As lawmakers pressed Monday to finalize the legislative language of a must-pass omnibus spending bill, labor unions and retiree groups were mobilizing to defeat what they are characterizing as a lame-duck sneak attack on the pensions of some already-retired workers.
At issue is an effort led by Reps. John Kline and George Miller, the top Republican and Democrat on the House Education and the Workforce Committee, to bring reforms to troubled multiemployer pensions. The exact language of the proposal had not yet been announced, and it was not clear whether House leaders had in fact decided whether it would be attached to the spending bill.
Click here to read more at National Journal.
Dear Member of Congress:
On behalf of the 1.2 million active and retired members of the United Steelworkers Union (USW), I urge you to oppose last minute legislation added to year-end spending legislation which will dramatically reform the multi-employer pension system and cut benefits to existing retirees. The lack of transparency and the inability to provide significant input into legislation which impacts close to 250,000 USW members and retirees in multi-employer pension plans is the wrong approach to former workers who deferred decades of wages into this retirement option.
The multi-employer pension system does need assistance to create long term stabilization and we applaud the efforts to craft a solution. However, the issue is a long term one. Many plans which are facing financial burdens have 10 years or more to find methods to fund the liabilities owed to participants. The proposal which from our understanding, dramatically reduces benefits to retirees in pay status is an extraordinary change to long standing ERISA “anti-cutback” rules and deserves intense scrutiny before being considered as a viable solution. Every effort should be made to find solutions that do not force retirees in pay status to bear the brunt of massive cuts when many employers who withdrew from these pension plans paid pennies on the dollar to get out.
Retirement Security for Americans is an issue that is intensifying in importance for our nation. The average working household has virtually no 2 retirement savings. When all households are included— not just households with retirement accounts —the median retirement account balance is $3,000 for all working-age households and $12,000 for near-retirement households. The failure of individual savings accounts to adequately prepare working Americans for retirement highlights the importance of well-run defined benefit plans, including multi-employer pension plans.
Belonging to a union, and participating in a defined benefit pension plan like a multi-employer pension is the best way to reverse the growing retirement security crisis. That is why USW opposes this last-minute, backroom deal that did not have adequate stakeholder engagement, will potentially force massive benefit cuts to retirees, and could undermine the full faith and promise of the entire pension system.
A report on the deal being made behind closed doors in Congress states that we should be happy that it will preserve some benefits.
Really....so I should be happy that I might get $1,200 a year more than what I would get if my plan went to the PBGC? I should be happy that I would LOSE $24,000 a year to get that!? Might as well take it all so I can get on every government program I can, maybe I can get free health care too!
So instead of the House and Senate considering other possible and feasible solutions presented by the like of AARP, The Pension Rights Center, Teamsters for Democratic Union, etc., so that I may support myself, the government would rather support me?! Have you looked at the 2014 US Census report to see how much money the elderly put back in the economy compared to the 50 and under? Did you read that 1/3 of all retirees have less than $1,000 in savings?
Senators and Congressman, wake up, look at the solutions presented by all, not just the NCCMP. Many of their members do not agree to this, take your time, do it right, let all the people you represent have a voice, not just big money. Since the big player in this is Central States Pension Fund and they say they may become insolvent in 12-15 years with their $18-19 billion dollars in their fund, is it really worth destroying peoples lives, the economy and costing the government, in the long run, when they have to enter into government programs to survive? Is it worth trying to push this through the House and Senate, on secret bills that only they know what they are attached to, in the 4 days left to meet, as opposed to an extension, to look and exhaust all solutions presented by all, not just one organization whose members are not all in agreement?
Maybe look into the funds themselves. Possibly they are mismanaged, possibly their trustees do not have the expertise to manage that much money. After all, why have so many recovered from the stock market crash under the current Pension Protection Act? Why are so many well funded at this time? Maybe they are mismanaged like some of the companies that contribute to them.
Congress, do the right thing, extend this, look at all not just one, if a fund says they have at least 12 years till they become insolvent, don’t ruin the lives of individuals and families in the next 4 meeting days.
