use by the Committee. 

1. All submissions and supplementary materials must be provided in Word format and MUST 

NOT exceed a total of 10 pages, including attachments. Witnesses and submitters are advised 

that the Committee relies on electronic submissions for printing the official hearing record. 

2. Copies of whole documents submitted as exhibit material will not be accepted for printing. 

Instead, exhibit material should be referenced and quoted or paraphrased. All exhibit material 

not meeting these specifications will be maintained in the Committee files for review and use 

by the Committee. 

3. All submissions must include a list of all clients, persons and/or organizations on whose 

behalf the witness appears. A supplemental sheet must accompany each submission listing the 

name, company, address, telephone, and fax numbers of each witness. 

The Committee seeks to make its facilities accessible to persons with disabilities. 

If you are in need of special accommodations, please call 202–225–1721 or 202–226– 

3411 TTD/TTY in advance of the event (four business days notice is requested). 

Questions with regard to special accommodation needs in general (including availability of Committee materials in alternative formats) may be directed to the Committee as noted above. 

Note: All Committee advisories and news releases are available on the World 

Wide Web at http://www.waysandmeans.house.gov

f 

/. 

Chairman TIBERI. Thank you for joining us today. This hearing 

will come to order. Good morning, thank you for joining us for our 

subcommittee hearing on Private Employer Defined Benefit Pension Plans. Today we examine the challenges facing employers, employees, and retirees who rely on both single and multi-employer 

defined benefit pension plans to help provide retirement security. 

These challenges pose serious threats to American workers and employers. 


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I know what it means personally for a family to lose the pension 

they were relying on. When I was in high school my father lost his 

job. He lost his pension. We lost our health care. It was a volatile 

time, and I want families to avoid that type of situation. 

First I have heard from a number of companies with concerns 

that treasury rules relating to non-discrimination testing for singleemployer defined benefit plans may cause plans to freeze, and participants to lose their benefits. In response to this issue, Ranking 

Member Richard Neal and I have introduced legislation to offer 

non-discrimination testing to close pension plans. It would prevent 

companies from having to freeze their plans, and would prevent 

thousands of participants from losing their benefits. 

There are a number of other issues currently affecting private 

defined benefit pensions, and it is my hope that this hearing will 

give us an opportunity to gain a different perspective or perspectives on these issues. 

The funding challenges facing multi-plans are threatening both 

retirement security for American workers and the solvency of employers, whose ability to invest and create jobs is being hampered 

by these pension obligations. I have said it for years: The cost of 

doing nothing is too high of a price to pay. 

I applaud Chairman Kline and the Education Workforce Committee on their work on the issue, as well. I look forward to gaining 

as much information as possible, as we determine an appropriate 

path forward to deal with these very important issues. 

I thank our witnesses for being here, and now yield to Ranking 

Member Neal. 

Mr. NEAL. Thank you, Mr. Chairman. Thanks for calling this 

timely hearing. A reminder to the audience that it is almost to the 

day—six years—since America witnessed the financial collapse and 

the near end of our economic system, as reminded at the time by 

the Secretary of the Treasury and the Chairman of the Federal Reserve Board. So I think that this issue continues to be timely. 

For those of us who were members of the House at that time, to 

stand in the well of the House and to watch the stock market in 

one hour dip by 700 points is compelling evidence of what I think 

that this hearing is about today. So I do want to acknowledge— 

and, by the way, that personal perspective that you offered is telling, because one of the questions that is seldom is ever raised by 

the media is how do we come to our conclusions, and much of it 

is based on our own personal experience, as it is with the witnesses 

today. 

So, I want to thank you for the hearing. It is an issue that deserves our much-needed attention. And it is my hope that we will 

have an opportunity to use the hearing as a catalyst for action. 

It is also fitting that we are calling this hearing days before we 

celebrate the 40th anniversary of the passage of ERISA. Before 

ERISA there was little to no protection for American workers enrolled in pension plans. In fact, there were high-profile cases of 

Americans losing their retirement benefits. 

Congress responded to this crisis by passing ERISA. Today 

ERISA serves as an example for us to follow, standing as a testament to how working together in a bipartisan way ensures Americans have access to financially secure retirement. Unfortunately, it 


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took Americans losing their retirement benefits before Congress responded. Today we should not allow the same thing to happen before we act. 

We are at the precipice of an impending retirement crisis in 

America that is seemingly twofold: Americans are not either saving 

enough, or, at retirement time, we are seeing changes to defined 

benefit plans. And, often times, those plans are considered to be 

underfunded. It astounds me in this day and age that half of the 

people that get up and go to work every day in America are not 

in a retirement plan. 

We know the statistics. The United States has a retirement deficit of $6.6 trillion and PBGC estimates that, for the next decade, 

private sector employer defined benefit pension plans are going to 

carry a significant deficit. These staggering statistics demonstrates 

that we, as Americans, need to do more to prepare for our financial 

future. We must do all we can to encourage more individuals to 

save, whether through financial literacy programs, or through the 

Tax Code. Now is not the time to cut the hard-earned benefits of 

millions of Americans. 

It has been put forward by some that the best way to address 

the private sector DB pension deficit is to cut benefits. I could not 

disagree more. Pension benefits have been earned through hard 

work, and these employees have relied on these guarantees to fund 

their retirement. Before looking to cut those earned benefits, we 

need to look at our current funding rules, along with the insurance 

guarantee through the PBGC to see if there are ways to reform the 

current system before looking to cut benefits. Remember that if 

PBGC is not strong, then the guarantees given to workers are eroded. 

Many new entrants into the private sector workforce will never 

know the security of a defined pension plan, which provides the 

employee predictable and secure benefits for life. Under DB plans, 

workers are promised a specific benefit at retirement, a benefit 

they know in advance, and one that is not subjected to the vagaries 

of the markets. 

We can only look to previous decades for example of the perils 

of investing solely in the stock market, whether the 401(k) tragedies of Enron, WorldCom, or the financial meltdown in 2008 comes 

to mind. 

I commend the chairman for calling this hearing. It is extremely 

important for us to find a solution to the problems vexing the private sector defined benefit plans, and to hear solutions that will be 

put forward today, solutions that maintain the integrity of the defined benefit, and ensures that the promises made will be the 

promises kept. 

And I thank the chairman. I am personally delighted that you 

used your personal example of what happened to your dad. In my 

case, one of the reasons I have been such a fervent supporter of Social Security, when my parents died, that is how we lived, survivor 

benefits. And again, it is the personal experience that one has as 

they come to this institution, and how they see the development of 

what ought to be happy years, retirement years. 

Thanks, Mr. Chairman. 

Chairman TIBERI. Thank you, Mr. Neal, for your leadership. 


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Before I introduce today’s witnesses, I ask unanimous consent 

that all Members’ written statements be included in the record. 

[No response.] 

Chairman TIBERI. Without objection, so ordered. 

Let me get to the witnesses. Deborah Tully, director of compensation and benefits finance accounting analysis at Raytheon in Massachusetts, thank you for being here. 

R. Dale Hall, managing director of research at the Society of Actuaries in Illinois. Thank you. 

Scott Henderson, vice president of pension investment and strategy for the Kroger Company in the great state of Ohio. Thank you. 

Jeremy Gold, Jeremy Gold Pensions in New York City. Thank 

you. 

Last, but not least, Diane Oakley, executive director of the National Institute on Retirement Security here in Washington, D.C. 

I will remind all of you that you have 5 minutes to present your 

oral testimony. Your full written testimony has been submitted for 

the record. 

Ms. Tully, we will begin with you. 

STATEMENT OF DEBORAH TULLY, DIRECTOR OF COMPENSATION AND BENEFITS FINANCE AND ACCOUNTING ANALYSIS, 

RAYTHEON 

Ms. TULLY. Good morning, Chairman Tiberi, Ranking Member 

Neal, and committee members. I am Deborah Tully, director of 

compensation and benefits finance at Raytheon Company. I am a 

fellow of the Society of Actuaries, and an enrolled actuary responsible for reporting compliance and financial analysis for Raytheon’s 

retirement benefit programs. Thank you for the opportunity to address the subcommittee on pension matters, specifically the nondiscrimination testing regulations as they apply to closed plans. 

Before I do so, let me give some background on Raytheon and our 

retirement programs. Raytheon is a technology and innovation 

leader, specializing in defense, security, and civil markets throughout the world. Founded in 1922, Raytheon is headquartered in 

Massachusetts, and has 61,000 employees. Our 2013 net sales were 

$24 billion. 

Raytheon has maintained defined benefit plans, or DB plans, 

since 1950, and defined contribution, or DC retirement plans, since 

1984. Closed to new employees hired after 2006, Raytheon’s DB 

plans covered approximately 172,000 people. Raytheon’s DC covers 

92,000 people, and is made up of two components: a 401(k) plan 

with a company match, and a supplemental DC plan for employees 

hired after 2006. 

