Benefits under a defined benefit pension could only be
altered in bankruptcy until passage of the Kline-Miller Multiemployer Pension
Reform Act of 2014. Details are here. The new law established a process for certain pension plans
to implement a temporary or permanent reduction of pension benefits— but only if
the plan is projected to run out of money. For 200,000 retirees under the Teamsters’
Central States Pension Fund, that is now happening. Read more here.
On the one hand, plans are able to renege on a decades-long
assurance that retirees would have a stable income in retirement. On the other
hand, the Teamsters plan implemented the change because it has $35 billion in
liabilities and only $18 billion in assets. The plan is trying to save money
for all participants. The law applies only to private sector, multiemployer
plans (usually, plans bargained by unions and employers).
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