Cathy Green never paid much attention to Congress until she found out that a federal law could cut her pension by up to 30 percent. Ms. Green, from Lake Stevens, Wash., received her benefit in 2015 after being warned that the plan might go insolvent. Her pension is from the Western States multiemployer plan, a type of defined benefit plan funded by groups of employers.
Nearly 1,400 of these plans cover 10.7 million active and retired workers nationwide. However, many plans were on the brink of insolvency due to industry changes, lack of funding, and declining participation. In 2018, Western States cut benefits by 25% on average under the Multiemployer Pension Reform Act of 2014, leading to controversy and criticism.
After Congress passed a $1.9 trillion Covid relief bill last month, an $86 billion package was approved for multiemployer plans at risk of insolvency to apply for federal grants to survive until at least 2051. The aid program was met with mixed reactions, with some criticizing the use of taxpayer money to bail out private-sector pensions.
Ms. Green’s pension was restored, and she received a retroactive payment due to the aid program. The aid package has distributed billions in grants to protect the benefits of millions of workers and retirees. Some argue for further reforms to prevent future problems in the retirement system, while others support pension plans and Social Security to ensure secure retirements.
The legislation highlighted the ongoing partisan disagreement over the best way to secure retirement for American workers, a topic gaining prominence in the upcoming presidential campaign. The multiemployer aid package has helped rescue plans from insolvency and restore benefits for retirees and workers, offering peace of mind and economic stability to many.
