Summary of the Pension Cutback Provisions in the Omnibus Spending Law

Via the Pension Rights Center:

????????????????????????????????????????In December 2014, Congress passed and President Obama signed into law the 2015 Omnibus spending bill, which includes provisions that allow trustees of certain multiemployer plans to cut retirees’ pensions. Here is a summary of these provisions:

  1. The legislation permits deep pension cuts to retirees in certain financially-troubled multiemployer plans. Financially-troubled plans are plans expected to not have enough money to pay 100% of benefits within 15 and, in some cases, 20 years.1 There are instances where the cuts could be more than 60% of a participant’s benefits. To find out how much your benefits could be cut use this calculator.
  2. The decision to cut benefits is made by plan trustees, who are typically more aligned with active workers and employers than with retirees.
  3. Retirees who are age 80 or over, or who are receiving a disability pension, are not subject to benefit cuts. Retirees ages 75-79 are subject to smaller cuts than retirees under age 75.
  4. How big or small the cuts are for those under age 75 is determined by the trustees. The cuts are subject to certain legal limits, the most important of which is that benefits cannot be cut below 110% of the amounts that the federal pension insurance agency guarantees.2
  5. Plan trustees decide how to allocate the cuts. For example, they can cut retirees’ benefits more than those of active workers, and they can decide whether and how much to reduce survivors’ benefits…

The remainder of this summary can be found at the Pension Rights Center.

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