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Thread: Congressional leaders hammer out deal to allow pension plans to cut retiree benefits

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    Senior Member JohnDoe2's Avatar
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    Congressional leaders hammer out deal to allow pension plans to cut retiree benefits

    Congressional leaders hammer out deal to allow pension plans to cut retiree benefits


    The measure would alter 40 years of federal law and could affect millions of workers. (Alex Wong/Getty Images)

    By Michael A. Fletcher
    December 9 at 10:42 PM


    A measure that would for the first time allow the benefits of current retirees to be severely cut is set to be attached to a massive spending bill, part of an effort to save some of the nation’s most distressed pension plans.


    The rule 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 measure is now before the House Rules Committee and is likely to be moved as an amendment to a massive $1.01 trillion spending bill, perhaps by late Wednesday. It is expected to pass the Senate by Thursday.


    If passed, the change 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 are staggering toward insolvency.


    As many as 200 multiemployer plans covering 1.5 million workers are in danger of running out of money over the next two decades.

    Half of those are thought to be in such bad shape that they could seek pension reductions for retirees in the near future.


    “We have to do something to allow these plans to make the corrections and adjustments they need to keep these plans viable,” said Rep. George Miller (D-Calif.), who along with Rep. John Kline (R-Minn.) led efforts to hammer out a deal.


    But the measure in Congress is also outraging retirement security advocates, who argue that allowing cuts to plans paves the way to trims for other retirees later..


    “After a lifetime of hard work to earn their pensions, retirees don’t deserve to receive a bad deal, in which they have had no say, cut behind closed doors and secluding the very people who would be impacted the most,” said Joyce Rogers, a senior vice president for AARP, the lobbying giant lobbying group for older Americans in a statement.


    The idea of cutting benefits 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.


    “This bipartisan agreement gives pension trustees the tools they need to maintain plan solvency, preserves benefits for the long haul, and protects the 10.5 million multiemployer participants,” Randy G. DeFrehne, executive director of the National Coordinating Committee for Multiemployer Plans said in a statement. “With time running out on the retirement security of millions of Americans, moving this bipartisan proposal forward now is not only timely, but necessary.”


    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.


    “We thought our pension was secure,” said Whitlow Wyatt, a retired trucker who lives in Washington Court House, a small city in central Ohio. “That was always the word. Now they are changing that.”

    Wyatt, 70, retired with a $3,300-a-month pension in 2000 after working more than 33 years as a long-haul driver. He could face pension reductions of 30 percent or more if Congress permits trustees of the hard-pressed pension fund to slash benefits.


    The deal is aimed at helping plans such as the Teamsters’ Central States fund.


    The pensions earned by truckers in the fund are among the best enjoyed by working-class people anywhere: After 30 years on the road, many of its participants are entitled to upward of $3,000 a month for the rest of their lives.


    But now the fund, rocked by steep membership declines, an aging workforce and downturns in the stock market, is in dire financial straits, putting the retirement benefits of 400,000 participants in jeopardy.


    In its annual report last month, the Pension Benefit Guaranty Corp., the federal insurance program that backs private-sector pensions, warned that the problems facing multi-employer pensions could cause the safety net that secures them to collapse within the next decade.


    If that happens, retirees depending on multi-employer plans for their pensions would receive nothing if their plans failed. (A separate PBGC insurance fund covering single-employer private pensions is in much better financial shape.) Even if the insurance fund survives, maximum coverage for people in multi-employer plans is minimal — about $13,000 a year.


    Although it has issued similar alerts in the past, the PBGC’s latest warning seems to have pushed Congress to move from studying a policy change to actively negotiating for one in recent weeks.


    The abrupt action has alarmed some pension rights advocates, who are concerned about a decline in retirement security for all Americans. They also worry about a creeping trend toward trimming pensions, citing retirement benefit cuts for government employees in Detroit and elsewhere.


    But managers of deeply troubled funds say that absent a federal bailout, which they call politically infeasible, cutting benefits is the only way to save them. Last week, more than 1,300 employers sent letters to members of Congress urging lawmakers to back the proposal to allow benefit cuts.


    “The longer we wait to take action, the more severe the impact on retirees and workers in the plans in the worst financial shape will become,” business leaders wrote. “The longer we wait, the heavier the burden will become on employers struggling to fund and extend these pension plans.”