Like many companies, we have been transitioning from a DB retirement model to a DC model, most notably by closing our DB 

plan to new employees, and offering them a DC plan, while continuing to provide the DB plan to employees hired before 2007. 

This gradual change minimizes the impact to existing employees, 

while providing the greatest opportunity for new employees who 

are enrolled in the DC plan to maximize their retirement benefit. 

Under the Internal Revenue Code, DB plans must meet certain 

non-discrimination testing standards to ensure that they do not 

discriminate in favor of highly-compensated employees. IRS rules 


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generally define highly-compensated employees as those earning 

more than $115,000 annually. To satisfy non-discrimination requirements, a DB plan must pass three types of tests, which often 

involve complex actuarial calculations to ensure that a plan is not 

discriminatory. 

For a plan that is closed to new participants, each of these tests 

gets more difficult to pass over time, which ultimately could jeopardize the tax-qualified status of the plan, unless the employer 

makes changes. This occurs because the group of employees earning benefits under a closed plan will gradually have longer service, 

and will have earned compensation increases over their careers. 

Over time, those compensation increases will cause many employees to be treated as highly compensated, and, as a result, the plan 

will risk failure. Each year, more and more employers are facing 

this issue, as the demographic profile of their closed DB plan 

evolves. 

Under current regulations, an employer has limited options to 

ensure compliance if its closed plan is at risk of failure. While some 

employers take interim steps to modify their plans, such as removing some highly-compensated employees from the plan, or changing 

certain features of the plan, these fixes are only temporary solutions. Ultimately, many employers choose to fully freeze their 

plans, since this is the only permanent solution to the problem. 

A full plan freeze means that employees will no longer earn benefits in the DB plan. This negatively impacts mid- to late-career 

employees, who are about to earn the most significant portion of 

their retirement benefit, since the most valuable accruals under a 

DB plan occur towards the end of an employee’s career. 

Another option to avoid testing non-compliance is to reopen the 

pension plan to employees who are not in the plan. While every 

company has to evaluate their plan design, demographics, and financial situation based on their specific circumstances, this is an 

unlikely choice for most employers, given the trend away from DB 

plans and toward DC plans, and the fact that many competitors do 

not offer DB plans to new employees. 

In response to the ongoing concern surrounding non-discrimination testing, the Treasury Department issued non-discrimination 

testing relief late last year for certain closed DB plans. Valid 

through 2015, the relief allows employers to combine their DB and 

their DC plans for non-discrimination testing, referred to as crosstesting, as long as the plan satisfied certain criteria before the end 

of 2013. This allows employers to take the DC benefits offered to 

all employees into consideration when evaluating the level of benefits being provided. 

This temporary relief is very much appreciated, and reflects 

progress. However, it is not a complete solution. Since it does not 

address all of the testing requirements, many employers could still 

face testing failure. 

In closing, employers who have chosen to maintain their DB 

plans for some employees as they transition to a DC plan for others, will face non-discrimination issues at one point or another 

under the current regulations. While employers may have nearterm options to avoid failure, a long-term solution is needed in 


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order to allow employees to continue to earn benefits under the DB 

plan. 

We believe that H.R. 5381, introduced by Chairman Tiberi and 

Ranking Member Neal, is a bipartisan solution that addresses 

many of these non-discrimination testing concerns. Under current 

regulations, we are penalizing employers who have chosen to make 

a gradual transition from DB to DC retirement programs, rather 

than taking a more abrupt approach. Without a long-term solution, 

non-discrimination regulations will further drive employers to exit 

the DB system at the expense of the participants that the regulations were intended to protect. 

Thank you for the opportunity to speak today, and I look forward 

to answering any questions you may have. 

[The prepared statement of Ms. Tully follows:] 


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f 

Chairman TIBERI. Thank you. 

Mr. Hall, recognized for 5 minutes. 

STATEMENT OF R. DALE HALL, MANAGING DIRECTOR OF 

RESEARCH, SOCIETY OF ACTUARIES 

Mr. HALL. Thank you, Mr. Chairman, Mr. Ranking Member. 

Thank you for the opportunity to testify today. My name is Dale 

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aries. SOA is an educational, research, and professional organization of more than 24,000 actuaries worldwide. We conduct a wide 

range of research to provide technical resources to advance the 

knowledge and capabilities of our profession, and to inform public 

policy development. One thing the SOA does not do is take positions on specific policy proposals; we are not an advocacy organization. 

As we begin this discussion, I think it would be helpful to understand that our retirement plan mortality studies generally include 

two parts. The first is a mortality table, which contains data on the 

actual death rates of a given population, including any relevant 

subgroups. And the second part is an improvement scale, which is 

an experience-based estimate on expected rates of improvement in 

longevity of a population over time. 

The SOA has long been the primary source for mortality and 

mortality improvement studies on U.S. private-sector defined benefit plans. SOA studies on retirement mortality date back to the 

early 1950s. 

The Secretary of the Treasury establishes the mortality assumptions to be used to calculate certain liabilities for pension plans. 

The SOA conducted a study in the 1990s of uninsured pension plan 

mortality to ensure that the Treasury Department would have current and thorough information available for this process. The result 

of that study was the release in 2000 of the SOA’s RP 2000 Mortality Tables, and a reaffirmation of our Mortality Improvement 

Scale AA. 

As part of its periodic review of retirement plan mortality assumptions, the SOA’s retirement plans experience committee initiated a new pension study in 2009. A request for data was sent out 

to retirement plans, and plan experience was ultimately collected 

from calendar years 2004 to 2008. And the result of that study was 

the draft release of our RP 2014 mortality tables this past February. The draft table is based on a large set of data that represents about 10.5 million life-years of experience, and over 

220,000 deaths. 

That committee also focused on providing an updated model for 

mortality improvement on retirement programs. That study culminated with the draft release of the MP 2014 Mortality Improvement Scale this past February. The MP 2014 report provides a 

model for mortality improvement rates that would be applied to the 

RP 2014 mortality table for use in future calendar years. 

Both RP 2014 and MP 2014 were exposed for a 120-day comment 

period from February to May. The SOA is now working to review 

and respond to those comments. We are working towards publishing final tables and reports by a target completion date of October 31, 2014. 

The exposure draft for RP 2014 does estimate the financial impact on transitioning from currently-used mortality tables and improvement scales to the new RP 2014/MP 2014 basis. When comparing the change from the 2000 mortality study to the 2014 mortality study, the SOA estimates the general change in a plan liability calculation would be an increase of 4 to 8 percent, depending 

upon the plan’s demographics. 


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My written testimony has a detailed discussion of the regulatory 

uses of mortality tables, I will just summarize them briefly here. 

The Pension Protection Act of 2006 amends the minimum funding requirements for single-employer plans. It also requires the 

Treasury Department to review mortality rates every 10 years. In 

setting these funding requirements, the Treasury Department has 

frequently referenced our RP 2000 Mortality Table and Improvement Scale AA. We anticipate the Treasury Department will carefully review our upcoming RP 2014 and MP 2014 studies and utilize them as they see fit. 

In conclusion, the effort to develop this new mortality study has 

been a five-year undertaking that has involved many, many highly 

qualified actuaries. Key decisions have been validated by independent committees, and the work has been peer-reviewed at multiple points in the process. The SOA process for experienced studies 

is open and transparent, and we seek input and objective analysis 

from a broad range of experts. 

We have approached this project with a great deal of rigor, because of the very important uses of these mortality tables and mortality improvement scales. We believe it is critically important for 

professional actuaries to have access to reliable and well-supported 

data so they, in turn, can provide meaningful projections to the 

broad range of stakeholders responsible for governing private pension plans. 

I appreciate this opportunity to testify on behalf of the Society 

of Actuaries, and I look forward to answering any questions you 

may have. 

[The prepared statement of Mr. Hall follows:] 


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f 

Chairman TIBERI. Thank you, Mr. Hall. 

Mr. Henderson, you are recognized for 5 minutes. 


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24 

STATEMENT OF SCOTT HENDERSON, VICE PRESIDENT OF 

PENSION INVESTMENT AND STRATEGY, THE KROGER COMPANY 

Mr. HENDERSON. Thank you, Chairman Tiberi, Ranking Member Neal, and Members of the Subcommittee. Thank you for this 

opportunity to testify on the state of the multi-employer pension 

system. My name is Scott Henderson, I am vice president of pension investments and strategy for The Kroger Company. I am also 

an employer trustee on two of the largest multi-employer pension 

plans in the food industry. 

