: Controversial pension rescue plan finalized

by | Jul 6, 2022 | Stock Market

The White House on Wednesday heralded the finalization of a hotly debated plan to stabilize troubled pensions.  Speaking in Cleveland, where he was joined by union workers and retirees, President Joe Biden announced a final rule implementing a financial assistance program for multiemployer pension plans. “Those retirees who lost their benefits will have them restored retroactively,” Biden said. “We turned a promise broken into a promise kept.”

The American Rescue Plan passed early last year mandated the program, allowing certain underfunded multiemployer plans to apply for taxpayer-funded assistance that can help them stabilize their finances and restore benefits that were previously cut. Interim rules for the program issued last summer by the Pension Benefit Guaranty Corp. drew criticism from pension consultants, plan trustees and other experts who were concerned that the method for calculating the financial assistance wasn’t generous enough to ensure the plans’ long-term survival.  The rule is “responsive to public comments” and includes some key changes such as allowing plans to invest a portion of their financial-assistance funds in higher-return assets, PBGC director Gordon Hartogensis said in a press briefing Wednesday. Taken together, modifications in the final rule are designed to ensure that all plans receiving assistance will get enough funds to remain solvent and pay full benefits through at least 2051, the White House said in a state …

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