Troubled pension plans for unionized truck drivers, construction laborers and others who work for multiple companies in a single year may cut existing retiree benefits under a budget deal worked out by Congress Tuesday night.
There are about one million workers in severely underfunded multi-employer pension plans and it has been estimated that the payouts risk bankrupting the Pension Benefit Guaranty Corporation in six to eight years.
Under the proposed deal, trustees of troubled plans could propose cutting benefits to as low as 10 percent above the PBGC minimum. Currently, the maximum annual payout by the agency is $12,870, but many retirees receive less because of their length of employment and their earnings while working.
The proposal would need to be approved by the PBGC, but could be invalidated by a vote of workers and retirees in a plan.
However, restructuring of troubled “systemically important to the PBGC” plans with over $1 billion in projected payouts, like the Teamsters’ Central States Pension Plan, could be done over objections by the majority of the participants through a joint effort of the PBGC and the Treasury and Labor departments.
A coalition of unions and pension advocacy groups is trying to fight the legislation through the last days of Congress, but a spokesperson acknowledged their chances of success are minimal.