Underfunded Multiemployer Defined Pension Plans – Relief Finally Arrives
Many critics disapproving of the recently-passed American Rescue Plan Act of 2021 (ARPA) are complaining it has a number of provisions in the relief package that are not COVID-19 related.
One such item included in the relief package addresses the multiemployer pensions crisis. Although the crisis began long before the COVID-19 pandemic, the economic consequences of COVID-19 exacerbated the challenges facing many multiemployer plans, employers, and essential workers; therefore, making immediate financial relief crucial. I am certainly glad it was part of the ARPA.
Over 100 multiemployer defined pension plans were expected to run out of money in the next 20 years, some as early as 2025.
Due to a combination of the 2008-2009 economic recession, the deregulation and consolidation of certain heavily unionized industries, and an overall demographic shift away from unionized labor has resulted in many, if not most, multiemployer pension plans being underfunded, according to a prominent law firm.
But thanks to the Butch Lewis Emergency Pension Plan Relief Act being passed in the ARPA, this long-overdue legislation to fix the multi-employer pension crisis has been resolved.
The Butch Lewis Act has made an immediate impact on the livelihood of over 1.5 million people, with 120,000 of them being present and former USW-represented members.
The Congressional Budget Office estimates the pensions' cost savings for these multiemployer plans will be approximately $86 billion due to the investment from the Butch Lewis Act of 2021. I cannot think of a better use for funds in the American Rescue Plan than to rescue the retirement future for 120,000 USW members and their families.
A significant number of USW-represented retirees who are impacted by this legislation do not actively belong to SOAR, but that did not stop SOAR from fighting for them.
SOAR lobbied, wrote postcards, and made phone calls in support of the provisions of the Butch Lewis Act to address this important issue. It would be great if the USW retirees who benefitted from our hard work would reconsider becoming a member of SOAR. But regardless, SOAR will continue to fight for what is right for our retirees.