Kroger is one of the largest retailers in the world. We operate in 

more than 2,600 stores and 34 states. We are also one of the largest unionized employers in the United States. We employ more 

than 375,000 associates, a majority of whom are represented by 

labor unions. In the past six years we have created 40,000 new 

jobs. We have hired more than 22,000 veterans, and we recently 

announced plans to hire 20,000 individuals for new, permanent positions. We also participate in 36 multi-employer pension plans. Combined, these plans manage over $70 billion in assets, and have more than $100 billion in associated liabilities. Needless to 

say, this issue is very important to us. 

The uncertain fate of the multi-employer system is a huge concern to our associates, our retirees, and our company. The system 

is at great risk, and it threatens the retirement security of millions 

of Americans. 

I want to focus on five points: one, the multi-employer system is 

broken, and desperately needs reform; two, many plans are headed 

for insolvency; three, the PBGC’s multi-employer insurance fund is 

also headed for insolvency; four, labor and management trustees, 

working together and with the PBGC, need new tools to adjust accrued benefits in the most severely funded plans; and, five, Congress must act now. 

My first point is that the system needs reform. My written statement describes the fundamental problems with the multi-employer 

pension system. It was designed more than 65 years ago. Few 

would have predicted that today’s contributing employers would become responsible for the risk of unfunded liabilities left by previous 

employers. Existing employers are leaving these plans to avoid this 

risk. New employers refuse to join because the plans are in trouble. 

And the remaining employers are unable to act because of the 

growing liabilities they face. It creates a spiral that is nearly impossible to reverse. 

And that leads to my second point. Many plans are severely underfunded now, and will become insolvent within a decade. The 

PBGC estimates that nearly 1.5 million participants are at serious 

risk because their plans are severely underfunded. In Kroger’s 

case, most of the plans we participate in are stable, yet a few large 

plans—Central States in particular—will fail without immediate 

reform. When these plans fail, many participants will experience 

dramatic benefit reductions. 

The failure of these plans will threaten the viability of contributing employers and other plans, creating a domino effect, which 

leads to my third point. As more plans fail, the demands on the 

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ance fund as a backstop to assist funds in need. No one anticipated 

the profound impact of changes in demographics, the contraction in 

the trucking industry, stock market shocks, and other factors. 

The unfortunate reality is that the insurance fund is headed for 

insolvency. Several government agencies have reached the same 

conclusion, including the PBGC itself, in its most recent projections 

reports. The Congressional Budget Office projects that the multiemployer fund will be exhausted by 2021. For contributing plans, 

it is like paying premiums to an insurance company that we know 

is going out of business. And when the PBGC becomes insolvent, 

the retirement benefit for millions of Americans may disappear, as 

well. 

This leads to my fourth point. To save these plans, trustees need 

new tools. In extreme cases, we need the ability to adjust accrued 

benefits. Last year the NCCMP issued a report entitled, ‘‘Solutions, 

Not Bailouts.’’ Among these recommendations was that labor and 

management trustees, working together, be permitted to adjust 

benefits and plans that will otherwise become insolvent. Importantly, this proposal will succeed in preserving benefits without relying on taxpayer dollars. Adopting this proposal will involve difficult decisions, but the alternatives are far worse. 

I completely agree with Tom Nyhan of Central States when he 

testified last year—and I quote—‘‘There is another fundamental 

rule that is going to trump the anti-cutback rule, and that is called 

arithmetic. It is not a question of if there are going to be benefit 

cuts. There are going to be benefit cuts. The question is when and 

how they are going to happen.’’ 

And that is my final point. Congress must act now. We cannot 

wait until 2021, or even 2016. Trustees need new tools to delay and 

minimize benefit cuts as much as possible, and save the retirement 

benefits of millions of Americans. 

I am looking forward to working with this Subcommittee, and I 

thank you for the opportunity to appear today. 

[The prepared statement of Mr. Henderson follows:] 


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Chairman TIBERI. Thank you, Mr. Henderson 

Mr. Gold, you are recognized for 5 minutes. 

STATEMENT OF JEREMY GOLD, FSA, MAAA, JEREMY GOLD 

PENSIONS 

Mr. GOLD. Chairman Tiberi, Ranking Member Neal, and Members of the Subcommittee, thank you for the opportunity to present 

my views with respect to private employer defined benefit pension 

plans. My views are my own, and do not represent any other persons or organizations. 


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I am an independent consulting actuary and economist, specializing in the financial aspects of pension plans. I will address the 

measurement of liabilities and costs of multi-employer pension 

plans. My central message is that liabilities are understated by as 

much as 50 percent, and annual costs are underestimated by as 

much as 100 percent. Good policies cannot be based on bad numbers. 

Actuaries performing valuations for multi-employer plans have 

always been challenged by employers wanting lower costs and employees wanting larger benefits. Circa 1980, with Treasury bond 

yields in double digits, naturally conservative actuaries were discounting benefit promises at interest rates below seven percent. By 

2000, with equity markets soaring, and Treasury rates in the 

neighborhood of 6 percent, actuaries were discounting at about 8 

percent. Since 2000, although Treasury rates have fallen to about 

3 percent, indicating a widespread decrease in interest rates, and 

a commensurate share increase in liabilities, actuarial discount 

rates have, for the most part, held steady. 

The desires of employers and employees make it all but impossible for consulting actuaries, with the best of intentions, to lower 

discount rates accordingly. The result is that liability values are severely understated, costs are underestimated, and actuarial assumptions have been too optimistic. 

Once a deficit develops, once there is a hole in the ground, there 

are only two ways to fix the problem: smaller benefits for employees, larger costs for employers. The proposals being discussed are 

very reasonably some combination of these two approaches. I am 

agnostic as to how much benefits should be cut versus how much 

additional cost should be borne by employers. 

My message is this: unless accurate estimates of future costs are 

on the table and open for all to see, the combination of benefit cuts 

and employer costs, increases, will not reduce the deficit, will not 

fill the hole. On the contrary, the hole will get bigger unless two 

necessary steps are taken: first, get the right price for all future 

benefit accruals, and make sure, at an absolute minimum, that 

these are paid; second, accurately measure the deficit and decide 

when, how, and who pays to fill the hole. 

How can we get the right price—Actuaries trying to balance the 

needs of employees and employers cannot be expected to push valuations uphill when the interested parties want to go downhill. I believe that the concept of an independent consulting actuary putting 

a value on these benefits is irreparably flawed. The parties setting 

the price must have very significant skin in the game and capital 

at risk. The party that sets the price must also guarantee the benefits and hold sufficient capital to make good on its guarantee. 

The need to have capital at risk guaranteeing benefit promises 

implies something like insurance companies with actuaries whose 

primary obligation is to the company that puts up the capital, 

guarantees the benefits, and employs the actuary. These institutions do not—the institutions I have in mind do not have to be insurance companies as we know them, but they must combine capital, benefit guarantees, and actuarial expertise. 

In summary, we should measure accrued liabilities and future 

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ties with skin in the game, combining capital, benefit guarantees, 

and actuarial expertise. To avoid making matters worse than they 

already are, plans must, at an absolute minimum, pay the full 

price for newly-earned benefits, or reduce accruing benefits to 

match available funding, and we must pay the interest on unfunded accrued liabilities. 

Thank you. 

[The prepared statement of Mr. Gold follows:] 


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Chairman TIBERI. Thank you, Mr. Gold. 

Ms. Oakley, you are recognized for 5 minutes. 

STATEMENT OF DIANE OAKLEY, EXECUTIVE DIRECTOR, 

NATIONAL INSTITUTE ON RETIREMENT SECURITY 

Ms. OAKLEY. Thank you, Chairman Tiberi, Ranking Member 

Neal, Members of the subcommittee, for the opportunity to testify 

here today. I am Diane Oakley, the executive director of the NaVerDate Sep 11 2014 01:53 Jul 06, 2016 Jkt 094394 PO 00000 Frm 00042 Fmt 6633 Sfmt 6602 I:\WAYS\OUT\94394.XXX 94394

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tional Institute on Retirement Security. We are a non-partisan research organization working in the retirement security space. 

Defined benefit plans enable Americans to be self-sufficient. They 

provide businesses the workforce management tool, and they support the U.S. economy. Employees value the predictable income 

that lasts, giving them independence after a lifetime of work. Employers value the cost-effective tool for recruitment, retention, and 

managing their workforce. 

Forty years ago, the Employee Retirement Income Security Act 

became law, bringing financial certainty to private-sector workers. 

Nobel economist Robert Merton recently summed up the primary 

question of concern for retirement savers: Will I have sufficient income in retirement to live comfortably— 

Congress had the right focus in 1974, with ERISA: retirement income security. The typical 1970s American was identified as a 47- 

year-old housewife who lived with her mechanic/machinist husband 

in the chairman’s state of Ohio, just outside of Dayton. His bluecollar job had a pension that, combined with Social Security, would 

provide $12,000 of income, a middle-class income in that time. 

