Tags: Retired | Union Workers | Pension | Cuts

Battle Brewing to Slash Retired Union Workers' Pensions

By    |   Tuesday, 19 November 2013 12:37 PM

Major pension plans are facing insolvency. Struggling to avert a crisis, a coalition of employers and unions want Congress to allow cuts to retiree benefits, in some cases by more than half.

Multiemployer pension plans cover more than 10 million people, CNNMoney reports. The plans were historically touted as being secure since multiple employers pay in to them. But many of the plans are reportedly at risk of going broke.

Pension Benefit Guaranty Corporation, a pension plan insurer, projects that up 10 percent of the plans are facing insolvency.

Editor’s Note: Obama’s Budget Takes Aim at Retired Americans

Currently, if a pension plan needs to shape up its finances, it can reduce employees' future benefits, cut early retirement and disability benefits and hike employer contributions, CNNMoney explains. But, the law does not allow troubled plans to reduce payments to people who are already retired.

With many of the plans so severely unfunded, a coalition has formed urging lawmakers to consider eliminating that protection, allowing the most troubled plans to cut pensions for future and current retirees.

“This is unprecedented,” Karen Ferguson, executive director of the Pension Rights Center, tells CNNMoney. “These retirees in most cases are barely scraping by with their pension and Social Security benefits. It would be devastating to them,” she said.

Standing in opposition to the proposals with worried retirees are several powerful organizations, such AARP, International Brotherhood of Teamsters, Pension Rights Center and IAM National Pension Fund, Pensions & Investments reports.

But proponents of change still argue that drastic measures are necessary.

The Central States, Southeast & Southwest Area Pension Fund, is one of the most troubled plans, according to CNNMoney. It's at risk of being insolvent in the next 10 to 15 years. If cuts are permitted, more than 200,000 could see up to 60 percent swiped from their pension payments.

P&I says the fund's executive director and general counsel, Thomas Nyhan, appealed to legislators during a recent hearing in Washington.

“At this point, I think we need to deal with reality,” Nyhan said.“The longer we wait, the deeper the cuts will have to be,” he warned.

Subcommittee Chairman Representative Phil Roe, acknowledged that legislative solutions “will be painful.” But “I believe we have a commitment on both sides now to do something” he told P&I.

Editor’s Note: Obama’s Budget Takes Aim at Retired Americans
Related Stories:

© 2020 Newsmax Finance. All rights reserved.


   
1Like our page
2Share
Personal-Finance
Major pension plans are facing insolvency. Struggling to avert a crisis, a coalition of employers and unions want Congress to allow cuts to retiree benefits, in some cases by more than half.
Retired,Union Workers,Pension,Cuts
410
2013-37-19
Tuesday, 19 November 2013 12:37 PM
Newsmax Media, Inc.
 
Newsmax TV Live

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved