By Don McIntosh
The U.S. Labor Department on July 9 unveiled its rules for a new $94 billion program to rescue failing union pension plans. The program was one small part of the American Rescue Plan Act which passed in March, and it’s expected to help more than 3 million union members and their spouses.
“Every working person deserves to retire with dignity and receive all the benefits they earned during their career,” said U.S. Secretary of Labor Marty Walsh in a press statement as the rules were announced. “Unions … have been fighting for years for what these workers have earned.”
The rescue is Congress’ biggest-yet response to a crisis afflicting about one in seven multi-employer pension plans. Multi-employer plans are collectively bargained plans that include at least two employers and are jointly overseen by employer and union trustees. They’re most common in industries like construction, trucking and janitorial that have lots of small union employers. In all, there are about 10.9 million union workers and retirees enrolled in about 1,400 multi-employer pension plans. The plans are heavily regulated, and most of the time they’re able to provide workers a secure retirement at a fairly affordable rate for employers. But in the last two decades, the plans’ investments have lost value in financial crashes. Most of the 1,400 plans have been able to recover, but 100 to 200 plans, especially in industries where the union workforce is aging and declining in number, have been unable to make up the losses.
All told, the Pension Benefit Guaranty Corporation (PBGC) estimates over 200 pension plans will be eligible for the assistance, including over 100 plans that would otherwise have become insolvent during the next 15 years. PBGC is the government agency that insures pension plans. Without the rescue, PBGC itself was headed for insolvency by 2026.
As laid out in the newly announced program rules, the plans with the most immediate need will be the first to receive rescue funds. Applications are now open for 25 pension plans that are already insolvent or that were projected to become insolvent by next March.
Next in line will be 18 pension plans that were given permission to cut their pension benefits under the 2014 Multiemployer Pension Reform Act (MPRA). Those include two pensions for workers in the Portland area—Plasterers Local #82 Pension Plan, and Western States Office & Professional Employees Pension Fund. Those plans will be allowed to apply for assistance starting Jan. 1, 2022, or sooner if PBGC processes the first group quickly enough. Importantly, those pension plans can restore full benefits immediately for current retirees, and don’t have to wait until the rescue funds arrive. Once the aid arrives, they’ll also be able to pay back retirees for any benefits they lost thanks to the cuts.
“All of us trustees are ecstatic about it,” said Kent Sickles, business manager of Plasterers Local 82.
After those two groups, PBGC will give priority to the giant Central States Teamsters Pension and to the 25 multiemployer pensions that are projected to become insolvent in the next five years. The final group will be all other multi-employer pension plans that are forecast to run out of money by 2051.
Once plans apply for the aid, PBGC will process their application within 120 days, and issue payment within 60 days after that. The rescues will come in the form of a single lump sum payment. The payment amount will be calculated to be enough that, together with the plans’ existing assets, they’ll be able to pay all pension benefits that are due through 2051. There’s no requirement that the plans repay the aid. Pension plans will have to keep the government rescue funds separate from their other assets, and can only place them in low-risk investment-grade bonds.
The money does come with some conditions. Pension plans that get the assistance won’t be allowed to retroactively increase previously earned pension benefits, and they can only increase future benefits if those are funded with new contributions.
One group that won’t get relief under the rules is contributing employers. When they got into trouble, many underfunded plans imposed significant surcharges on participating employers that were intended to make up for the investment losses. PBGC’s rescue plan rules say that employers can’t reduce the amount of contributions they’re currently making under their collective bargaining agreements.
PBGC has begun scheduling online informational sessions to explain the program to pension trustees and practitioners.
When will the WPA Teamsters return the 33% monthly payment that we lost and how about the back pay that was lost ,when will that be returned ?
Good question, the teamsters were real quick to cut our benefits and all we heard about for years now was the butch lewis act will restore our pensions,but they don’t seem to be in any hurry,probably waiting as long as they can hoping many of us will die off,we worked for our pensions and it should be returned to us now so we can live the way we planned before our money was stolen from us
will we be contacted when they find out?
If the Republicans take Congress back, can they repeal the bill? I’m thinking if Central States doesn’t receive the bale out funds next year and Congress changes hands, we may be back we started from.
What and when will local 317 Syracuse hear anything?
I am currently collecting my pension at 30% less due to the reduction. I was with New York State Teamsters local 375. Will i be eligible for this government assistance and will there be increase in my monthly pension amount or will this secure the pensions longevity. Please Advise
I am due for review of my current pension monthly check in March of 2022 for the Central state Pension will this effect me in anyway.
My pension is with Teamsters 294. It was cut by 30%. I am wondering if I will be able to collect my full pension when I retire in 1 year?
I was with the Glaziers Union and was collecting aoopx. 2200.00 per month Then Los Angeles, Denver, Las Vegas, and Phoenix pension was stolen by our investor and now I only receive 500.00 per month. I don’t know how I will make it with prices going up. Is there any help out there?
When will Local Union 617 Teamsters get their back pension payments? My Dad died after the Butch Lewis Emergency Pension Plan Relief Act of 2021 was passed. Can the back money that is owed to him go to his estate? My Mom passed away and I am in charge of my Dad’s estate. Please let me know!!! Thank You!!!
Please I can’t hold on much longer I had to sell my house and living on that money
I want to know when am getting back my full pension back.i live in New York
Local 294 doesn’t seem to be in any hurry to restore our pensions or the back money we lost, the biggest mistake I made was working at UPS and being forced to join the teamsters,,I never RECIEVED A COLA, WHILE OTHER PEOPLE IN THIER UNIONS DO,LIKE THE STATE,,FROM WHAT I READ WE WILL BE THE LAST GROUP TO HAVE PENSIONS RESTORED IF AT ALL,,WHAT ABOUT THE 33% THAT WE ARE OWED ,MANY OF US WILL PROBABLY PASS AWAY BEFORE THEY GET AROUND TO US,,,SHAME ON PUTTING OUR TRUST IN THE TEAMSTERS 5 YEARS OF PENSION CUTS
Biden is a lying sack of s.. This is not to rescue retirees. It is to allow our Unions and the morons who run our funds to continue to loot and mismanage these funds. Retirees being made whole after being robbed using the Multi Employer Reform act, written by OUR UNIONS to rob Union retirees, is a byproduct of this BS and not the reason it was created. If these Union crooks did not need to use the retirees they robbed as show ponies to get a taxpayer bailout retirees would not be getting shyte. So now the taxpayers are on the hook for Union pension funds for the next 30 years at the estimated cost of over $100 billion. Rah. Rah. Yet the Unions and fund scum bags who robbed workers walk away with a pocket full of cash and are being allowed to continue to loot and mismanage our funds.Rah Rah. Now we are seeing the Unions moving forward with their agenda to tank defined benefit funds and replace them with variable pension funds and BS composite plans. This means that brothers and sisters going forward are no longer guaranteed a pension no matter how much these rats take from their paychecks each week. With the new variable model as they CONTINUE to lose fund money and mismanage our funds they can cut pension checks at will and if they lose the fund workers get nothing. Not even the PBGC minimum. Rah.Rah…That is a big Bullspit!! I wonder of Butch Lewis is rolling in his grave to know his name was used to achieve this scam.