Typical American profile is quite different today. With less access 

to pensions, they are extremely worried about their retirement. 

Eighty-five percent of Americans are concerned about their retirement prospects, and fifty-five percent are very concerned. For 

Americans with DB pensions, it is easier to address Merton’s question on retirement security. If someone works for 30 years, if they 

have a pension, perhaps they can replace 45 percent of their preretirement income. 

Pension income helps older households keep them out of poverty. 

Retirees with pensions today rely less on public assistance, which 

saved governments $8 billion in 2010 alone. Yet, at the same time, 

55 percent of older, middle-income households relied on pension income to stay middle class. 

Unfortunately, pension income is declining for retirees. In 1998, 

52 percent of older Americans had a pension income. By 2000 that 

had fallen to just 43 percent. Households today in the workforce 

near retirement represent the last generation of American workers 

with widespread pension coverage. Sixty percent of households between ages 55 and 64 have some type of DB plan, while those 

younger than 45 have pension coverage at half that level. 

Today workers are more likely to rely on an individual or retirement account, like a 401(k), which can fluctuate dramatically with 

stock markets, and can be outlived. The shift from DB also is a loss 

for local economies. Pension steady income, regardless of stock 

market fluctuations, means that they are considered economic stabilizers during economic downturns. 

In 2012, private-sector DB plans paid $167 billion to 13 million 

retirees from private-sector employers, giving them an annual benefit of about $14,000, on average. Spending from those benefits collectively supported 2.3 million jobs in America, and generated $347 

billion in economic output, and provided $50 billion in federal, 

State, and local income taxes. 

Fueled in part by changes in the nature of the private-sector 

workforce, as well as accounting and government regulations that 

created more volatility and less predictable balance sheets, many 


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private employers offering pensions have chosen to freeze workers’ 

DB plans. The Bureau of Labor Statistics indicates that 10 percent 

of all private employers offering new employees DB pensions today 

only covers about 18 percent of that workforce. 

Reflecting this trend, 45 percent of workers with pensions are 

concerned that their employers will reduce their pension, and 37 

percent are concerned that they will close their plan. The switch 

to DB plans carries counter-cyclical risks for employers, such as increased severance pay, higher benefit costs, and results in lower 

mobility within organizations. 

Studies have found that employers with DC plans are finding 

older employees staying on in the workforce, and causing choke 

points in their talent pipelines. But we have also seen a recent 

trend with Kodak, for example, which announced that it will improve its DB plan, while foregoing its employer match in its 401(k). 

With the disappearance of secure, predictable retirement income, 

and declines in overall workplace coverage, the American workers 

face a retirement savings burden that is heavier and more troubling than ever before. Recently, the Federal Reserve released a 

survey of American workers’ well-being, and what they found is, 

even though workers today have more responsibility for their own 

retirement, most Americans give no, little, or just some thought to 

planning for retirement. For those who do plan, their plan is to 

keep on working and Social Security. In—— 

Chairman TIBERI [continuing]. If you can—— 

Ms. OAKLEY [continuing]. 1991, a researcher commented—— 

Chairman TIBERI. Ms. Oakley, if you can wrap it up, your time 

has expired. 

Ms. OAKLEY. To reach the second hundred years of pensions, I 

think we need to make sure we keep the pensions we have today, 

find new ways to encourage pensions, and keep everyone’s DB plan 

Social Security. 

[The prepared statement of Ms. Oakley follows:] 


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f 

Chairman TIBERI. Thank you. 

Ms. OAKLEY. Thank you. 

Chairman TIBERI. Thank you all. Very good testimony. 

Ms. Tully, begin with you. You mentioned that the Treasury Department has released temporary relief through 2015, which, I do 

agree, is a welcome progress. It is my understanding that they 

have also sought comments on some additional possible approaches 

that they may take. Can you comment on that—Would that be 

helpful—Would that be something that would solve the problem 

that you outlined in your testimony—— 


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Ms. TULLY. Yes, thank you, Chairman. As you mentioned, 

Treasury did provide relief late last year. And, as a part of that relief, in their notice they actually did request comment on several 

possible proposals for potential solutions. And while those solutions 

may potentially help some employers, due to their complexity, and 

the limited nature of those solutions, we understand from industry 

organizations that a majority of employers will likely not be able 

to utilize those potential solutions, and even would have a challenge utilizing some combination of those. 

And that is why we actually support a long-term solution, such 

as what is put forth in the Neal-Tiberi bill over what some of these 

potential complicated Treasury solutions are. 

Chairman TIBERI. So you mentioned the long-term solution. 

Ms. TULLY. Yes. 

Chairman TIBERI. And without it, in your testimony, you mention that employers might be heading for the exits with respect to 

those important plans that Ms. Oakley just talked about. 

Ms. TULLY. Yes. 

Chairman TIBERI. Can you expand on that, from where you sit, 

as someone who has to deal with reality and not what we would 

hope would happen—— 

Ms. TULLY. Absolutely. So, as I mentioned in my testimony, as 

companies start to come across these non-discrimination testing 

issues, there are some potential near-term solutions that they can 

use to solve the problems, such as removing some highly-compensated employees from their plans, or tweaking their plan design. But, again, those become very temporary solutions. 

So, from a practical standpoint, when an employer is actually 

evaluating their choices, and realizing that they need to operate 

this defined benefit plan, or their retirement programs in general 

to provide, hopefully, consistent benefits to their employees, they 

have to make choices for—based on their business circumstances, 

based on their competitiveness. 

And, often times, we are seeing companies are making a choice 

simply to fix the non-discrimination testing issue permanently, and 

move directly to a plan freeze, when, in reality, these are exactly 

the companies that are—were initially trying to make a more gradual transition to that type of a program, and now they are faced 

with having to make it permanently through a plan freeze. 

Chairman TIBERI. Thank you. Mr. Henderson, you correctly 

mentioned in your testimony—both your written and your oral testimony—that CBO projects that The PBGC multi-employer insurance fund will be exhausted by 2021. 

My question is that even the plan that you and I support that 

you mentioned—solutions, not bail-outs—even if that were signed 

by the President—and that is an assumption at this point, because 

stakeholders aren’t quite all there yet—but assuming that we ultimately get there, PBGC still estimates that it would need an additional $1.4 billion per year to have a 50 percent chance of avoiding 

insolvency. 

You are an expert in this area, and not everybody is, on the 

multi-side, in particular. Any thoughts on how we solve the rest of 

the problem, once we have—we figure out the first part—— 


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Mr. HENDERSON. Thank you, Chairman, yes, I do. The 

NCCMP proposal includes a number of recommendations. And in 

total, what I think the—those recommendations are designed to do 

are to keep today’s liabilities inside the plans where they currently 

exist, and give trustees, both employer and union trustees, new 

tools with which to address the issues. And, in my experience, 

every single plan that I am on, and the other plans I have looked 

at, they are all different, and they all require unique solutions to 

solve the problems that they have. 

So, I can’t argue with the contention of some that the, you know, 

premiums may need to be adjusted by plans contributing to PBGC. 

But there are a number of other tools that we need. And, in fact, 

I think one of the main solutions is to keep liabilities inside the 

plans as long as we can, give trustees the ability to extend the solvency of those plans as long as possible, and thereby avoid, as long 

as possible, any benefit cuts. 

Chairman TIBERI. Thank you. One final question before I turn 

it over to Mr. Larson. Mr. Hall, I am not an actuary; I don’t think 

anybody up here is, other than maybe Mr. Young. Can you explain 

to in English what you said, and what it means—— 

[Laughter.] 

Chairman TIBERI. And here is what I am getting at, because I 

think you made news. The bottom line, with respect to the new report that you are going to issue at the end of December, what does 

the new data show, in terms of life expectancy and longevity versus 

what Ms. Tully is going to have to deal with, or Mr. Henderson is 

going to have to deal with, with respect to their employees. 

Mr. HALL. Sure. 

Chairman TIBERI. Living longer, I think, is what you said. 

Mr. HALL. Yes, thank you, Chairman. We will try to do that. 

The RP 2014 tables, especially compared to The RP 2000 tables, 

the comparison, just to give you a flavor of some of the increasing 

life expectancies—I don’t think it is brand new news that people 

are living longer, but a life expectancy, for example, for a male who 

reaches age 65, a retirement age, would be around 82.1 under the 

old tables. Under the new tables, it increases to 84-and-a-half, so 

about 2 to 2-and-a-half years of extension. The same for females, 

where we move from 84.6 years for those who reach age 65, extending out to about 86-and-a-half for females. That is a table comparison without any improvement, but those are the types of increases 

in longevity that we are seeing, as we move from one table to the 

next. 

