- Pension Deal Reached
- February 17, 2015
- Law Firm: McDonald Hopkins LLC - Cleveland Office
Part of the more than $1 trillion dollar CROmnibus spending bill is a provision that would allow multi employer pension plans to cut the benefits of current retirees and raise premiums in order to save the plan from insolvency.
Payments to backstop these so-called multiemployer pension plans have run up to hundreds of millions of dollars in the last decade. The federal Pension Benefit Guaranty Corp, which serves as the backstop to these plans, has warned it may run out of funds unless Congress implements reforms.
As many as 200 multiemployer plans covering 1.5 million workers are in danger of running out of money over the next two decades. Half of those are thought to be in such bad shape that they could seek pension reductions for retirees in the near future.
The provision is the result of a bipartisan deal struck by Rep. George Miller (D-CA) and Rep. John Kline (R-MN). The deal was reluctantly supported by some unions, but opposed by many Democrats.