Congressional action could mean that more than 1 million Americans could see part of their monthly pension checks evaporate.
By Evan Halper
December 11, 2014
More than 1 million Americans who were promised secure, predictable retirement income probably will see part of their monthly benefit checks evaporate as Congress moves to stabilize some private pension systems veering toward insolvency.
The expected congressional action to allow previously promised private-sector pensions to be cut is another sign that decades-old assurances that workers were given about retirement income are rapidly fading.
The move comes after San Jose, Detroit and other cities have partially reneged on long-established contracts with government workers and retirees, shrinking benefit checks that were supposed to only increase over time.
Traditional political alliances have fractured as the pension measure — attached to a massive money bill needed to keep the government open — has moved toward a final vote.
Unions are bitterly split. Some are so panicked by the possibility that the entire system could collapse that they have joined with business leaders to implore Congress to act.
“This is the only realistic way to avoid insolvency and preserve as much of the promised pension benefits as possible,” Joseph Hansen, international president of the United Food and Commercial Workers, wrote in a letter to lawmakers earlier this week.
Other unions and retiree groups, including the AARP, have denounced the plan as a betrayal of a promise, enshrined in federal law for four decades, that vested pension benefits would not be cut.
The retirees whose pensions are at stake are mostly blue-collar workers, including mechanics, truckers and construction workers, who participate in what are known as multi-employer pension plans.
The plans were designed to allow workers flexibility to switch companies with ease, guaranteeing them a stable retirement in fields where they were likely to move frequently between employers.
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