When the Treasury Department delivers its ruling on proposed pension cuts for truckers in May, the cargo for a wide range of retirees could be Pandora’s box, warned Pension Rights Center Policy Director Karen Friedman.
A decision to let the Central States Pension Fund Trustees cut benefits for 273,000 existing and future retirees may embolden state and local governments to try to reduce payouts as well, she predicted.
Friedman said she is also worried the decree could inspire companies to start lobbying Congress to change the law to give single-employer plans the rights to reduce payments.
Under the plan, beneficiaries could see their monthly checks shrunk by an average of 22.6 percent (say the Central States trustees) or 40 percent to 70 percent (say pensioners who contacted the pension rights center).
But National Coordinating Committee for Multiemployer Plans Executive Director Randy Defrehn said Friedman is wrong on two counts:
• There's no disaster for Central States plan participants.
• There's no ripple effect for other workers who have been counting on defined benefit plans to carry them through their post-career years.
“When people are talking about pension cuts, they are missing the whole thing about what happened. The purpose of the Multiemployer Pension Reform Act is to preserve benefits for retirees above what they would have gotten if the plans had been allowed to go bankrupt and be taken over by the Pension Benefit Guarantee Corporation,” Defrehn said.
The maximum annual benefits PBGC offers for beneficiaries of multiemployer plans range from $4,290 for workers with 10 years of services to $12,878 for those with 30 years on the job.
On average, Central States retirees are currently receiving $14,760.
He said the multiemployer pension reform law was the outgrowth of a commission with representatives of all the stakeholders in multiemployer plans.
Closely Watched Pension Case Could Bring Cuts For Other Plans
February 29, 2016
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"Central States retirees are currently receiving $14,760" I would like to look at the figure for the past decade. Would be interesting to say the least! speed reading
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pension cuts again? Ouch, painful! memory courses