Washington, D.C., October 29, 2013 — At a hearing today by the House Subcommittee on Health, Employment, Labor, and Pensions, the International Association of Machinists and Aerospace Workers voiced its strong opposition to any new federal legislation that would allow “deeply-troubled” multi-employer defined benefit pension plans to reduce benefits to current retirees, a practice that is not permitted by the Employee Retirement Income Security Act (ERISA).
“Raiding pension plans and robbing seniors of retirement benefits is not the way to solve any financial crisis, whether it’s in Detroit, state houses or the latest ‘solution’ to fix a small number of troubled multi-employer plans,” said IAM International President R. Thomas Buffenbarger, who attended the hearing. “The proposals being considered by Congress ask our nation’s most vulnerable citizens to pay for a problem created by Wall Street, the very ones who have taken billions in taxpayer bailouts.”
The proposals to fix the few troubled multi-employer plans would allow trustees of troubled plans to reduce benefits to current retirees down to 110 percent of the Pension Benefit Guarantee Corporation’s (PBGC) maximum of $1,072.50 per month, which would be about $1,180 per month. This could mean a substantial reduction in benefits for many retirees.
“This is just another way of weakening the defined benefit pension system that has served millions of Americans well and kept our nation’s seniors out of poverty,” said Buffenbarger. “It is unconscionable to force those who can least afford it to take such drastic cuts in benefits, benefits that they contributed to during their working careers.”
Congress is considering changes to weaken the nation’s multi-employer pension system at a time when the majority of Americans are too financially stressed to save for retirement. In a recent Wells Fargo study on middle class retirement, barely half of survey participants felt they would be able to save enough to actually retire. A stunning 37 percent said they would have to work until they were too ill or died.
More than 10 million U.S. workers are covered by multi-employer pension plans, including more than 80,000 covered by the fully-funded IAM National Pension Plan, which has over 1,750 contributing employers, $9.2 billion in assets and is the sixth largest multi-employer plan in the U.S.