Union Retirees Fear Dramatic Pension Cuts Under New Federal Law
Bill Hendershot and his wife live on his union pension and Social Security. Hendershot, a retired Consolidated Freightways long-distance truck driver, gets around now in a 12-year-old Toyota Corolla. The couple still pay a mortgage on their home in Canal Fulton. And he’s among a huge group of union retirees nationwide who could see their monthly private pension payments cut as much as 60 percent under a national reform measure signed into law in December by President Barack Obama. The new law, the Multiemployer Pension Reform Act of 2014, was a bipartisan effort backed by some unions. It is intended to save severely underfunded, private-sector, multiemployer pensions in which different companies pay money into one pension fund. For numerous reasons, including bankrupt employers and increasing numbers of retirees, multiemployer funds make up a large percentage of the nation’s least financially stable pensions. The act also is aimed at reducing the strain on the Pension Benefit Guaranty Corp. (PBGC), the privately funded federal backstop for pension funds. But under the new law, keeping the financially troubled multiemployer funds solvent so they at least continue to pay out some money could mean dramatically lower benefit checks for a million or more retirees across the nation, experts say. Under the law, retirees ages 80 and older would not get their benefits cut. Retirees 75 and older could get smaller cuts. Retirees younger than 75 could get their pensions reduced by the maximum amount, subject to a vote by active and retired workers. Cuts also need plan trustee approval. The Pension Rights Center created a Multiemployer Retiree Cutback Calculator for its website, www.pensionrights.org, that allows people to get an idea of how much their pension could be cut under the law.
Source/more: Akron Beacon Journal