Biden’s $36 BILLION pension bailout for union workers: President to announce cash injection to stave off cuts from retirement plans for construction workers and truckers
- There are about 40,000 participants in both Michigan and Ohio, nearly 28,000 in Missouri, 25,000 in Illinois and about 22,000 each in Texas and Wisconsin
- The infusion will prevent severe cuts in Central State Pension Fund
- It impacts retirement income of 350,000 Teamsters
- It is the largest federal provision for a pension fund
- Funds come from the $1.9 trillion American Rescue Plan
President Joe Biden will stage a White House event Thursday to announce an infusion of $36 billion to prop up troubled union pension plans in a move that prevents steep cuts to 350,000 retired Teamsters with an impact focused on the industrial Midwest.
Biden plans to make the announcement accompanied by Labor Secretary Marty Walsh, Teamsters President Sean O’Brien, and AFL-CIO President Liz Shuler in yet another demonstration of his pro-union leanings.
It comes hours after he announced the release of WNBA basketball star Brittney Griner in a prisoner swap with the Russians – and days after the president backed a congressional effort to impose a contract on rail workers to avert a strike.
That move had him siding with management on a deal he helped negotiate even after some rail unions voted to reject it over a sick leave dispute. He called it ‘tough for me’ when he signed the legislation into law.
President Joe Biden will speak at the White House Thursday about infusing $36 billion to prop up the Central States Pension Fund
The money for the Central States Pension Fund is the largest amount of federal aid provided for a pension plan, the Biden administration said, and comes from the American Rescue Plan, a $1.9 trillion coronavirus relief package that he signed into law in 2021.
The retired workers faced having their pension benefit cut in half.
The retirement plan has participants in almost every state, with the largest concentration in the Midwest. There are about 40,000 participants in both Michigan and Ohio, nearly 28,000 in Missouri, 25,000 in Illinois and about 22,000 each in Texas and Wisconsin, according to figures provided by the White House.
Many of those case are also important political battlegrounds, with Michigan and Wisconsin providing critical support to Biden in 2020.
Many union retirement plans have been under financial pressure because of underfunding and other issues. Without the federal assistance, Teamster members could have seen their benefits reduced by an average of 60% starting within a couple of years.
‘Union workers and their families are finally able to breathe a huge sigh of relief, knowing that their hard-earned retirement savings have been rescued from steep cuts,’ said Lisa Gomez, assistant labor secretary for employee benefits security.
Multiemployer pension funds are created by agreements between unions and companies and are partially insured by the federal government’s Pension Benefit Guaranty Corporation.
The insurance program was on track to become insolvent in 2026, but the pandemic relief money is expected to keep it on firm footing through 2051, according to the White House.
Biden traveled to Ohio in July to highlight the final rules for the pension relief program. Before Thursday, the program had awarded aid to 36 troubled pension plans, but none of those had received more than about $1.2 billion.
The amount going to the Central States Pension Fund represents somewhere between one-third and one-half of the total estimated cost of the federal aid program.