Tags: multi-employer | pension | benefits | retirees

New Pension Rules Allow Multi-Employer Pension Plans to Cut Benefits

By    |   Monday, 29 December 2014 02:31 PM

The recent budget passed by Congress includes rules allowing multi-employer pension plans that are in danger of becoming insolvent to cut benefits of retirees by 30 to 60 percent

Multi-employer pensions are jointly administered by unions and groups of companies, generally in the same industry. The new rules could impact as many as 10 million workers and retirees, according to The Seattle Times.

Leaders of both political parties and even some labor groups backed the new regulations. But some critics say the provisions violate the pension law forbidding employers to reduce retirement benefits that already have been earned, unless the company goes bankrupt.

"We are incensed by this legislation," Karen Friedman, executive vice president of the Pension Rights Center, told The Times.

Others disagree, saying reform was needed to protect the Pension Benefit Guaranty Corp.

"It's not a moment to rejoice," Jean-Pierre Aubry, of Boston College's Center for Retirement Research, told The Times. But troubled pensions "need tools to navigate their way out of this," he said.

Michele Murphy, executive vice president of Supervalu Inc., and Marc Perrone, president of the United Food and Commercial Workers International Union, took to the Minneapolis StarTribune to express their support for the regulations.

"With this action, Congress is providing the critical tools so the plans themselves can take the steps needed to survive in the long term," they write.

"Congress's bipartisan action provides the opportunity to keep the majority of multiemployer plans healthier longer — and helps prevent the devastating, automatic cuts that would have come if nothing had been done."
 

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The recent budget passed by Congress includes rules allowing multi-employer pension plans that are in danger of becoming insolvent to cut benefits of retirees by 30 to 60 percent.
multi-employer, pension, benefits, retirees
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2014-31-29
Monday, 29 December 2014 02:31 PM
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