President Joe Biden has announced a nearly $36 billion investment to prop up a financially ailing union pension plan.
On Thursday, President Joe Biden announced a nearly $36 billion infusion to restore a financially ailing union pension plan, preventing significant cuts to the retirement earnings of over 350,000 Union member employees and retirees across the U. S.
According to the Biden administration, the funding for the Central States Pension Fund is the greatest amount of federal assistance awarded for a pension plan and stems from the American Rescue Package, a $1.9 trillion coronavirus relief program that he passed into law in 2021.
Many union retirement programs have been financially stressed as a result of underfunding and other difficulties. Without federal help, Teamster members’ benefits may have been lowered by 60% on average within a few years.
“Union workers and their families can finally breathe a sigh of relief,” said Lisa Gomez, assistant labor sec. for employee benefits protection.
Multiemployer pension plans are established by agreements between unions and corporations and are partly insured by the Pension Benefit Guaranty Corp. of the federal govt. The insurance program was on pace for becoming insolvent in 2026, but pandemic relief funds are likely to keep it afloat until 2051.
In July, Biden visited Ohio to publicize the final guidelines for the pension relief program. Prior to Thursday, the program had provided assistance to 36 failing pension plans, but none had received more than $1.2 billion.
The amount flowing to the Central States Pension Fund is projected to be one-third to one-half of the full cost of the federal assistance program.
The retirement package has members from almost every state, with the Midwest having the highest proportion. According to White House data, there are approximately 40,000 members in both Michigan and Ohio, roughly 28,000 in Missouri, 25,000 in Illinois, and over 22,000 each in Texas and Wisconsin.
