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.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
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 The cutback provisions of MPRA must be repealed.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.
-
Is 100 the New 70?
Eating well, exercising, getting plenty of sleep and managing chronic stress can help make you a SuperAger. Funding that long life requires longevity literacy.
By Phil Wright, Certified Fund Specialist Published
-
Nine Lessons to Be Learned From the Hilton Family Trust Contest
Disclaimers, good communication, post-marital agreements and more could help avoid conflict in a family after the owners of a wealthy estate pass away.
By John M. Goralka Published
-
403(b) Contribution Limits for 2024
retirement plans Teachers and nonprofit workers can contribute more to a 403(b) retirement plan in 2024 than they could in 2023.
By Jackie Stewart Published
-
SEP IRA Contribution Limits for 2024
SEP IRA A good option for small business owners, SEP IRAs allow individual annual contributions of as much as $69,000 a year.
By Jackie Stewart Published
-
Roth IRA Contribution Limits for 2024
Roth IRAs Roth IRA contribution limits have gone up for 2024. Here's what you need to know.
By Jackie Stewart Published
-
SIMPLE IRA Contribution Limits for 2024
simple IRA The maximum amount workers at small businesses can contribute to a SIMPLE IRA increased by $500 for 2024.
By Jackie Stewart Published
-
457 Contribution Limits for 2024
retirement plans State and local government workers can contribute more to their 457 plans in 2024 than in 2023.
By Jackie Stewart Published
-
Roth 401(k) Contribution Limits for 2024
retirement plans The Roth 401(k) contribution limit for 2024 is increasing, and workers who are 50 and older can save even more.
By Jackie Stewart Published
-
Is a Medicare Advantage Plan Right for You?
Medicare Advantage plans can provide additional benefits beneficiaries can't get through original Medicare for no or a low monthly premium. But there are downsides to this insurance too.
By Jackie Stewart Published
-
What You Must Know About the Different Parts of Medicare
Medicare Medicare can be complicated but we've got you covered. Here is a quick guide to the different benefits provided through each part.
By Jackie Stewart Last updated