FACT SHEET: President Biden Announces Historic Relief to Protect Hard-Earned Pensions of Hundreds of Thousands of Union Workers and Retirees

American Rescue Plan prevents pension benefit cutsof roughly 60% in the next few years for over 350,000 Central States Pension Fund workers and retirees

Today, joined by Teamster President Sean O'Brien, AFL-CIO President Liz Shuler, Secretary of Labor Marty Walsh, and Teamster workers and retirees with multiemployer pensions, President Biden announced $36 billion for the Central States Pension Fund, preventing drastic cuts to the hard-earned pensions of over 350,000 union workers and retirees. These workers paid into the fund for years or even decades, and faced cuts through no fault of their own. Approved by the Pension Benefit Guaranty Corporation, this is the largest ever award of federal financial support for worker and retiree pension security and the largest award from the American Rescue Plan's Special Financial Assistance Program. Known as the "Butch Lewis Act" – named after the heroic Ohio union leader and pension advocate – this program provides security for more than 200 distressed multiemployer pension plans, helping to ensure 2 to 3 million workers' pension plans remain solvent and pay full benefits through at least 2051.

Ensuring that workers and their families enjoy the retirement security they earned through a lifetime of work is a central part of President Biden's economic plan. President Biden is building the economy from the bottom up and middle out, including helping to ensure a dignified retirement for all American workers and their families.

Today's Announcement Protects the Earned Pensions of more than 350,000 Union Workers and Retirees from 60% cuts: Prior to passage of the American Rescue Plan, the Central States Pension Fund, which is largely made up of Teamster workers and retirees, was the largest financially distressed multiemployer pension plan in the nation. Workers in this plan include truck drivers, warehouse workers, construction workers, and food processors.

Without the historic Special Financial Assistance program included in President Biden's American Rescue Plan, these workers and retirees – who have already earned these benefits – would have faced estimated benefit reductions of roughly 60% in the next few years. The Central States Pension Fund estimates that it will now be able to pay full benefits to workers and retirees through 2051. Today's announcement is estimated to benefit thousands of workers and retirees in individual states across the US, including:

• Michigan – 40,000 workers and retirees
• Ohio – 40,000 workers and retirees
• Missouri – 28,000 workers and retirees
• Illinois – 25,000 workers and retirees
• Texas – 22,000 workers and retirees
• Wisconsin – 22,000 workers and retirees
• Indiana – 20,000 workers and retirees
• Minnesota –19,000 workers and retirees
• Florida – 19,000 workers and retirees
• Tennessee – 14,000 workers and retirees

President Biden's American Rescue Plan Included Historic Support to Protect Pension Benefits

The American Rescue Plan's Special Financial Assistance program is providing financial relief to struggling multiemployer pension plans and ensuring that millions of families facing benefit cuts will receive the full benefits they earned.

Multiemployer plans are created through agreements between employers and a union, with plans typically involving multiple employers in a single industry or related industries. A typical worker whose multiemployer plan became insolvent would see their expected pension benefits slashed substantially. Before the American Rescue Plan, workers and retirees participating in more than 200 multiemployer pension plans faced the prospect of not receiving the full benefits they earned and need to support them and their families in retirement.

These plans are insured by a federal agency – the Pension Benefit Guaranty Corporation (PBGC) – which provides partial protection of the benefits of approximately 11.2 million workers and retirees in approximately 1,400 private-sector multiemployer, union-connected plans. Prior to the America Rescue Plan, the PBGC's multiemployer pension insurance program was projected to become insolvent in 2026. Under the Special Financial Assistance program, financially struggling multiemployer pension plans can apply to the PBGC for assistance.

The American Rescue Plan's Special Financial Assistance Program Will Have Historic Impacts:

• Positions multiemployer plans that receive assistance to remain solvent through at least 2051 – with no cuts to earned benefits:
  • Before American Rescue Plan: over 200 multiemployer plans were on pace to become insolvent in the near term.
  • Now: Thanks to the American Rescue Plan, every multiemployer pension plan that faced near-term insolvency and benefit cuts that receives Special Financial Assistance is projected to remain solvent through at least 2051.

• Protect benefits for millions of workers who faced cuts:
  • Before the American Rescue Plan: a wave of multiemployer pension plan insolvencies was projected to leave two to three million union workers, retirees, and their families without the full benefits they had earned.
  • Now: Two to three million workers and retirees in plans that receive assistance are expected to have their full pension benefits for the next three decades.

• Harsh Pension Cuts Reversed for over 80,000 Workers and Retirees in 18 Multiemployer Plans:
  • Before the American Rescue Plan: The Multiemployer Pension Reform Act (MPRA) allowed plans to, for the first time, cut workers' and retirees' benefits in order to remain indefinitely solvent. Eighteen multiemployer "MPRA plans" were approved to utilize this program.
  • Now: More than 80,000 workers and retirees in MPRA plans who, through no fault of their own, had their pension benefits cut, are eligible to have those benefits fully reinstated. The Special Financial Assistance program ensures all MPRA plans that were forced to cut benefits are able to restore those cuts in full, maintain full benefits into the foreseeable future, and be projected to remain indefinitely solvent.

• Most significant effort to protect the solvency of the multiemployer pension system in almost 50 years:
  • Before the American Rescue Plan: Before the American Rescue Plan, because of the anticipated financial pressures from the need to guarantee minimum (partial) benefits for insolvent plans, PBGC's Multiemployer Pension Insurance Program was projected to become insolvent in 2026.
  • Now: The American Rescue Plan's Special Financial Assistance program extended the solvency of the PBGC multiemployer insurance program from 2026 to 2055. This relief is the most substantial policy to strengthen the solvency of our nation's multiemployer pensions since the enactment of the Employee Retirement Income Security Act (ERISA) in 1974.

Estimated number of workers and retirees benefiting from Special Financial Assistance to the Central States Pension Fund, by state

Source: Central States Pension Fund data, available at: https://www.voicesforpensionsecurity.com/tab-states