Nearly 400,000 retirees who worked in the trucking, parcel delivery and grocery supply industries face drastic pension cuts on July 1 as a result of a little-noticed measure attached to a huge end-of-year spending bill passed in December 2014, the New York Times reported today. Many members of Congress say they were not given the time to read the provisions or did not grasp the ramifications at the time, and they now say they would not have voted for the legislation. The bill allowed trustees of multi-employer retirement plans to slash benefits if a pension fund’s failure was likely to overwhelm the underfunded Pension Benefit Guaranty Corp., the federal government’s main insurance program for pension plans. The retirees, all beneficiaries of the Central States Pension Fund, which is projected to be insolvent within a decade, were informed of the reductions through letters that began arriving in the mail last October. By law, the cuts must be approved or rejected by the Treasury Department, which in the face of outcry has now turned for help to Kenneth R. Feinberg, the lawyer who administered compensation related to the Sept. 11 attacks and the BP oil spill in the Gulf of Mexico. Read more.
The impact of public pension debt on the economy will be the focus of a special "Eye on Bankruptcy" panel before a live audience on Saturday at ABI's Annual Spring Meeting in Washington, D.C.!
