Biden gives $36B boost to troubled pension plan

President Joe Biden on Thursday announced the infusion of nearly $36 billion to shore up a financially troubled union pension plan, preventing severe cuts to the retirement incomes of more than 350,000 Teamsters workers and retirees across the United States.

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.

Many union retirement plans have been under financial pressure because of underfunding and other issues. Without the federal assistance, Teamsters 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.

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 in Wisconsin, according to the White House.