President Joe Biden said on Thursday that roughly $36 billion will be injected to stabilize a financially precarious union pension plan, averting drastic reductions in the retirement earnings of more than 350,000 Teamster employees and retirees throughout the country, according to a report from The Washington Post.
According to the Biden administration, the funding for the Central States Pension Fund comes from the American Rescue Plan, a $1.9 trillion package of coronavirus relief measures that he signed into law in 2021. It is the highest amount of federal help ever given to a pension plan.
Due to underfunding and other problems, many union retirement programs have under financial hardship. Teamster members may have had their benefits cut by an average of 60% starting in a few years without the federal support.
Multiemployer pension plans are established by contracts between unions and businesses and are partially guaranteed by the Pension Benefit Guaranty Corporation of the federal government.
The insurance program was on pace to become insolvent in 2026, but the pandemic relief money is projected to keep it on stable footing through 2051.
In order to promote the final guidelines for the pension relief program, Biden visited Ohio in July. Before Thursday, 36 failing pension plans had gotten help from the program, but none had received more than around $1.2 billion.
Between one-third and one-half of the estimated total cost of the federal aid program is made up of the funds going to the Central States Pension Fund.
Participants For The Retirement Plan
Participants in the retirement plan are spread throughout practically all states, with the Midwest having the highest number.
According to statistics released by the White House, there are around 40,000 participants in both Michigan and Ohio, close to 28,000 in Missouri, 25,000 in Illinois, and approximately 22,000 in Texas and Wisconsin.