By

A promise isn’t worth much if it isn’t kept, as thousands of American retirees are discovering, writes Ed Leefeldt for CBS Money Watch.
Ohio iron workers are experiencing this as their pensions have been reduced, in some case by more than half, due to troubled pension funds trying to sort their books. Using a 2014 law, the Multiemployer Pension Fund Reform Act (MPFRA), funds with significant deficits have been proposing restructuring plans to the U.S. Treasury Department, and if approved can then proceed with cuts to promised benefits to deal with solvency woes.
The 4,000 members of the Cleveland Iron Workers Local 17 pension plan “are the canaries in the coal mine as far as pension cutbacks go. At least 50 Midwestern pension plans — mostly the kind jointly administered by trustees for a labor union and a group of employers — are in this decrepit condition. Several plan sponsors have already applied to the Treasury Department to cut back retirees’ allotments,” writes Leefeldt.
(Read an ARIA story with Michael Waldon, a Teamster from Ohio, on the fight to maintain the pension promise).
Across the United States similar developments impact more than a million Americas, from retired truckers, office employees and construction workers. The market crash of the Great Recession is being blamed as one reason why some pension plans are in such turmoil.
“The stock market crash had a huge effect,” Outreach Director Joellen Leavelle of the Pension Rights Center is quoted saying. “Some plans lost billions.” Other factors include not enough younger workers coming into the trades to help pay for the pensions.
More: Cuts may be “only a glimpse” of what awaits at least a million retirees.

ARIA provides a forum for an informed discussion on retirement income adequacy, and other related issues, including pension and retirement coverage, and defined benefit pension plans – ARIA pensions blog, 12 Dunlop Street, Barrie, ON, L4N 1V6 – sitemanager@ariapensions.ca

About the Author

Hi. I am an experienced writer, editor, blogger and communications strategist, providing online and print content solutions