Keep in mind that the retirees and active workers did not create the underfunded pension funds. Wasn’t it Wall Street, big banks and legislation against good paying jobs? So the retirees possibly have to carry the burden of their undermining?
Is this the country that I sacrificed my life for at the age of 18, in Vietnam, as a United States Marine, that 58,000 of my brothers gave the ultimate sacrifice for (and that’s just one war). Is this the country that is trying to keep people living longer with different health programs, medication, etc., but wants to dwindle down their fixed income to where many, if not the majority, will lose everything they worked for and will have no desire to live?
To all of the Senators and Congressmen/women that will be voting to change our lives drastically, consider this.....look at your income now, look at your expenses (food, house, car, medical, donations, children, grandchildren, vacations, maintenance, insurance, taxes, etc., etc.,....get the point?) and then look at your income again with the thought that you will never get a raise again, the rest of your life (fixed income). Now watch all the costs of your expenses rise every year while your income does not. Now take 30-65% of your fixed income away knowing you’ll never get it back, knowing you’re too old to get another job. Can you survive? Now watch someone vote to take your money away who has no clue what they are doing to you, who doesn’t even try to exhaust all solutions to avoid taking your income away, who just lets someone do that to you.
We The People....really?
Retired member of Akron Ohio Teamster Local 24
Passing legislation on a tight deadline--especially a bogus deadline--is invariably a formula for serious mischief. That's what's happening with a proposal to deal with a supposed crisis in worker pensions by allowing trustees to slash the pensions of already-retired workers to shreds.
Members of the House Education and the Workforce Committee are trying to slip the measure into an omnibus spending bill to be passed before Dec. 11, when Congress leaves Washington for its vacation recess. Pension advocates are up in arms, not least because the measure's actual language hasn't been made public. (It's still in negotiation, committee staffers say.) What is known is that it would change four decades of labor law in a way that mostly affects the oldest and most vulnerable workers.
"There's no bill, no legislative language," David Certner, legislative counsel to AARP, told me Friday. "To attach this big a change to a year-end spending bill is outrageous."
What's at issue is the condition of so-called multiemployer pension plans. These are defined benefit pensions in industries comprising lots of relatively small employers. The plans often are sponsored by unions, who share trustee duties with employer representatives.
Thanks to changes in the workplace, the 2008 crash, and the long recession, many--but by no means most--of these plans are underfunded and in danger of going bust sometime in the next decade or two. In those cases, the pensions will become the responsiblity of the federal Pension Benefit Guarantee Corp.
That's a concern for two reasons: First, the PBGC, which also takes over single-employer plans that run out of money, is already in serious financial trouble. Second, although the PBGC guarantees single-employer pension benefits up to about $59,318 a year (as a straight-life annuity for someone retiring this year at 65), the ceiling is much lower for multiemployer plans--for a worker with 30 years of pension credits, the maximum PBGC guarantee is $12,870. (The guarantees are adjusted each year for inflation.) That would be a huge cut for many workers with long years on the job.
To keep many of these plans solvent, the committee is considering a proposal to allow plan trustees to cut retirees' pensions now, many years in advance of any looming insolvency. The benefit cut could be no lower than 110% of the PBGC guarantee, or about $14,150 for that 30-year worker this year.
This would mean gutting the fundamental principle underlying the federal ERISA law governing private sector pensions. "The law says that once a retiree has earned a benefit, it must continue to be paid, until the day the fund is depleted," says Karen Friedman, policy director of the Washington-based Pension Rights Center.
That may sound like financial brinksmanship, but it's really a guarantee that all pension beneficiaries will be treated equally--pension trustees can't slash the benefits of the already-retired in order to preserve those for members still working.
The remedy is being crafted by Committee Chairman John Kline, R-Minn., and its ranking member, California's Rep. George Miller, D-Martinez, who is retiring. My request for comments was funneled up to committee staff, who say that "members are still discussing the details about a possible legislative solution to the multiemployer pension crisis and remain hopeful Congress will act before the end of the year."
Although some big unions favor the change, it's opposed by the boilermakers and international Assn. of Machinists, among others. "Changing ERISA to allow cuts in promised benefits is a ticket to poverty and dependence on government asisstance," IAM International President R. Thomas Buffenbarger wrote members of Congress last month.
