President Joe Biden on Thursday announced the largest rescue package for a pension plan in U.S. history. The nearly $36 billion infusion for the Central States Pension Fund will mostly benefit members of the International Brotherhood of Teamsters.
“Thanks to today's announcement, tens of thousands of union retirees and workers in states like Ohio, Michigan, Texas, Minnesota, Wisconsin, Missouri, can go to bed tonight knowing their pension they worked so damn hard for is going to be there for them when they need it,” Biden said at an event attended by Teamsters President Sean O’Brien and Labor Secretary Marty Walsh.
Biden said the cash infusion would “prevent drastic cuts to workers’ hard-earned pension benefits, cuts that have been scheduled to occur within the next few years.” Analysts have projected benefit cuts as high as 60% for some participants.
Funding for the rescue plan, which the White House said will ultimately help 350,000 union workers and retirees, will come from the Special Financial Assistance Program, which was created by the $1.9 trillion American Rescue Plan Act signed into law in 2021. The program targets financially struggling multiemployer pension plans that have applied to the Pension Benefit Guaranty Corporation for assistance. Prior to the passage of the America Rescue Plan, the PBGC, a federally chartered corporation that insures pension plans, was facing insolvency as soon as 2026.
“Over the years due to changing economic trends, persistent attacks on unions, over 200 of these multi-employer plans were facing potential insolvency,” Biden said. “That meant 2 to 3 million workers, through no fault of their own — they kept their end of the bargain — faced painful cuts to the benefits they were counting on retirement.”
The new program expects to spend between $74 billion and $91 billion overall. Republicans have criticized Biden’s efforts to boost union pension plans, charging that Democrats are simply bailing out their political allies. “PBGC’s $35.8 billion bailout of Central States, Southeast & Southwest Areas Pension Plan is a reckless use of taxpayer dollars,” Rep. Virginia Foxx (R-NC), the ranking member on the House Education and Labor Committee, said in a statement. “Throwing money at a sinking ship saves no one. Chronically underfunded multiemployer pensions have cracks in their foundations—bailing these programs out without requiring drastic reforms is irrational and irresponsible.”
