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Congress’ Holiday Present to Retirees: Slashing Their Pensions

For Immediate ReleaseContact: Nancy Hwa, 202-296-3776
December 10, 2014www.pensionrights.org

Policymakers say “Ho, Ho, Ho”…Retirees say, “NO, NO, NO” 

Washington – Today, the Pension Rights Center released the following statement from Executive Vice President Karen Friedman, urging the House Rules Committee not to include legislation cutting retiree pensions in the omnibus spending bill. 

“The Pension Rights Center and retirees across this country are outraged that Congress, in a last-minute, behind–closed-doors deal, is about to pass a 161-page piece of legislation that will allow trustees in financially-troubled multiemployer plans to cut the pensions of hundreds of thousands of retirees and widows. Given that even the most challenged plan, the Central States Teamster Pension Fund, is not projected to run out of money for 10 to15 years, we do not understand why Congress rushed to pass such draconian legislation in the final days of the lame-duck session – without debate, without public hearings, without the input of the vulnerable retirees who stand to lose as much as 60 percent of their hard-earned retirement benefits.

"It is a travesty that, in the year of the 40th anniversary of the landmark pension law, ERISA, Congress is about to sweep away a central tenet of the law – that, once pension benefits are earned, they cannot be reduced or cut back. Even when multiemployer plans face difficulties, retirees’ pensions are given the strongest protections under the law. Only when multiemployer plans run completely out of money, then – and only then – does the Pension Benefit Guaranty Corporation step in to assist these plans, and retirees’ benefits are reduced to the low government guaranty level. 

"The pension provisions torpedo a fundamental and sacred principle of the law and allow trustees of certain underfunded multiemployer pension plans to slash retirees’ benefits long before a plan is depleted of assets. Retirees did not cause the underfunding of plans, and, in fact, most of these plans were healthy when they retired. Why are they being blamed – and now penalized – for underfunding in plans that was caused primarily by economic conditions, deregulation, and factors that had nothing to do with them? 

"If these provisions pass, Congress would be betraying not only the spirit of ERISA, but also hundreds of thousands of retirees who now face possible cuts of up to 60 percent of the pension benefits that they have earned. These provisions should be dropped from the bill.”

 

For more information, visit our action page on multiemployer plans. 

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