Local Teamsters union gets pension fund boost from feds


WASHINGTON, D. C. – The Pension Benefit Guaranty Corporation (PBGC) is giving $7.5 million to the Valley View-based Teamsters Local 73 pension plan as part of a program to shore up underfunded pensions that was established by the American Rescue Plan.

A statement from PBGC says the pension plan covers 529 participants in the transportation industry. Without the assistance, the Local 73 plan was projected to run out of money in 2038. If the pension rescue program had not been enacted, the Local 73 plan would have had to significantly reduce participants’ benefits.

The pension relief program for troubled multi-employer pension funds was created by the Butch Lewis Act, which was championed by Democratic U.S. Sen. Sherrod Brown of Cleveland. Brown said around 10 million Americans participate in multi-employer pension plans and about 1.5 million of them are in plans that would have run out of money and been forced to cut benefits without the aid. He said around 100,000 Ohioans are in affected pension plans.

“After years of advocacy by workers, retirees, and small business owners, we saved the pensions that union workers in Northeast Ohio earned over a lifetime, with no cuts,” said a statement Brown released Monday. “This pension fix will help local workers and the businesses that employ them to grow and continue providing living wages and dignified work for Ohioans.”

Dozens of multi-employer pension plans ran into trouble when their investments took a nosedive as retirements swelled and the number of active workers paying into the plans decreased. Some of the companies that paid into the plans also went bankrupt, which increased the amount surviving companies had to pay into the combined pension pool. Coronavirus worsened the pension plans’ financial picture as more money-losing companies stopped contributing.

Since the financial assistance program for troubled multi-employer pensions was implemented as part of the 2021 legislation, dozens of plans have been approved for relief. As of April 12, PBGC has approved disbursement of about $53.9 billion to plans that cover about 786,000 workers, retirees, and beneficiaries.

The pension relief provisions in the bill were named for union leader Butch Lewis, a Cincinnati-area trucker and Purple Heart, Vietnam War veteran who died from a stroke while fighting pension cuts.

President Joe Biden touted the bill’s pension relief in a 2022 visit to Cleveland, where he announced the finalization of a rule that provided nearly $90 billion to help the Pension Benefit Guarantee Corp. shore up the multi-employer plans. He called it one of the biggest victories for union workers in the past 50 years.

Sabrina Eaton writes about the federal government and politics in Washington, D.C., for cleveland.com and The Plain Dealer.


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2024-04-15 13:57:00

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