Pensioners Fight Back Against Cuts
The Pension Rights Center's Karen Friedman discusses a new pension law that could negatively impact millions of retirees.
A defined-benefit pension offering guaranteed lifetime income sounds like the gold standard of retirement security. But a law passed in 2014, the Multiemployer Pension Reform Act (MPRA), allows trustees of certain underfunded multiemployer plans to cut retirees’ pensions. These plans cover millions of workers in construction, trucking and other industries. Karen Friedman, executive vice president and policy director at the Pension Rights Center, a nonprofit consumer advocacy organization, spoke with Senior Editor Eleanor Laise about the new law and other threats to pension protections.
As you look at the current state of pension protections, what concerns you most?
The issue we've been most consumed with is protecting the earned pensions of retirees in multiemployer plans. MPRA torpedoes the fundamental protections of private pension law. ERISA [the federal pension law passed in 1974] gave the greatest protections to retirees, recognizing this is the most vulnerable population—once you've earned a pension, it can't be taken away from you. MPRA changed this fundamental rule.
Earlier this year, an Iron Workers pension plan in Cleveland became the first to use the new law to cut the benefits of current retirees. Does that pave the way for other plans to follow suit?
They were the first, but not the last—if we don't find a better solution. This is going to create a dangerous precedent for cutbacks in other pension plans.
Retirees in another multiemployer plan, the Teamsters Union's Central States Pension Fund, formed grassroots committees to fight proposed cuts to their benefits. What impact did that effort have?
It's one of the most amazing things I've seen. The former truck drivers became technical experts, learned the law and lobbied ferociously across the country. Republicans and Democrats are now working with us to try to change the law. The cutback provisions of MPRA must be repealed.
If retirees are concerned that their benefits could be cut, what should they do?
Follow the example of what the Central States retirees have done. We have a resource page on our website people can use. Start organizing, send comments to Treasury, create Facebook pages and start to really lobby Congress.