    That is the situation confronting the Central States plan, which was notorious in the 1960s and ’70s for being used as a slush fund for organized crime. Since then it has operated under federal court supervision and with the help of professional fund managers. Yet that has not been enough to overcome demographic and other trends that have weakened its finances.


    In 1980, the Central States fund had four active participants for every retiree. Now, there are nearly five retirees or inactive members for every worker, because many unionized trucking firms have gone out of business in the decades since deregulation, Thomas C. Nyhan, executive director of Central States, told Congress earlier this year.


    The fund has about $18 billion in assets and pays out annual benefits of $2.8 billion to retirees. But it receives just $700 million each year from employers. Even given the strong stock market returns of recent years, that puts the plan on course to run out of money within the next 10 to 15 years, Nyhan has said.


    The fund ran into trouble during the dot-com crash of the early 2000s. Also, United Parcel Service, once the largest firm in Central States, paid more than $6 billion to drop out of the fund in 2007. Much of that money was lost when the market tanked in 2008, leaving the fund in perilous condition.


    Some see cutting benefits preemptively as the only way to keep troubled plans such as Central States afloat. Under the agreement reached by congressional negotiators, retirees over age 75 as well as those who are disabled would be shielded from any reductions. Also, any benefit cuts would be subject to a vote of plan participants.


    Nonetheless, many retirees feel betrayed. “I never dreamed they would pull the rug out from under us,” said Greg Smith, 66, a retired shipping clerk who retired in 2011 with a $3,000-a-month pension after 42 years on the job. “I actually retired because I was worried about them cutting pensions. I thought I would be grandfathered in with protections. But I guess not.”


    Related content from The Post’s personal finance section:

    Why you’re often better off saving for retirement than buying a home
    What to do if your pension is frozen
    Retirement mistakes people make at every age

    http://www.washingtonpost.com/busine...y.html?hpid=z1

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    Senior Member JohnDoe2's Avatar
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    Newmexican likes this.
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    But they did not reduce Congress retirement benefits. Must be nice in those Ivory Towers!

    Can anyone recall a worse Congress than this one wound up showing itself to be in the end?

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    Senior Member JohnDoe2's Avatar
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    On The Record


    REPRESENTATIVE PHIL ROE (R-TN)


    HOUSE EDUCATION & WORKFORCE COMMITTEE

    "Pension plans that include hundreds of thousands of workers will become insolvent unless they receive the tools necessary to change course. If they don't, it is impossible to predict with any certainty how far the consequences ..."
    READ MORE

    CAROL DUNCAN


    PRESIDENT, GENERAL SHEET METAL WORKS, OREGON


    "I along with SMACNA support the "solutions not bailout" proposal developed over 18 months with both labor and management working together. We're not asking for a taxpayer bailout. It's a self-help plan for plan -- self-help for..."
    READ MORE

    SEAN MCGARVEY


    PRESIDENT OF THE NORTH AMERICA'S BUILDING TRADES UNIONS


    "So in order to protect multiemployer retirement security and to avoid any semblance of taxpayer bailout, labor and management in the construction industry have worked hand in hand to formulate a reasonable and workable package ..."
    READ MORE

    TOM NYHAN


    EXECUTIVE DIRECTOR, CENTRAL STATES SOUTHEAST AND SOUTHWEST AREAS PENSION FUND


    "We are going -- it's not a question of if there are going to be benefit cuts. There are going to be benefit cuts. The question is when and how they're going to happen. And the question we need to determine: Is there a way to ..."
    READ MORE

    TOM NYHAN


    EXECUTIVE DIRECTOR, CENTRAL STATES SOUTHEAST AND SOUTHWEST AREAS PENSION FUND


    "If we do nothing and the PBGC fails, we will pay out $28 billion through date of insolvency. However, if we act, our participants will receive over $72 billion over the next 50 years."
    READ MORE

    REPRESENTATIVE JOHN KLINE (R-MN)


    HOUSE EDUCATION AND THE WORKFORCE COMMITTEE CHAIRMAN


    "The multiemployer pension system is a ticking time bomb that will inflict a lot of pain on workers, employers, taxpayers, and retirees if Congress fails to act. Today’s report is a sober reminder that time is running out and sh..."
    READ MORE

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    Senior Member JohnDoe2's Avatar
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    Erik Ose Become a fan Activist and political blogger at LatestOutrage.org



    Tell Congress to Reject Deal Allowing Rich to Buy More Elections

    Posted: 12/11/2014 9:26 am EST Updated: 1 hour ago




    Not content with the loosened campaign finance rules made possible by Citizens United, the GOP is attempting to pass a stealth provision that would open the big money floodgates even further. Republican leaders added the measure at the last minute to the so-called "CRomnibus" spending bill now under consideration in Congress.

