By The Associated Press, Nwlaborpress.org
June 30, 2015
The Pension Benefit Guaranty Corporation (PBGC) is getting ready to implement a new law that allows distressed union multi-employer pension plans to reduce retiree benefits — if that can halt them from sliding into insolvency. On June 17, PBGC announced “interim final” regulations telling pension plans how to apply for permission to cut retiree benefits. And the same day, the U.S. Treasury Department appointed a “special master” to be in charge of reviewing those applications.
Meanwhile, U.S. Senator Bernie Sanders (I-Vt.) and U.S. Rep. Marcy Kaptur (D-Ohio) have introduced a bill in Congress to repeal the new law.
The new law, known as Kline-Miller Multiemployer Pension Reform Act of 2014, was tucked intoa much larger bill to continue funding of the federal government, which passed in December. Kline-Miller allows a multi-employer pension plan to reduce pension benefits for current retirees if the pension plan is projected to run out of money over the next 15 years (or over the next 19 years if the plan is less than 80 percent funded or has a greater than 2-to-1 ratio of inactive to active members). The pension plans can’t cut benefits for retirees aged 80 or over, and retirees aged 75 to 79 are subject to smaller cuts than those under 75. Plans also can’t cut benefits more than needed to restore solvency, or below 110 percent of the PBGC’s own guarantee for retirees of plans that become insolvent.