It is truly unbelievable that the Joint Select Committee failed to produce a viable piece of legislation to protect the pensions for millions of Americans in Multiemployer pension systems by their self-imposed deadline (November 30th). I know that they’ve announced that they will continue talking, but talk is cheap, and as they play their collective fiddle, many Americans are seeing their financial futures go up in flames.
You may recall that earlier this year we wrote a post titled, “Let’s Focus On Carol” (8/22/18). Her story had been shared with me to highlight the potential impact to retirees who found themselves in struggling (failing) pension plans. Under MPRA, many plans have been seeking benefit cuts and more than a handful have been granted “relief”. Well, it is certainly no relief to the pensioners who are seeing their futures darkened.
Carol has shared with me an update on her situation.
“Well, I just got the letter from the PBGC confirming the cuts. It seems that between transferring the “original plan” to a new “successor plan” and taking 61% of my pension and a % from other retirees, the original plan will avoid running out of money in the future. So, on January 1, 2019, instead of my regular pre-taxed check of $2,249.00, I will receive a “new” pre-taxed check of $889.14. The way the letter is written, it almost sounds as if we should be happy that they found a way to keep Local 805 afloat. I am numb…. can’t even function. How could the government approve these cuts knowing that by doing so, they are putting people out on the streets? A cut of $20.00 a month is one thing, but cutting $1,359.86 from my income every single month will put me in an early grave (my emphasis). I feel like I’m living a nightmare….Is there any help for me after January 1st when the first cut comes?”
It truly is incredible (inconceivable?) that any government agency would permit the slashing of benefits to our retirees of this magnitude. Don’t they get that these individuals won’t have any recourse but to fall onto the social safety net, which they would absolutely prefer not to do? Furthermore, don’t they realize the potential impact on our economy from the lack of spending that will result from these terrible cuts?
Lastly, the draft legislation that has been floated calls for as much as $3 billion per year going to the PBGC to “sure up” this insurance fund and to meet future calls on this capital. If protecting the taxpayer was the rationale to not going forward with the Butch Lewis Act, how is a direct payment to the PBGC better than a 30-year loan to these struggling pension plans that would have protected the benefits for the pensioners in the critical and declining systems while extending the life of these plans? It certainly seems to me that loans totaling $30-$40 billion paid back in 30 years is far superior then paying the PBGC $3 billion per year with no cap on the number of years.