    As reported by Politico:
    A provision tucked deep inside the $1.1-trillion spending bill filed by Republicans on Tuesday night would dramatically increase the amount of money a single rich donor could give to national party committees each year -- from $97,200 to as much as $777,600. The provision, inserted as a rider to the bill only hours before it was filed, would mark a further erosion of campaign cash restrictions.


    The provision was hidden on page 1,599 of a 1,603-page bill. NBC News reported that House Speaker John Boehner, "along with Senate Minority Leader Mitch McConnell, (both) pushed for the campaign finance measure, according to an appropriations committee aide."


    In a statement, campaign finance reform leader Rep. John Sarbanes (D-Md.) put the blame where it belongs. "We're seeing a preview of the Mitch McConnell Senate," said Sarbanes.

    He's attempting to drastically expand the influence of the wealthy and well-connected without even introducing a bill, holding a hearing or allowing a direct vote. By tucking this into a 1,600-page funding bill, Mitch McConnell is essentially saying 'auction off our democracy or I'll shut down the government.'


    Act right now to tell your members of Congress to reject this deal, which would further increase the corrosive influence of big money on our democracy. You can send them a quick e-mail using this tool provided by Public Citizen:



    The Hill's
    constantly updated whip count for this bill shows opposition growing among Democrats and even some Republicans. Observers agree Speaker Boehner needs a substantial chunk of House Democrats to support the spending bill in order for it to pass.


    The House is expected to vote on the spending bill sometime on Thursday, with the Senate facing a midnight deadline to pass it.

    Republican leaders have said they would offer a substitute spending bill to fund the government through January if the CRomnibus is rejected.


    Another measure in the bill would give taxpayer subsidies to Wall Street derivatives trading, as first reported by HuffPost. The office of Sen. Sherrod Brown (D-Ohio)called the deal a "Wall Street giveaway."


    On Wednesday, Sen. Elizabeth Warren (D-Mass.) urged Senate Democrats to oppose the spending bill, denouncing it as "a giveaway to most powerful banks in this country."


    "This is a democracy, and the American people didn't elect us to stand up for Citigroup, they elected us to stand up for all the people," she said on the Senate floor.



    House Minority Leader Nancy Pelosi said Democrats are "deeply troubled" with the bill's measures. On Wednesday, Pelosi declared,

    "These provisions are destructive to middle class families and to the practice of our democracy. We must get them out of the omnibus package."


    According to
    HuffPost:
    Rep. Ted Deutch (D-Fla.) and other House members -- including Reps. Alcee Hastings (D-Fla.), Donna Edwards (D-Md.), Jim McGovern (D-Mass.) and Jared Polis (D-Colo.) -- issued a joint release calling for the provision to be removed or else they would not support the bill.

    An amendment offered by Rep. Deutch to remove the campaign finance provision from the CRomnibus spending bill was not adopted in a House Rules Committee hearing on Wednesday night.

    Take five minutes today to email and call your members of Congress.

    Tell them to reject this blatant attempt to allow the super wealthy to buy more elections!


    http://www.huffingtonpost.com/erik-o...b_6306722.html

    Last edited by JohnDoe2; 12-11-2014 at 01:21 PM.
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    NO AMNESTY

    Don't reward the criminal actions of millions of illegal aliens by giving them citizenship.


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    NO AMNESTY

    Don't reward the criminal actions of millions of illegal aliens by giving them citizenship.


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    NO AMNESTY

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    Wyatt, 70, retired with a $3,300-a-month pension in 2000 after working more than 33 years as a long-haul driver. He could face pension reductions of 30 percent or more if Congress permits trustees of the hard-pressed pension fund to slash benefits.
    This is completely wrong. This is the type of betrayal by a federal government that no one could even imagine. This shows how totally and completely derelict, incompetent and corrupt our government has become. In one week, they hand out money to illegal aliens, cut private workers retirement funds, and approve more spying on Americans, this time because they're playing video games.
    A Nation Without Borders Is Not A Nation - Ronald Reagan
    Save America, Deport Congress! - Judy

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