Pensioners’ pensions were restored. The debate about it is not over yet.

Cathy Green has never paid much attention to what goes on in Congress. But when she heard that a federal law would allow her pension to be reduced by as much as 30 percent, she became concerned.

Ms Green, from Lake Stevens, Washington, had claimed her benefits in 2015 after people in the scheme were warned it might become insolvent. Her pension, earned from twenty years of work as an office manager for an insurance company, was part of the Western States multi-employer plan – a type of defined benefit plan created under collective bargaining agreements and funded by groups of employers.

There are approximately 1,400 of these plans nationwide, covering 10.7 million active and retired workers. But a significant number of them have been on the path to insolvency in recent decades, as a result of changes in some industries, inadequate financing and the decline in the number of participants as the workforce shrank.

To address this problem, Western states cut participants’ pension benefits by an average of 25 percent in 2018, under the terms of the Multiemployer Pension Reform Act of 2014. The law aimed to keep plans alive without taxpayer help — but caused controversy and criticism.

The cuts reduced Ms. Green’s monthly benefit of $1,265 by $380, or about 30 percent. “It may not sound like much, but for me it was a lot,” she says.

Three years ago this month, Congress changed course on these plans. As part of a $1.9 trillion Covid stimulus bill, lawmakers approved an $86 billion package for multiemployer plans facing insolvency to apply for one-time federal grants that would keep them viable until at least 2051 . The aid was a response to organized resistance to the cuts. of union members. But it sparked criticism from critics, who opposed using taxpayer money to bail out private sector pensions and said the legislation fell short of necessary reforms that could prevent future problems. They also said some plans were poorly managed.

The pension legislation underscored the partisan disagreement that continues to this day over the best way to ensure a secure retirement for American workers — an issue that the presidential campaign has brought into sharp focus. The verbal discussion about the future of Social Security began earlier this month between President Biden and former President Donald J. Trump, the presumptive Republican nominee, in a sign that reforming the program could be a major talking point this year.

Even according to conservative estimatesapproximately two-fifths of current households will not have enough retirement income to maintain their standard of living before retirement.

Progressives continue to support pension plans and Social Security, which reduce risk in retirement by paying guaranteed monthly lifetime benefits. Both programs, they argue, combat increasing wealth inequality at retirement. Conservatives favor shifting more of the U.S. retirement system to individual savings options such as 401(k)-like plans.

The multiemployer relief package has saved pensions and restored benefits to current and future retirees, even retroactively. Last year, Western states received $294.7 million in aid. Ms Green’s benefits were reinstated and she received a one-off retroactive payment of $18,597.

“With most legislation you never feel it, but this was very real for me,” Ms Green, 65, said.

The utility has distributed $53.6 billion in subsidies to 70 plans, restoring benefits to more than 775,000 workers, retirees and beneficiaries, according to the Pension Benefit Guaranty Corporation, or PBGC, the federal agency that insures private sector pensions . The agency, which administers the aid, expects a total of $79.7 billion to be distributed among 211 plans. The White House estimates that the aid will ultimately help protect the benefits of two to three million employees.

The PBGC has separate insurance programs for single-employer plans and for multi-employer plans; both are financed through contributions paid by employers. The single-employer program is well-funded, but troubled multi-employer plans pushed the insurance program toward insolvency before the Covid relief bill was passed. The premiums paid to the multi-employer fund are lower, as are the benefit guarantees.

The legislation that created the relief package, known as the Butch Lewis Act, was named after the late president of a local International Brotherhood of Teamsters in Cincinnati, who became an activist against the law that led to the cuts, known as the MPRA.

Teamster retirees played a key role in the fight against the MPRA. The Central States Pension Fund, which provides benefits to about 350,000 workers — mostly Teamster truck drivers — applied in September 2015 for permission to reduce benefits under the MPRA. Hundreds attended rallies at the U.S. Capitol, wrote letters and met with lawmakers.