Chairman TIBERI. So if you were working for a company and 

you are in charge of pension plans, this is a big deal. Defined benefit plans. 

Mr. HALL. Yes, the—you know, we will leave it to the employers 

to make those decisions, but longevity is certainly a risk that employers face. 

Chairman TIBERI. Thank you, Mr. Hall. Speaking of longevity, 

I turn to Mr. Larson from Connecticut. 

[Laughter.] 

Chairman TIBERI. He has been here a long time. 

Mr. LARSON. I thought he was going to say age before beauty. 

But I thank my—— 


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Chairman TIBERI. You are recognized for six minutes because 

you have such a great—— 

Mr. LARSON. Well, I think The beauteous chairman for his comments, and also I want to thank him and Ranking Member Neal 

for both their legislation, and putting this panel together, and this 

compelling testimony as well. 

It is clear, when it comes to multi-employer pension plans, that 

we are facing a dire and critical situation. I am also reminded, 

though, of the great wizard of Westwood—I think the actuary will 

know who that is—John Wooden, who said, ‘‘You must be quick, 

but don’t hurry.’’ 

And so, we hear an awful lot of alarm from a number of constituents who would be impacted by a decision that needs to be quick, 

but that shouldn’t be hurried. And I think, as Mr. Tiberi pointed 

out, not all of the stakeholders are completely on board yet, but 

that is what the—this process should be about, so that we can get 

to the point where we address this in a timely fashion. 

The fundamental principle that we must all keep in mind is that 

these benefits that were earned by workers, and are counting on 

for their retirement security, is center and front. To me, this 

speaks to a broader conversation that we need to have about retirement security for all Americans. 

While I support defined benefit plans, as Ms. Oakley points out, 

there has been precipitous decline in the number of workers that 

have access to them. Even more concern is that, while many Americans now have access now to defined contribution plans, there are 

still millions that do not, or have chosen not to participate. 

Among those who do not choose to participate, they are not saving enough, as 72 percent of Americans participating in 401(k) 

plans are not on track to reach their retirement income goal by age 

65. That is why I further agree with Ms. Oakley that what we need 

to do is strengthen Social Security. And I am going to ask you to 

address that, because I know you didn’t quite get to in your statement, what I read in your document, ‘‘To improve access to lowcost, high-quality retirement plans and improve the incentives for 

savings.’’ 

So, Ms. Oakley, I would like to focus specifically on the aspect 

of Social Security in terms of the overall retirement security of 

Americans. Given all of the evidence that retirement security of 

millions of Americans is increasingly in jeopardy due to the decline 

of defined benefit plans and the low rate of saving and defined contributions, wouldn’t cuts to Social Security that have been proposed 

through measures like chained CPI be particularly devastating. 

And, as a follow-up, what do you think we can do to help 

strengthen Social Security benefits. And aren’t there ways to make 

modest changes to make certain that the program is solvent longterm to bolster the obvious need that we hear before us today. Ms. 

Oakley. 

Ms. OAKLEY. Thank you, Mr. Larson, for that challenge. 

First of all, I think you are absolutely right. Social Security is 

the main source of retirement income. And as we look at the recent 

data just released by the Federal Reserve on the survey of consumer finances, and if you look at all working households, not just 

those households that have saved, when we look at people who are 


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10 years away from retirement, the median savings, that typical 

American, that woman in—outside of Dayton, that household today 

has just about $14,000 saved for retirement. And that is somebody 

who is between 55 and 64. If we look at all Americans between 65 

and 25, it turns out that we actually lost ground from even just 3 

years ago. The median savings is $2,500 in retirement accounts, be 

it an IRA, a 401(3)(b), 401(k) plan. 

So we know—and we also know, at the same time, that there is 

scheduled cuts already to come in Social Security. So, you are absolutely right, the people can’t afford any more cuts. And I think, as 

we look at what can be done, you know, Social Security, as Mr. 

Gold said, you have got a choice of benefit cuts or finding a way 

to prefund some of those benefits with increases in the contributions. 

In survey, many surveys that have been done, including ones by 

my organization, there is strong public support for Social Security, 

because I think Americans know it is going to be a key part of their 

retirement, and they are willing to take a little bit more of a cost, 

either by having the cap raised, or by requiring greater contributions. And the sooner that is done, the quicker it happens. 

And, with regard to just broader savings, your state, for example, 

in Connecticut recently adopted legislation asking the state to look 

at is there a way that they can provide those employees in Connecticut who currently don’t have savings something that is low 

cost, and will actually get them through retirement. 

So, I think there is a lot of new things going on that need some 

help out there, too. 

Mr. LARSON. Well, I thank you. I know our time is up. And because of the longevity comment, I was given just—— 

Chairman TIBERI. I gave you an extra minute. 

Mr. LARSON. Just 30 seconds. Just 30 seconds—— 

Chairman TIBERI. I will give you 30 seconds—— 

Mr. LARSON. By way of—— 

Chairman TIBERI. You are such a good sport. 

Mr. LARSON. By way of anecdote, and—which I again commend 

you and Mr. Neal for—these things are personal. And when you 

talk to people in a wealthy state, like Connecticut, and you find 

that women are subsisting on a total of $9,000 a year from Social 

Security only, you begin to deeply appreciate what they are up 

against, and why all these measures are interconnected, necessary, 

and we have to be quick. But we can’t hurry. 

Chairman TIBERI. Thank you, Mr. Larson. That would be something like, I would think, Philosopher Pascrell would say. So—— 

Mr. LARSON. He is the poet Laureate of—— 

[Laughter.] 

Chairman TIBERI. Thank you so much. A leader in retirement 

issues, Mr. Paulsen from Minnesota. 

Mr. PAULSEN. Thank you, Mr. Chairman. You know, the irony 

is that I just learned my brother, who is an actuary, is actually in 

Connecticut, as we speak, at an industry roundtable, going through 

these same exact discussions, which is kind of interesting. 

But, Mr. Hall, I just want to dive into a question here a little 

bit—greater detail, what you just touched on, this longevity issue 

with mortality rates and the tables you deal with, because, you 


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know, the reality is that the longer beneficiaries are expected to 

live, the larger the plan’s future obligations are. 

So, if mortality is improving, you know, two-and-a-half years, 

and some of those numbers you mentioned, the plan-sponsored pension liabilities are going to be increasing significantly. So do you 

expect plan sponsors, then, to consider a variety of changes to 

avoid the substantial cash contributions, irrespective of interest 

rates and rates of return, that will be required with this improvement in mortality? 

And, if so, what are some of the changes that plan sponsors 

would consider making to avoid that potentially significant increase? Because that kind of gets to the crux of the matter. 

Mr. HALL. Yes, the Society of Actuaries wouldn’t have any specific guidance for plan sponsors. I think that we would encourage 

actuaries working with those plans to take the data that we have 

done through our mortality studies, combine it with specific plan 

information, and then work and encourage plan sponsors to come 

up with decisions that are best for their particular plan. 

Mr. PAULSEN. And maybe, Ms. Tully, you can kind of—but, you 

know, math, this is just numbers, this is arithmetic. I mean what 

are some of the options that you might have to look at, as an employer taking care of your employees, or Mr. Henderson, just to follow up on that. 

Ms. TULLY. Well, generally, I think that each company has to 

evaluate their specific circumstances from a plan design, demographic, and financial standpoint. And they do that on a continual 

basis, as do we. I am aware of the mortality studies that are out 

by the Society of Actuaries and, you know, there is no doubt that 

people are indeed living longer, as they indicated. But at this point 

we don’t have any current plans to change our plans at this time. 

Mr. PAULSEN. Okay. Mr. Henderson. 

Mr. HENDERSON. Thank you, yes. The question about increasing contributions, obviously, Kroger is committed to making the 

contributions that we need to make. In fact, we contribute over 

$250 million a year to multi-employer plans. In effect, that is 10 

percent of our pre-tax earnings. So contributions is not really the 

issue, it is the demographics inside these plans that are causing 

the problems. 

In fact, as much of the testimony here illustrates, for every dollar 

we contribute to multi-employer plan, a great percentage of that 

goes to fund orphan liabilities. So, justifying making voluntary contributions to plans is just very difficult for employers to do. And 

smaller employers, particularly, simply can’t do it. 

Mr. PAULSEN. Good, all right. Thank you, Mr. Chairman. I 

yield back. 

Chairman TIBERI. Thank you, Mr. Paulsen. Mr. Marchant is 

recognized for 5 minutes. 

Mr. MARCHANT. Thanks for your testimony today. Following up 

on what you stated—this is for Mr. Henderson—can you speak 

more on the process of the National Coordinating Committee for 

Multi-Employer Plans, and what process they went through in defining their plan. And, in your opinion, did these recommendations 

from The NCCMP adequate address the issue if imminent insolvency? 


