Federal Government Announces Billions in Relief to Pension Funds

On June 29, 2023, the Biden administration announced that the National Integrated Group pension plan will receive more than $887 million from the federal Pension Benefit Guaranty Corporation (known as the PBGC), guaranteeing benefits for thousands who work in or have retired from manufacturing jobs, including United Auto Workers retirees. The plan was expected to run out of money in 2034, forcing retirees to lose 15% of their benefits.

Additionally, at the end of 2022, the federal government allocated $36 billion to shore up the Central States Pension Fund, a cash-strapped retirement fund that primarily benefits members of the Teamsters union. Around 350,000 union workers and retirees are expected to be impacted by the funding nationwide.

This additional funding is available through the Butch Lewis Act, a bill included in the American Rescue Plan that allows the U.S. Treasury to backfill multiemployer pension plans that have significant unfunded liability. The overall program includes $80 billion for bailing out struggling pension plans and is expected to help more than 2 million workers and retirees and keep more than 200 pension plans solvent.

The Butch Lewis Act is being implemented as intended and saving thousands of union workers’ pensions. The implementation is helping plans avoid insolvency through at least 2051. Plans in distress and receiving assistance could increase contribution rates beyond current levels to remain solvent past 2051.

For more information on relief for pension plans, please contact your trust fund counsel.