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Teamsters pension cuts overview:
- Who: President Joe Biden announced the federal government will give $36 billion in aid to the Central States, Southeast & Southwest Areas Pension Plan.
- Why: The financial aid will help prevent cuts to Teamster union workers and retirees from the trucking industry.
- Where: The Central States pension plan is one of the largest multiemployer plans in the country.
President Joe Biden announced last week that the federal government will provide $36 billion to the Central States, Southeast & Southwest Areas Pension Plan in order to avoid stiff benefit cuts.
The pension plan — which covers more than 350,000 individuals as one of the largest multiemployer plans in the U.S. — is mostly made up of Teamster union workers and retirees from the trucking industry, reports Law360.
Biden reportedly announced the pension aid — which was approved by Congress in 2021 — last week while standing alongside Labor Secretary Mary Walsh and other union leaders and members at the White House.
Last year, the pension aid was approved by Congress as part of its $1.9 trillion economic stimulus and coronavirus relief package, which provided tens of billions of dollars in aid to struggling multiemployer plans, Law360 reported.
Biden, meanwhile, reportedly called the pension aid distribution the “single largest approval of funds” to come out of the Special Financial Assistance Program that was designed to help around 200 struggling plans covering as many as 3 million union retirees.
Pension plan financial aid will prevent future cuts of 60%, Biden says
The Central States fund applied to receive funding through the Special Financial Assistance Program and the Pension Benefit Guaranty Corp., with the latter set up by Congress to make sure workers received their pension benefits, Law360 reported.
Without financial help, union workers and retirees reportedly would have had to endure cuts of 60% in the coming future, according to Biden, while the White House said plans will now be able to remain solvent through 2051, according to Law360.
At the time of its passing, lawmakers reportedly said the pension rescue bill — called the Butch Lewis Act — would be able to provide around $94 billion in financial assistance to plans that were critically underfunded.
The estimated relief the pension rescue bill will be able to provide has since decreased to between $74 billion and $91 billion, Law360 reported.
In July, the White House announced Biden planned on signing an executive order aimed at protecting reproductive healthcare services in the wake of the Supreme Court overturning Roe v. Wade.
Was your pension plan financially impacted during the COVID-19 pandemic? Let us know in the comments.
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