(AP) — President Joe Biden announced Thursday the infusion of nearly $36 billion to prop up a financially troubled union pension plan, avoiding severe cuts in retirement income for more than 350,000 Teamster workers and retirees across the United States. Joined.
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 signed into law in 2021.
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Many union retirement plans have been under financial pressure due to lack of funds and other problems. Without federal assistance, Teamster members could have seen their benefits cut by an average of 60% over a couple of years.
“Union workers and their families can finally breathe a big sigh of relief, knowing that their hard-earned retirement savings have been rescued from deep cuts,” said Lisa Gomez, assistant secretary of labor for benefits security at the employees.
Multi-employer pension funds are created by agreements between unions and companies and are partially insured by the federal government’s Pension Benefits Guarantee Corporation. The insurance program was on track to become insolvent in 2026, but pandemic relief money is expected to keep it going until 2051.
Biden traveled to Ohio in July to highlight the final rules of the pension relief program. By Thursday, the program had given aid to 36 troubled pension plans, but none of them had received more than $1.2 billion.
The amount that goes to the Central States Pension Fund represents between one-third and one-half of the total estimated cost of the federal aid program.
The retirement plan has participants in nearly 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 each in Texas and Wisconsin, according to figures provided by the White House.