A bipartisan group of congressional leaders reached a deal yesterday that would for the first time allow the benefits of current retirees to be severely cut, part of an effort to save some of the nation’s most distressed pension plans, the Washington Post reported today. The measure, attached to a massive $1.01 trillion spending bill, would alter 40 years of federal law and could affect millions of workers, many of them part of a shrinking corps of middle-income employees in businesses such as trucking, construction and supermarkets. The idea is reluctantly supported by some unions and retirement fund managers who see it as the only way to salvage pensions in plans that are in imminent danger of running out of money. But it also has stirred strong opposition from retirees who could face deep pension cuts and from advocates eager to keep retiree pensions sacrosanct, even in cases when funds are in a deep financial hole. The advocates argue that allowing cuts to plans would open the door to trims for other retirees later. The deal reached would apply to multi-employer pensions, where a group of businesses in the same industry join forces with unions to provide pension coverage for employees. The plans cover some 10 million U.S. workers. Overall, there are about 1,400 multi-employer plans, many of which remain in good fiscal health and would be untouched by the deal. But several dozen have failed, and several other large ones, including Central States, are staggering toward insolvency.