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Mr. HENDERSON. I wasn’t a member of the committee, I wish 

I had been. 

The NCCMP was a broad collection of participants and employer 

sponsors and unions and actuaries. And, Mr. Chairman, I am not 

an actuary, either. I am surrounded by them today, I have great 

respect for them. And, quite frankly, we won’t solve these problems 

without their help. But the coalition that created the proposal is a 

broadly diversified group that includes both union and employer 

sponsors. In fact, we have written at least two letters jointly with 

the president of the United Food and Commercial Workers Union 

in support of those proposals. 

So, I think what it illustrates is that all the participants in these 

plans recognize how severe these problems are, and are proposing 

solutions that will help us. 

Mr. MARCHANT. Can you speak to the importance and effects 

of the reform and inaction, and what kind of effect it would have 

on Kroger’s business model, especially on job creation and company 

growth. 

And then I would like for you to speak a little further on the orphan issue that you mentioned. 

Mr. HENDERSON. Well, I will take the orphan question first, 

actually. It is—in many of the plans in which I am familiar, the 

total liability of these plans, up to a third or even 40 percent of 

that total liability has been created by the exit of previous employers. Some were—due to bankruptcy, were unable to pay any of 

their withdrawal liability. 

Some withdrew for other reasons, and either—because the rules 

may or may not require them to pay all of the liability that they 

owe, that leaves orphan liability—in fact, several years ago we did 

something extremely unique. We—working with The UFCW, we 

combined four multi-employer plans into one multi-employer plan 

and achieved—there are a number of benefits associated with plan 

consolidation, which is a number of the proposals in the—to support plan consolidations and the benefits that you can enjoy. 

But when we consolidated the liabilities of those four plans, the 

combined liability of those plans was $3.5 billion, and approximately 1 billion of it came from orphan liabilities. That is liabilities 

for people who didn’t even work for Kroger, much less work in the 

industry, itself. Now, again, we were able to—for the benefits we 

achieved, and working with UFCW, we were able to consolidate the 

plans and fully fund that plan today. So I clearly would support the 

proposals in The NCCMP proposal that support consolidating 

multi-employer plans. 

Mr. MARCHANT. Thank you, Mr. Chairman. 

Chairman TIBERI. Ms. Schwartz is recognized for 5 minutes. 

Ms. SCHWARTZ. Thank you. I was nervous about the introduction, so thank you for being quite straight-forward about it, and no 

adjectives. 

So, appreciate the panel and the hearing today. Certainly is a serious issue before us. And I do think we need to put this in both 

the context of how difficult it is right now, given the potential insolvency, and—as well as the demographic shifts, and some of the 

rules for the multi-employer plans to work, and to be able to conVerDate Sep 11 2014 01:53 Jul 06, 2016 Jkt 094394 PO 00000 Frm 00061 Fmt 6633 Sfmt 6602 I:\WAYS\OUT\94394.XXX 94394

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tinue a defined benefit program for their employees. Obviously, 

that is what we are talking about. 

I think it was very helpful to have Ms. Oakley in front of all of 

us to realize how important this is to real Americans out there, 

who have planned very carefully, some of them, for exactly what 

they expect to get from their own personal savings, from employer 

benefits, how many of them define benefits, and from Social Security. And any one of those three getting messed up has huge implications for those families. 

I met a woman in my district who said she had figured very carefully about how to do this, but had not calculated that she would 

have to pay for cable, because nothing existed when she was planning it 20 years, to worry about that, or a cell phone or even a computer. And those were real costs that she had not counted on. So 

we haven’t even discussed the fact that there are real—the realities 

for people out there, as well as the fact that we have just come 

through a very difficult recession. And the undermining of 401(k) 

plans has created tremendous uncertainty for Americans who have 

saved responsibly. 

Now, we all have a responsibility to help young people figure out 

how to save, and we have—there are suggestions, obviously, legislatively, about how we can encourage that. 

I don’t think we want to change the demographic issues that— 

pointing out we don’t—we are not likely—nor do we want to say 

that you should not live as long as you do, so we just have to accept 

the realities of that. 

So, I think what—my question for all of you—and I particularly 

appreciate some of the reality check Mr. Henderson has been providing. I have been to Kroger. If you shop at all in the southeastern 

part of the United States it is hard to miss, so I have been to your 

stores. And thank you for the level of responsibility you have taken 

in providing these defined benefit plans. 

So, just a couple questions, if I may, and I will start with Mr. 

Henderson, is you have referred to some actions we might take. 

But, given there is legislative proposals on the non-discrimination 

piece that Ms. Tully talked about, what else could Congress be 

doing to encourage potential responsible employers to take more responsibility in moving to prevent insolvency and, particularly in 

multi-employer plans, how do you make sure that the responsible 

employers are not left holding all the responsibility, which is happening. It is one question. 

And, two, given that you seem to be committed to, thankfully, a 

defined benefits plan, and all of the comments have been that we 

are moving away from that, what else could we be doing legislatively to encourage defined benefit plans, given that there is almost 

an assumption that they are going to go away, when, in fact, so 

many Americans are going to rely on that. 

So, those two questions, if I may. 

Mr. HENDERSON. All right, thank you for the question. We will 

soon have almost 400,000 employees in the company, and we sponsor DB plans, both internal to the company—a single employer 

plan—and the 36 multi-employer plans that we are in. My company sponsors a defined contribution plan, a 401(k) plan that has 


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over $7 billion of employee and money matching contributions invested in it. 

I guess over—my experience tells me that, especially in DC 

plans, communication is critical with the participants. You—in a 

nutshell, you have to start early, you have to save, and you have 

to be diligent about that over your lifetime. And then, as your risk 

profile changes as you age, you need to be aware of that, and make 

the appropriate changes. 

So—but back to your first question about the other actions that 

we can take. Again, back to the NCCMP proposal, and other comments that have been made by folks at the PBGC themselves, we 

need—we could certainly use help in promoting plan consolidations. We could certainly use help in incentivizing plans, both single employer and multi-employer, to overfund those plans, if they 

can. 

When conditions are good and returns are good, if we could 

overfund those plans—in effect, save for a rainy day—the system 

as it is today really does not incentivize you. In fact, there is a disincentive to fund the plan to 100 percent. And I think, if we change 

the rules and incentivize plans to overfund their plans when they 

are good—and, again, I—you know, Mr. Gold’s testimony is the situation is bleak on multi-employer plans, as I testified. And, if you 

listen to Mr. Gold, it is actually even worse. 

So, I do think anything we can do to promote changes in the system, to consolidate plans, incentivize contributions to plans, keep 

the liabilities inside the plans, because, frankly, based on the expert’s testimony, the PBGC will not be there to support those benefits. 

Ms. SCHWARTZ. It is a very fair warning, given that we have 

had our own actions, and ones that many of us have questions 

about, the whole issue of smoothing—these are not particularly 

good ideas when we are looking at what happens in 10, 20 years. 

When we can, we should be making those investments. So thank 

you for your comments. 

Chairman TIBERI. Thank you, Ms. Schwartz. Mr. Schock is recognized for 5 minutes. 

Mr. SCHOCK. Thank you, Mr. Chairman. Thank you, first, Mr. 

Chairman, for holding this hearing. I think it is a very important 

topic, and I know you and I have worked together on some of your 

past legislative proposals, some more welcome and controversial 

than others. 

First I would like to ask Mr. Henderson. Obviously, we are aware 

that there is a problem here. To put you up here on the dais, I 

would suggest to you that for us to be able to do much of what you 

are proposing and others requires not only the political will of 

Members of Congress, but also the desire of our constituents. And, 

as a frequent shopper of Kroger myself, I will tell you that I have 

not had a bagger or a cashier or someone in the bakery department 

talk to me about this issue. 

So, my challenge to you would be what is your organization doing 

to inform, educate, and motivate the thousands of employees that 

you have that are voting constituents of our districts to, first, make 

them aware that there is a problem with their pension, and, secVerDate Sep 11 2014 01:53 Jul 06, 2016 Jkt 094394 PO 00000 Frm 00063 Fmt 6633 Sfmt 6602 I:\WAYS\OUT\94394.XXX 94394

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ond, to motivate them that if, in fact, nothing is done, as suggested, 

in a decade, it goes belly up, and their benefits are in question. 

Because that is really, I think—you know, there is different levers that we can tweak, you have done a great job in outlining 

them. But help assure me that you are going to go back here today, 

not only leaving us with a list of things to do, but also a willingness and a desire to go back and help fire up the troops and educate the very constituents that we are all here today talking about 

trying to help. 

Mr. HENDERSON. Thank you, Congressman, and I am, frankly, 

glad to say that the majority of Kroger’s—the plans in which we 

participate, in fact, are what I would describe as certainly better 

funded, if not well funded. 

