Complexity is to be expected when discussing an issue like pensions. So for the moment let’s make things simple: 150 to 200 multiemployer plans are severely underfunded and may run out of money in 15 to 20 years if no action is taken. There are approximately 1.5 million workers and retirees in these plans. To solve this problem, members of Congress are considering a proposal that would allow the trustees of these plans to immediately cut benefits across the board for all participants, including those who have been retired for many years.
Let’s borrow an example from a Wall Street Journal article to illustrate how this proposal would work: Greg Smith worked for 31 years under the Central States Teamsters Plan, which is underfunded. He currently receives a monthly pension of $3,019. If this proposal were implemented, Mr. Smith’s benefit would be cut by more than half, down to $1,200 per month.
Click here to read more at the Pension Rights Center.