The devastating pension reform crammed into the omnibus spending bill that will likely soon become law would allow pension trustees to slash the benefits of retired workers and cut future benefits for a shrinking pool of middle-income employees.
These people were and are the backbone of our nation’s economy. They drive trucks, mine coal, haul bricks and bag groceries. Corporations have been weaseling out of guarantees for future retirees for years, but promises to current retirees generally have been sacrosanct.
Most of these employees contributed what was expected of them over their working lifetimes and retired — or hope to — with a well-earned nest egg.
The plans that will be affected are know as multiemployer pension plans. They typically involve union workers who are allowed to accrue benefits while changing employers, with each employer contributing to the plan.
About 1,400 such plans currently cover about 10 million workers, and most of the plans are solvent. Between 150 and 200 of them, covering roughly 1.5 million workers, are not. They could run out of funds within the next 20 years, according to the Pension Rights Center.
It’s those pension plans that the legislation aims to benefit. The Pension Benefit Guaranty Corp., an agency set up 40 years ago to guarantee those pensions, says it may run out of money to pay them in 2018, and is certain to be broke by 2025.
Hence the emergency. While it is important to help prevent these plans from becoming insolvent, pension advocates say the deal Congress worked out in haste and then attached to the $1.1 trillion budget bill funding all of government is the wrong way to do it.
That politicians are willing to eviscerate labor law safeguards that have been in place since 1974 under the Employee Retirement Income Security Act, known by its acronym, ERISA, is a sign of what little value they place on the futures of the hard-working men and women of Main Street.
Because the plans generally benefit union members, they are not popular with congressional Republicans. Union political influence has been waning for years and some of the plans — such as the Central States Teamsters fund — have a history that includes legendary levels of corruption. Even though that was generations ago, it’s enough to give cover to grandstanding lawmakers who want to look like they have a legitimate reason to vote against older, middle-class workers.
Selling out these workers is the wrong message to send to future retirees. The baby boomers now retiring may be the last generation of Americans to leave work assured of adequate income in old age. It’s not just the 1 percent who deserve security.