In fact, if you look at our annual report, the disclosures which 

are now required by the accounting profession require us to disclose certain pieces of information about the significant plans in 

which we participate. In our annual report there are approximately 

12 large plans in which we participate. Seven of those plans are 

described by the PPA as being ‘‘red zone’’ plans, and they have 

qualified rehabilitation plans in place. And for all but two of those 

plans, the funded status of that plan, the way we measure it today, 

is over 80 percent and improving. 

My point is that the provisions of the Pension Protection Act— 

speaking, again, as an employer trustee who has had to make these 

kinds of decisions—the provisions of the Pension Protection Act are 

working and have improved the funded status of multi-employer 

plans, certainly within the group that Kroger participates in. 

The example that I have to go back to, however, is Central 

States. Based on all of the projections, the demographics just simply overwhelm the finance in that condition. 

Mr. SCHOCK. Do the Central States employees understand their 

plan is underfunded—— 

Mr. HENDERSON. You know, I am not sure that they do, because the communication—it gets confusing. It is a highly complicated subject. 

Quite frankly, you know, we are kicking around numbers here, 

billions of this and billions of that, as if it is more or less Monopoly 

money. I try to put a more human face on this. There is someone 

my age who has been driving, you know, a truck for Kroger for decades safely and on time. And he is probably getting ready to retire, 

and he is looking at a retirement benefit out of the Central States 

plan of maybe—well, the average—and with respect to the actuaries on the panel—— 

Mr. SCHOCK. I am sorry, I am running out of time. 

Mr. HENDERSON. Okay. 

Mr. SCHOCK. The point is they need to know that it is underfunded. They need to know there is a problem. And we don’t need 

to talk to them out in billions, we need to talk to them about their 

several thousand dollars a month they are thinking they are going 

to get isn’t going to be there, because it makes it easier for us to 

then help you—— 

Mr. HENDERSON. But the rules—— 

Mr. SCHOCK [continuing]. Accomplish what we are trying to do. 


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Mr. HENDERSON. Yes, sir. With the rules in place today, their 

benefit—— 

Mr. SCHOCK. The other question I want to ask you, Mr. Henderson, and also Mr. Gold, perhaps, is these red zone plans that 

have been identified as basically—their liability being so great that 

if we actually made them pay in what they needed to pay into the 

multi-employer pension plans, they would fold, we say, ‘‘Well, gee, 

for the sake of keeping you in, we won’t charge you.’’ But, in fact, 

that only makes the problem worse. 

So, I guess, as a member of the multi-employer pension plan, Mr. 

Gold, who studies this, I am just curious, what are we to do—— 

Mr. HENDERSON. You want to go first—— 

Mr. SCHOCK. Are we doing the right thing, allowing for red 

zone plans to basically get a freebie for the time being, but yet not 

fixing the unfunded liability that their employees have created? Or 

is there some other path that we should be looking at to help keep 

them in the multi-employer pension plan, but also not exacerbate 

the unfunded liability—— 

Mr. GOLD. Well, I don’t have any magic to offer. It is—the one 

way to describe the way we are treating them today, it is palliative 

care. And that may be as much as we can do for those really, really 

troubled plans, which I think is the subject of your question. Much 

of my focus is on the healthier plans, and how to keep them 

healthy over an extended period—for generations, perhaps—and 

that is why I focus on the understatement. 

I agree with Mr. Henderson that the—for these terribly troubled 

plans, the demographics overweigh the financial issues. And it is 

the financial issues for the healthier plans which also trouble me. 

Mr. HENDERSON. Okay. And, first, I am reminded that, based 

on the funded status of the Central States plan, we—the plan is 

required on an annual basis to send a funding notice, if you will, 

to all participants of the plan about the condition of the plan. And 

so all of the members of the Central States plan—participants 

should have received a letter describing the status of that plan to 

them. 

Mr. SCHOCK. Great. Thank you both, I appreciate it. 

Chairman TIBERI. Thank you. The gentleman from Indiana, Mr. 

Young, is recognized. 

Mr. YOUNG. Thank you, Mr. Chairman. I thank all our panelists here today. I just would like to begin by first acknowledging 

the concerted and affirmative efforts of Kroger—and I know 

Raytheon, because I visited your facilities—to hire veterans. I think 

that is very important during this period of time. 

I am really pleased that the chairman has convened this hearing 

to discuss the integrity of private defined pension benefit plans. 

There is no doubt, based on some of the grim assessment that we 

have heard here today, that—and especially as it pertains to retirement savings more generally—that we need to act, and act boldly 

here in Congress. 

I know there is one affirmative step that this Committee can 

take that will help improve that situation for hundreds of thousands of American workers. And this is a bit of a departure from 

what we have been talking about, but it bears mentioning, I think. 

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yond, to support and protect from adverse DOL regulations ESOPs. 

This business formation results in employee-owner saving for a secure retirement by owning a piece of where they work. 

Ms. Tully, back to the primary focus of this hearing—I appreciate 

your testimony today—and specifically your focus on non-discrimination rules, there is obviously a well-intentioned rationale behind 

the existence of these rules, and so forth. But our workforce has 

changed and will continue to change, and we clearly need to step 

back and analyze those rules anew. 

With that in mind, I applaud Chairman Tiberi and Ranking 

Member Neal for their work together on this issue, and I hope the 

full committee at some point can fully consider H.R. 5381. We have 

to get this right, bottom line, for the benefit of both the companies 

and the beneficiary. 

Ms. Tully, during your testimony you spoke to some length about 

the impact the non-discrimination rules have on employers, and 

also that the IRS granted certain non-discrimination relief through 

2015. With that in mind, can you discuss a bit about how Raytheon 

currently operates their benefit plan in order to comply with the 

non-discrimination rule structure, and how that would change after 

the IRS relief expires—— 

Ms. TULLY. Sure, thank you. So our plans currently pass all of 

the testing requirements under the non-discrimination rules, and 

we do not actually need to utilize the testing relief at this point 

that the Treasury has offered. And if we were to run into testing 

issues, we would evaluate our situation then, and determine what 

our next steps would be with respect to our plan. 

Mr. YOUNG. Mr. Henderson—you have thoughts on that question—— 

Mr. HENDERSON. Well, at Kroger, on the single-level employer 

plan we face the same issue with respect to the non-discrimination 

testing, and we support what the young lady from Raytheon is proposing, as well. 

Mr. YOUNG. Thank you. Ms. Tully, in reference to other proposals that might help mitigate or, ideally, eliminate this current 

problem, what if we changed the definition of highly compensated 

employees—or are there other solutions that might work outside 

those proposed by my good colleagues Messrs. Tiberi and Neal—— 

Ms. TULLY. Yes. So one potential short-term option could be to 

change the definition, as you mentioned, of highly-compensated employees, or make some other fixes, I would say, around the edges 

of these rules. But any change such as that would be a temporary 

solution, and wouldn’t actually fix the long-term problem. 

And also, because of the nature of these complex actuarial ratio 

tests that are used in the rules, there is actually a chance that 

changing some of these provisions, such as the definition of ‘‘highly 

compensated employees’’ could cause some employees—employers 

to actually fail the test with such a change. 

In terms of other possible solutions, there could be other possible 

solutions. I believe our perspective is that those solutions need to 

be focused on the long-term fix for employers, versus the shortterm sort of Band-Aid solutions to this issue. And you know, one 

possible additional long-term fix may be to simply apply a general 

grandfathering rule that would allow for employers who had passed 


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all of these testing provisions at the time that they were open, or 

at the point at which they were closed, to continue to be considered 

passing in the future. So that is just another possible solution. 

Mr. YOUNG. Thank you for sharing your perspective. I yield 

back. Thank you. 

Chairman TIBERI. Thank you. Mr. Kelly, welcome to the subcommittee. You are recognized for 5 minutes. 

Mr. KELLY. Thank you, Chairman, and I appreciate it, and 

thank you all for showing up. 

My concern, because I come from the private sector, is the private sector. And when you look at ERISA, their concerns are only 

with private-sector pension plans. Is that correct? So if there is the 

public sector—so if you were to say, well, the Federal, the state and 

local governments, churches, none of those are covered by this— 

and one of the problems—is that a wrong statement, Mr. Gold—— 

Mr. GOLD. The central provisions of ERISA apply almost exclusively to the private sector, as you say. 

Mr. KELLY. Okay. 

Mr. GOLD. There are some church plan rules and some other 

things. That is why you saw the look on my face. 

Mr. KELLY. No, that is okay, because I am really concerned 

about this, because it seems to me it is kind of a two-sided coin, 

or a one-sided coin. 

