The federal government will need an additional $4.5 billion to bail out underfunded multiemployer pension plans to guarantee solvency until 2051. The final price is now expected to exceed $90 billion.
The Pension Benefit Guaranty Corporation (PBGC) will offer two interest rates for bailout and non-bailout principal amounts, meaning troubled plans are promised more money from the start. Congress approved this special assistance under the American Rescue Plan Act of 2021 but did not set an amount. They left this up to regulators to determine how much treasury-backed funds would be needed to ensure that union-brokered plans will be financed over 30 years. Millions of union workers’ retirement benefits have been threatened, reduced, or even cut over the past twenty years – the product of poor assumption, failed investments and policies that hold healthy employers responsible for their partners’ losses.
Source: Ramsey, Austin. (October 2022). “Final Pension Bailout Rule to Add $4.5 Billion to Ultimate Cost” Bloomberg Daily Labor Report. https://news.bloomberglaw.com/daily-labor-report/final-pension-bailout-rule-to-add-4-5-billion-to-ultimate-cost