The $1.9 trillion American Rescue Plan will send $1,400 checks to most Americans, give aid to states and local governments, give aid to schools, change the tax code, and expand unemployment benefits.
It’s also the culmination of the decades-long push to shore up some of the country’s financially troubled multi-employer pension plans.
The plans’ well-documented troubles have put the retirement security of millions at risk. These funds were set up decades ago by both unions and employers with the idea that workers – like truck drivers, food processors or grocery store employees – would be able to have a unified retirement plan that would follow them from job to job within their industry.
But promises made outstretch the resources available and many plans face looming shortfalls. There are somewhere in the ballpark of 1,400 such plans in the U.S., covering 10 million people, with about 100 of them currently classified as in “critical and declining” status.
Perhaps the most prominent of these plans is the Central States Pension Fund, which was set up for many workers in the Midwest and covers about 400,000 retirees and workers currently paying into the fund. Administrators of the plan offered praise for the soon-to-be law as “essential to prevent Central States from becoming insolvent in 2025—and the catastrophic benefit reductions that our participants would have faced.”
The bill, which President Joe Biden signed into law on Thursday, creates a financial assistance program to send cash payments totaling $86 billion to the Pension Benefit Guaranty Corporation, the government agency that serves as a financial backstop but is currently nearly insolvent itself.
The money would then be turned around and made available to these plans. Analysts have predicted that pension plans covering more than 3 million of these workers may be eligible for the aid, but most expect the number that actually take it up to be lower, covering somewhere around 1.5 million workers.
By Ben Werschkul
