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Hundreds of thousands of retired union workers are facing pension cuts that could slash their monthly payments in half — or even more.
The proposed cuts are part of a desperate effort to head off insolvency at multiemployer pension plans, pensions that typically provide benefits for workers at several companies.
It's an unconventional move: Pension law has long maintained that cutting the benefits of those already retired is off-limits. Current law allows troubled multiemployer plans to reduce the benefits that employees earn going forward, cut early retirement and disability benefits and hike employer contributions instead.
But things have gotten so dire that a coalition of employers and labor unions is asking Congress to change the law.
Multiemployer pension plans cover more than 10 million workers and retirees in the trucking, construction, retail, mining, manufacturing and other industries. Historically, the plans were considered more secure since multiple employers pay into the plans instead of relying on the fortunes of just one company.
But in the past decade, many plans have struggled with supporting an aging workforce, and large employers have been pulling out of the plans. In addition, many are still dealing with significant losses incurred during the recession.
What do you think about this?
Cited from:
http://money.cnn.com/2013/11/15/retirement/pension-cuts/index.html?iid=s_mpm