“There was a hailstorm of outrage among retirees across the country, particularly among retirees in the Central States plan,” said John Murphy, an official with a local Teamsters in Boston who was a senior vice president of the national union during the multi-employer plan. conflict.

Kenneth Stribling, a retired truck driver and longshoreman in Milwaukee, joined the fight after learning that his benefits, part of the Central States plan, would be cut by 55 percent. Mr. Stribling, 72, worked for 30 years and retired in 2010. “I worked long hours of 12 to 14 hours, but it was a good career and I was able to raise my family and provide them with a good quality of care. life,” he said.

“It’s hard to describe what it’s like to be retired and on a fixed income and suddenly be told your monthly check is going to be cut in half,” Mr Stribling added.

After the Butch Lewis Act was passed in 2021, the Central States received approximately $35.8 billion.

Mr. Stribling joined a committee of Wisconsin retirees formed to protect pensions and is now chairman of the National United Committee for the Protection of Pensions. In addition to his restored pension, he receives a monthly widow’s allowance of $2,700, earned by his late wife, a schoolteacher.

The restoration of his benefits has allowed him to maintain his standard of living and help family members when they need it. “We have five children and six grandchildren, so this has meant so much to me,” he said.

Pension advocates argue that the legislation’s positive impact extends beyond the peace of mind it provides retirees. “If retirees don’t receive these benefits, those are dollars not being spent in local communities,” said Dan Doonan, executive director of the National Institute on Retirement Security, a research and advocacy group. “A regular pension check gives people the confidence to spend money, and that multiplies throughout the economy.”

The Butch Lewis Act prevented a potential collapse of the PBGC multiemployer insurance fund, which faced a $65 billion deficit and insolvency as early as 2025. That would have left all participants in the plans without insurance.

“It’s worked out largely as intended,” said Norman Stein, a pension law expert who advises the Pension Rights Center, an advocacy and consumer rights group. “It gave plans that were in trouble, often through no fault of their own, the ability to pay their benefits for the next thirty years.”

When the bill passed, Republican critics described it as a handout for unions lacking broader reforms.

Plans that receive aid do not have to pay back the subsidies, but they must invest their money more conservatively, and they are prohibited from increasing benefits or decreasing contributions. However, some critics point to the practice of using overly optimistic assumptions about future investment returns, which can make funds look healthier than they are.

“I agree that the problem is virtually impossible to solve without some federal funding,” said Charles Blahous, a researcher at George Mason University who specializes in retirement security issues. “But they should also have reformed the financing rules.”

Rachel Greszler, a senior research fellow at the Heritage Foundation, argues that the MPRA was a reasonable step toward further reform because even the reduced benefits exceeded the amounts retirees would have received from the PBGC insurance program if their plans became insolvent had become.

“I have deep sympathy for retirees who faced budget cuts, but as long as the benefits were greater than what they would have received from the PBGC, MPRA was a better approach than just ditching the deal, as many of these plans be confused. will still be insolvent in the future,” Ms. Greszler said. “If you dig yourself into a hole, stop digging.”

The legislation remains under fire. At one Senate hearing Meeting last month to discuss a range of retirement security issues, Republican lawmakers pointed to revelations that the administration had overpaid the Central States by $127 million because the plan included nearly 3,500 deceased beneficiaries in its application.

An audit of assistance by the PBGC inspector general last year revealed the overpayment. The agency has since tightened its review process by comparing its data with the Social Security Administration’s database of U.S. death certificates. Earlier this month, the U.S. Department of Labor said legal questions resolved which paved the way for the central states to return the surplus money.

Ms Green, the retired office manager, says she relies mainly on guaranteed sources of income. She lives on her Western benefits, along with the Social Security and retirement benefits she earns from two other jobs. Her monthly income is approximately $5,600. Today, her biggest concerns are the rising costs of health care.

“I’m doing well now, I’m not broke,” she said. “But every little bit helps. If you look at what inflation can do to you in fifteen or twenty years, it’s cruel.”