© 2024 Pension Rights Center. This work is licensed under a Creative Commons Attribution-Non Commercial 2.5 Generic License.
For Immediate Release Contact: Karen Friedman, 202-296-3776
The Pension Benefit Guaranty Corporation (PBGC), the federal agency that backstops failing pension plans, recently announced some great news— that it has, for the fourth time in less than one month, approved financial assistance under the Butch Lewis Emergency Pension Plan Relief Act (Butch Lewis Act)—this time for the Road Carriers Local 707 Pension Plan in Hempstead, N.Y.
The latest approval under the Butch Lewis Act is not only a wonderful New Year’s gift for the plan’s 3,804 members and their families, but also provides further evidence of the critical importance of having this law in place to protect the retirement income security for millions of workers and retirees. The Butch Lewis Act, signed into law as part of the American Rescue Plan Act last March, authorized the U.S. Treasury Department to provide the PBGC with an estimated $86 billion or more to channel to about 250 severely underfunded multiemployer pension plans, saving the benefits of an estimated 3 million workers, retirees, spouses and widows.
“This is just wonderful. We worked for years with Local 707 retirees to help them get their benefits restored after their plan nosedived into insolvency and their benefits were slashed, some as much as 70 percent,” said Karen Friedman, the Executive Director of the Pension Rights Center. “We are thrilled to learn that the plan’s application under the new law has been approved and vulnerable retirees will finally be receiving all the benefits they earned.”
The retirees and workers who are benefitting from the Butch Lewis Act are the most at risk of losing their hard-earned promised pensions, despite no fault of their own. These are the workers who built – and continue to build – our nation and make it a great place to live. They are also the people we rely on during pandemic lockdowns — truck drivers, grocery workers, health care workers, ironworkers and musicians—especially the ones who boost our spirits by performing online or on their balconies when their venues aren’t available.
According to the PBGC, the Local 707 plan can now expect to receive $725.6 million in a lump sum special financial assistance (SFA) grant, enough to “restore all benefit reductions to retirees” caused by the plan’s insolvency in 2017 and to “make payments to retirees to cover prior benefit reductions.” The payments will “enable the plan to pay retirees’ benefits without reduction for many years into the future.”
The plan should receive its SFA lump sum payment by March 20, based on the PBGC’s statement to PRC on Jan. 20 that “payments are generally made within 30-60 days of approval.” Retirees who had their benefits cut should begin getting repaid as early as three months after the PBGC makes the SFA payment to the plan. Over 90 percent of the plan’s retirees have been receiving reduced benefits since the plan became insolvent. Forty-four percent of the Local 707 retirees saw their benefits reduced by more than 50 percent.
The first application approved under the Butch Lewis Act was on December 21, 2021, when the PBGC gave its thumbs up to the application from the Local 138 Pension Plan based in Baldwin, N.Y., covering 1,723 transportation industry members. Subsequently, the agency approved special financial assistance grants under the law for two other funds: Bricklayers and Allied Craftworkers Local 5 New York Retirement Fund Pension Plan, in Newburgh, N.Y., covering 821 construction industry workers; and the Idaho Signatory Employers-Laborers Pension Plan in Portland, OR, covering 682 construction industry members.
The PBGC announced Jan. 18, that it paid the Local 138 plan $112.6 million in SFA funds.
“We are glad to see these applications moving, particularly for plans like Local 707 that need help immediately to keep paying the hard-earned benefits of workers and retirees,” Friedman said.
