Rescue Package Includes $86 Billion Bailout for Failing Pensions

[Eugene]

Source: New York Times

Rescue Package Includes $86 Billion Bailout for Failing Pensions

Democrats pushed through a big aid measure for multiemployer pensions whose problems predate the pandemic.

By Mary Williams Walsh and Alan Rappeport
March 7, 2021

Tucked inside the $1.9 trillion stimulus bill that cleared the Senate on Saturday is an $86 billion aid package that has nothing to do with the pandemic.

Rather, the $86 billion is a taxpayer bailout for about 185 union pension plans that are so close to collapse that without the rescue, more than a million retired truck drivers, retail clerks, builders and others could be forced to forgo retirement income.

The bailout targets multiemployer pension plans, which bring groups of companies together with a union to provide guaranteed benefits. All told, about 1,400 of the plans cover about 10.7 million active and retired workers, often in fields like construction or entertainment where the workers move from job to job. As the work force ages, an alarming number of the plans are running out of money. The trend predated the pandemic and is a result of fading unions, serial bankruptcies and the misplaced hope that investment income would foot most of the bill so that employers and workers wouldn’t have to.

Both the House and Senate stimulus measures would give the weakest plans enough money to pay hundreds of thousands of retirees — a number that will grow in the future — their full pensions for the next 30 years. The provision does not require the plans to pay back the bailout, freeze accruals or to end the practices that led to their current distress, which means their troubles could recur. Nor does it explain what will happen when the taxpayer money runs out 30 years from now.

-snip-

Read more: https://www.nytimes.com/2021/03/07/business/dealbook/bailout-pensions-stimulus.html

[Beachnutt]

1. YES YES YES, I am a retired teamster and so thankful for this

President Biden and the Democratic congress THANK YOU.
The pensions of folks that worked 30 and 40 years and had already retired were about to be lost in 2025.

The democratic house had passed a bill way back called the butch lewis act but the rethug senate just sat on it.

[mopinko]

2. nothing to do w the pandemic?

um, w/o braving the paywall, when members dont work, like ya know, in a plague, payouts arent sustainable. i dont care how well run your fund is.
of course it's related to the plague. and good on whoever figured this out.