Congress passes major change to law on union pensions

[Omaha Steve]

23. I read so much in a week, here is more from THE SAME LINK

It would also allow severely underfunded plans (those expected to run out of money in 20 years or less) to reduce benefits for existing retirees — if that would prevent the plan from becoming insolvent. Plan trustees would not be allowed to cut benefits for disabled retirees or retirees 80 years or older. And the cuts for retirees ages 75 to 79 would be less than younger retirees. Benefits could not be cut to a level below 110 percent of PBGC’s minimum benefit, but that could still be a pretty hefty cut. And the consequences could be widespread: Up to 3 million people are in plans that are regarded as severely underfunded.

One part of Amendment 1 came at Miller’s insistence, and was not part of the Solutions Not Bailouts proposal: In plans with more than 10,000 participants (retirees and active workers), participants would have a chance to vote to reject the proposed cuts. But the cuts would only be rejected if more than 50 percent of participants voted against them, not 50 percent of those voting. Even then, the U.S. Treasury Department can override the vote and go forward with the cuts if it concludes that impending plan insolvency poses “systemic” risk to PBGC.

The legislation was supported by the Building Trades of North America, as well as Associated General Contractors; United Association of Plumbers and Pipefitters; International Union of Operating Engineers; International Union of Painters and Allied Trades; United Brotherhood of Carpenters; Service Employees International Union; and United Food and Commercial Workers, as well as Kroger Corporation.

“This is a tool for trustees of plans that can be made solvent long-term,” said Randy DeFrehn, executive director of NCCMP, the multi-employer trade group that originated the proposal. DeFrehn said a bailout, or other fixes, might have been preferable, but when the Democrats were in charge of the House, his group was unable to get anywhere with proposals for the government to step in to guarantee the PBGC. “I think the Republicans did this because they don’t want … PBGC to go bankrupt and have to write a $40 or $100 billion check in the future.”