Let me just ask you this, because I have a great deal of—number 

of small employers in my district. I am going to read this to you, 

because I think it is important to get this point across. I have a 

company, Channellock, who—they make very high-precision tools, 

tools that almost every tech in the world uses. They have been in 

business since 1886. Mr. Diamond questions me about this all the 

time. Let me ask you this. 

Private sponsor of traditional pension plans must fund their 

plans using an average, high-quality corporate bond rate, as modified as MAP–21, and they must also pay PBGC premiums to cover 

other employers who defaulted on their plans. These rules have 

caused almost every private employer to discontinue providing pension benefits. 

In addition, the expense of these plans has increased dramatically. Low interest rate environment and high PBGC premiums, so 

job creation of our best employers has been hampered in recent 

years now. 

There is little incentive for an employer to overfund their plans, 

due to significant excise tax on the return of excess funds in the 

plan when a plan is terminated. And, in addition to paying taxes 

on the reversion of excess funds, which is reasonable, there is a 20 

percent excise tax, at best, and it could be as high as 50 percent. 

For example, Channellock’s pension plan. By government standards, which generally uses a long-term rate expected on trust fund 

assets of 71⁄2 percent, is 100 percent funded. However, by private 

industry standards, they are significantly underfunded. Annual 

funding requirements are about $1 million per year. PBGC premiums are currently around 200,000, and are scheduled to increase 

to around $450,000 in the next two years. 

Now, these are some solutions that they are offering. Eliminate 

the excise tax and reversions of plan assets from pension plans. 


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Without concerns of high penalties from overfunding, employers 

will be more likely to prefund their plans, knowing that they can 

recover the excess in the future without huge penalties, or change 

the funding requirements of The PBGC premiums to be computed 

using a long—using a reasonable long-term rate of return expected 

on a trust fund. So, for example, it would be seven percent. 

The reason I bring it up—Every one of these things that we just 

talked about is a cost of doing business for them, and it adds to 

their burden of doing what it is that they do. And it just doesn’t 

make sense to me that we put so much weight on the private sector 

and yet, on the public sector, if they are underfunded, the responsibility falls back on the taxpayers to make them whole. 

Yet, in the private sector, we put this burden on them, the exact 

people we need to lift us out of this malaise that we are in right 

now. We are making it harder for them to do business, and we penalize them for salting away money in the good years so they can 

cover the bad years. And it doesn’t make sense to me. And I have 

people ask me all the time, they say, ‘‘Well, I don’t understand how 

some companies, who made huge profits last year, are paying no 

taxes, and yet I am paying taxes every year.’’ And I said, ‘‘It is very 

simple; it is part of our Tax Code. You have carry-forward losses.’’ 

Do you have an opinion on any of these things, The PBGC specifically—Are those premiums excessive, and are those putting 

such a burden on our private-sector people that they are deciding 

to walk away from what they thought was an excellent benefit for 

the people that work with them—— 

This is a company that was founded in 1886, they are strong employers, they are strong members of the community, and yet those 

are the people that we always put the heaviest burden on. And I 

got to tell you, at some point, it is the old story, ‘‘Don’t worry about 

the mule, just load the wagon.’’ I think the mule is ready to 

unhitch himself and walk away from this burden. 

Yes, you can—please, you said something and I thought it was 

great: Good policies cannot be based on bad numbers. And I think, 

if you start with bad numbers, you are going to end up with bad 

policy. 

Mr. GOLD. Well, I may not give you that much satisfaction, because—— 

Mr. KELLY. I am not looking for satisfaction, I am looking for 

fairness. 

Mr. GOLD. First, I am not a fan of those excise taxes. They 

began with Senator Metzenbaum in the eighties, and they were 

solving a problem we no longer have today. 

But the cost of defined benefit pension plans, particularly in a 

low-interest-rate environment, is higher, by far, than it was in the 

1980s or at any time when interest rates were higher. That is just 

the laws of finance. 

But I am always troubled by the thought that we are in some 

way, by demanding contributions to pension plans, either injuring 

the economy or injuring job prospects, and here is the reason. That 

money does not go down a rat hole. The money contributed goes 

right into the capital markets, where it then becomes available for 

new investments. And the secret of the capital markets is they try 

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looking prospects. And that means that, while individual companies may be strapped for pension costs, and perhaps considering 

lightening their workforce, the economy, as a whole, is actually 

stimulated by the collection of pension contributions, which are tax 

deductible, which lowers taxes and, therefore, is also stimulative. 

So, I do not find—I understand for individual companies that 

pension contributions can be burdensome, but in the aggregate I 

don’t find that to be true. 

Mr. KELLY. Well, I agree, in the aggregate, I understand. And 

a lot of the projects we see are being funded now by pension funds. 

I talked to people who do those projects, and they really go to the 

pensions to find that money to be invested. But if you are 

Channellock, and you are facing this, it drives the cost of your finished product—I think there is a disconnection between the private 

sector and the public sector. They believe—‘‘they,’’ believe the public sector—that it doesn’t matter what your costs are, just add it 

on to the purchase price. I got to tell you, when people have a 

choice, price point is very important. 

So, if it costs you more to make a product and to put it on the 

shelf, and you have to charge more for it, there is—chances are you 

won’t sell as many. If you don’t sell as many, you don’t need to 

make as many. If you don’t need to make as many, you don’t need 

to employ as many. I think we put a heck of a burden on the private sector and walked away from it. Because, in the public sector, 

the taxpayers will eventually make up the difference between what 

is underfunded and not, and it just doesn’t work that way. 

Mr. Hall, I appreciate your talk when you talk about mortality. 

I mean the longer we live, the greater access we have to these 

funds, and it does create a problem down the road. I want to live 

as long as I can. But, by the same token, I know that at some point 

we run out of the ability to fund all those things. 

So, thank you all for being here. But it is a great concern, especially in the private sector. And it, to me, comes down to sustainability. Can we sustain these programs—And often times our 

hearts are willing, but our wallets are weak, and I think we are 

running out of time on this. 

Thank you, Mr. Chairman. 

Chairman TIBERI. Great way to close. Thank you, Mr. Kelly. 

Great hearing, great testimony, great questions. 

This concludes today’s hearing. Please be advised that Members 

may submit written questions to the witnesses. Those questions 

and the witnesses’ answers will be made part of the record. I would 

like to thank all of you for appearing today, for your time. It has 

been super educational, and it also demonstrates, again, the challenges that both single-employer and multi-employer plans and 

pension plans face. 

That is it for today. This hearing is adjourned. 

[Whereupon, at 11:40 a.m., the subcommittee was adjourned.] 

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f 


ralbany on LAP520R082 with HEARINGSInsert offset folio 729 here 94394.060
88 

National Center for Policy Analysis.2 

f 


ralbany on LAP520R082 with HEARINGSInsert offset folio 725 here 94394.056
89 

National Education Association 


ralbany on LAP520R082 with HEARINGSInsert offset folio 730 here 94394.061
90 

f 


ralbany on LAP520R082 with HEARINGSInsert offset folio 731 here 94394.062
91 

The ERISA Industry Committee 


ralbany on LAP520R082 with HEARINGSInsert offset folio 732 here 94394.063
92 


ralbany on LAP520R082 with HEARINGSInsert offset folio 733 here 94394.064
93 


ralbany on LAP520R082 with HEARINGSInsert offset folio 734 here 94394.065
94 


ralbany on LAP520R082 with HEARINGSInsert offset folio 735 here 94394.066
95 


ralbany on LAP520R082 with HEARINGSInsert offset folio 736 here 94394.067
96 


ralbany on LAP520R082 with HEARINGSInsert offset folio 737 here 94394.068
97 


ralbany on LAP520R082 with HEARINGSInsert offset folio 738 here 94394.069
98 

f 


ralbany on LAP520R082 with HEARINGSInsert offset folio 739 here 94394.070
99 

United Brotherhood of Carpenters and Joiners 


ralbany on LAP520R082 with HEARINGSInsert offset folio 740 here 94394.071
100 

f 


ralbany on LAP520R082 with HEARINGSInsert offset folio 741 here 94394.072
101 

U.S. Chamber of Commerce 


ralbany on LAP520R082 with HEARINGSInsert offset folio 742 here 94394.073
102 


ralbany on LAP520R082 with HEARINGSInsert offset folio 743 here 94394.074
103 


ralbany on LAP520R082 with HEARINGSInsert offset folio 744 here 94394.075
104 


ralbany on LAP520R082 with HEARINGSInsert offset folio 745 here 94394.076
105 


ralbany on LAP520R082 with HEARINGSInsert offset folio 746 here 94394.077
106 


ralbany on LAP520R082 with HEARINGSInsert offset folio 747 here 94394.078
107 

Æ 


ralbany on LAP520R082 with HEARINGSInsert offset folio 748 here 94394.079