December 12, 2022
Biden Announces $36 Billion in Relief to Avoid Cuts to Promised Pension Benefits
President Biden announced $36 billion in financial relief on Thursday to prevent pension benefit cuts for thousands of union workers.
Biden was joined by Labor Secretary Marty Walsh, union leaders including AFL-CIO President Liz Shuler and workers as he detailed the funding for the Central States Pension Fund. The plan provides benefits mostly for Teamsters union employees that include truck drivers, warehouse workers, construction workers and others; the money will come from the American Rescue Plan’s Special Financial Assistance Program.
The Central States Pension Fund reported in August that it had $7.4 billion in assets and had applied for $35.1 billion in relief. The White House estimated that retirees would have faced approximately a 60% reduction in benefits without the financial relief.
Following the announcement on Thursday, Central States will be able to pay pension benefits earned by the affected Teamsters workers through at least 2051. The Biden Administration estimated that the funds will protect the benefits of more than 350,000 retirees and current union workers.
Thursday’s action was possible because Biden won approval of a multibillion-dollar fund to help the Pension Benefit Guaranty Corp. (PBGC), the federal government’s insurer of last resort, as part of his COVID-19 relief bill in early 2021. That provision helped shore up multiemployer pension plans set up for union members that were under financial threat of failing.
“Workers have earned their pensions with their blood, sweat and tears over several decades. President Biden is absolutely right to honor the promise that was made to them,” said Robert Roach, Jr., President of the Alliance. “The Alliance worked with President Shuler and the entire AFL-CIO Retirement Security Working Group to bring about this outcome. We will continue to fight so that all retirees receive the Social Security and pension benefits they have earned.”