The new proposal is an outgrowth of a study conducted last year by the National Coordinating Committee for Multiemployer Plans, which brought together union leaders, employers, and pension experts to find a way out of the crisis. The study considered numerous remedies, including merging struggling plans to improve administrative efficiencies; raising the standard retirement age from 65 to 67, as Social Security has done; and increasing premiums paid by employers to the PBGC to shore up its funding.
But the most draconian idea was to allow "early corrective actions" such as the benefit cuts.
Congressional sources say the proposals on the table would incorporate protections for the oldest and most vulnerable retirees, as well as a requirement that plan members vote to approve the benefit cuts. But Friedman says that's not very comforting: any such vote would pit existing workers, who can still accumulate pension credits on the job, against retirees, who can't return to the workforce. "That creates a real conflict of interests," she says.
What's most irksome about the Congressional maneuvering is the ginned-up atmosphere of urgency around it. For even seriously impaired pension plans, the day of reckoning may be 10 or 20 years off; a lot can happen in that time frame to improve their condition or for other solutions to bubble to the surface.
"Yes, there's a problem," Friedman says, "but it doesn't have to be solved this very second, with three days left in the session."
the measure's fate is uncertain; as word of a pending Kline-Miller deal started leaking out this week, the opposition has grown more vocal. "I'm more confident today than I was four days ago," AARP's Certner told me.
But the cloud hasn't passed. While it's true that some fix is imperative, whatever takes shape should be aired in public and weighed carefully. Pushing it through in haste, as all of Capitol Hill is rushing to get out of Washington and go home for the holidays, only raises the prospect that the most powerless members of the workforce will get screwed.
(WOIO) - A new bill that could be passed before Congress leaves for winter break has a lot of retirees upset.
Donna and Daniel McAuliffe are heading into a nightmare next week, as Congress could pass a bill that opponents say will slash some retiree's pensions by 65 percent. This scares the Brunswick couple.
"It's going to hurt and it's going to hurt a lot of families," said Donna.
Supporters of the bill that will remove a longstanding anti-cutback on pension law believe if the bill fails, some pensions could be exhausted by 2021.
Daniel, who worked for Yellow Trucking for 32 years, says he earned his pension through a lifetime of hard work.
His biggest fear now?
"My house, everything I own. If this goes through, I am done," said Daniel.
The Northeast Ohio Committee to Protect Pensions was born in March and wants politicians to consider merging plans or a pension bailout. The group believes some in Congress want to sneak this bill through in only a matter of days.
"Especially trying to tack this important bill onto something that is meaningless, to push it through Congress in four days, that you have something you could have taken care of all year," said Mike Walden, with NOCPP.
Donna is wondering if anyone on Capitol Hill is listening.
"I would hope they care. This is America. Nobody thinks this kinda thing is going to happen to us," said Donna.
If passed, the bill could affect 10 million retired Americans.
When people are old, should governments guarantee they have incomes?
In the 19th century — 125 years ago — Germany became the first country to answer yes to that question, adopting an old-age pension system at the behest of Chancellor Otto von Bismarck.
Click here to read more The New York TImes.
It is urgent that Teamster President Hoffa make a strong statement to all Senators and Congresspersons to defend Teamster pensions under attack.
This letter from the IAM President must not stand alone. We need the political weight of the IBT at this time.
December 4, 2014: Congress is nearing a vote on arguably the biggest change to private pension law in decades.
The proposed reforms would grant sweeping new authority to the trustees of some “deeply troubled” multi-employer pension plans to slash benefits promised to current retirees—something that’s illegal under existing law.
See what you can do to help head off this sneak attack.
Click here to read more at In These Times.
Congress could soon allow the benefits of current retirees to be cut as part of an agreement to address the fiscal distress confronting some of the nation’s 1,400 multi-employer pension plans.
Several unions and pension advocates opposing the move, which would be unprecedented, say that permitting financially strapped plans to cut retiree benefits would violate the central promise of traditional pensions: that they would provide a defined benefit for life.
Click here to read more at The Washington Post.