President Biden will announce $36 billion for the Central States Pension Fund today. The measure is designed to prevent drastic pension cuts for over 350,000 union workers and retirees.
“These workers paid into the fund for years or even decades, and faced cuts through no fault of their own,” stated the White House.
The Pension Benefit Guaranty Corporation approved the fund, and will be the largest-ever award of federal financial support for worker and retiree pension security.
“Ensuring that workers and their families enjoy the retirement security they earned through a lifetime of work is a central part of President Biden’s economic plan. President Biden is building the economy from the bottom up and middle out, including helping to ensure a dignified retirement for all American workers and their families,” said the White House.
This project aims to protect the earned pensions of more than 3500,000 Union Workers and retirees from 60% cuts. This plan includes truck drivers, warehouse workers, construction workers, and food processors.
Without the Special Financial Assistance program, these workers and retirees – who have already earned these benefits – would have faced reductions of roughly 60% in the next few years.
The Central States Pension Fund estimates that today’s announcement will be able to pay full benefits to workers and retirees through 2051 in the following states: Michigan, Ohio, Missouri, Illinois, Texas, Wisconsin, Indiana, Minnesota, Florida, and Tennessee.
Since it entered into force during President Biden’s term, the American Rescue Plan has been essential in protecting pension benefits.
For example, the American Rescue Plan’s Special Financial Assistance program provides financial relief to struggling multiemployer pension plans. It ensures that millions of families facing benefit cuts will receive the full benefits they earned.
The multiemployer plans – created through agreements between employers and a union – are insured by a federal agency called the Pension Benefit Guaranty Corporation (PBGC). The PBGC partially protects the benefits of approximately 11.2 million workers and retirees in around 1,400 private-sector multiemployers and union-connected plans.
Before Biden’s America Rescue Plan, the PBGC’s multiemployer pension insurance program was projected to become insolvent in 2026. Under the Special Financial Assistance program, financially struggling multiemployer pension plans can apply to the PBGC for assistance.
The American Rescue Plan’s Special Financial Assistance Program aims to protect the benefits of millions of workers who face cuts.
For example, before the program, a wave of multiemployer pension plan insolvencies was projected to leave two to three million union workers, retirees, and their families without the full benefits they had earned.
Now, two to three million workers and retirees in plans receiving assistance are expected to have full pension benefits for the next three decades.
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