Retirees who spent nearly a decade fighting for their promised pension benefits celebrated a major win Thursday as President Joe Biden announced a $36 billion rescue for their troubled retirement plan.
The bailout of the Central States, Southeast and Southwest Areas Pension Fund, an underfunded multiemployer defined-benefit plan, is the largest amount ever awarded by the federal government to support pension security and will prevent deep cuts to the benefits of more than 350,000 workers and retirees, according to the White House.
The announcement means that “finally, the retirees can plan the rest of their lives,” said Dana Vargo, 70, of Massillon, Ohio, who helped lead the years-long grassroots effort to avert the benefit cuts. Vargo’s husband Don, a retired trucker, was facing a more than 50% reduction in his Central States pension benefit. Now, “we don’t have to continue to come to Washington to beg for what my husband worked for,” Vargo said.
The American Rescue Plan provision, named after Central States retiree and Teamsters leader Estil “Butch” Lewis, allows certain underfunded multiemployer plans to apply for financial assistance and restore benefits previously cut. Before Thursday’s announcement, the Pension Benefit Guaranty Corp., the federal agency overseeing the program, had already approved nearly $9 billion in assistance to plans covering 193,000 people.
The economic benefits are clear in the northwest Ohio town of Bryan, headquarters of Spangler Candy Co, a Central States participating employer, said Spangler president Bill Martin. The company has roughly 700 workers and retirees in the pension plan–nearly 10% of the town’s population–who were facing benefit cuts of 60% or more, Martin said, and Spangler feared for years that it could be on the hook for massive payments if the plan failed completely.
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