By Karen Stokes
Jared Bernstein, White House Council of Economic Advisors (Photo/Obama Whitehouse)
On Wednesday June 6, President Biden joined union workers and retirees at the Max S. Hayes High School in Cleveland, Ohio to announce the final rule implementing the American Rescue Plan’s Special Financial Assistance program.
The plan will help keep pension plans above water for nearly 30 years or longer, preventing cuts from plans that were at risk of drowning in debts. It will provide nearly $97 billion to dozens of eligible plans, according to the Pension Benefit Guaranty Corporation, the agency that oversees the SFA Program.
The Special Financial Assistance Program passed as part of the $1.9 trillion American Rescue Plan Act coronavirus relief package last year.
“Before the American Rescue Plan you had workers and retirees participating in more than 200 multiemployer pension plans who literally faced the prospect of not receiving the full benefits they need to support themselves and their families in retirement,” said Jared Bernstein, White House Council of Economic Advisers.
Two to three million workers and retirees who would have faced dramatic cuts to their pensions will receive the benefits they paid into and depended on for their retirement security, and previous cuts to their pensions will be reversed.
“Many of the multi-employer plans are union workers, a lot of them are in construction,” said Bernstein. “If you think about a construction site you have laborers, pipe fitters and truck drivers. Since it was inefficient for one employer to set up a pension, these employers banned together and created multiple pension plans.”
Bernstein said the plans were not adequately managed, funded or administered. Problems emerged that were no fault of the workers who in many cases spent their entire careers working in physically taxing construction occupations expecting a retirement pension that in some cases was cut.
“This plan provides the funding and the architecture for the pensions to be adequately funded into the future,” Bernstein said.
The President is strengthening families’ retirement savings, while Republican Members of Congress led by Senator Rick Scott, want to threaten it by putting Social Security on the chopping block every five years.