President Joe Biden on Thursday announced a near $36 billion federal injection to revive pensions for 350,000 union workers and retirees, money that came from a new program in the sweeping COVID-19 relief bill passed last year.

What You Need To Know

  • President Joe Biden on Thursday announced a near $36 billion federal injection to revive pensions for 350,000 union workers and retirees

  • The financially troubled Central States Pension Fund, like dozens of other private multiemployer plans, was expected to cut pensions by as much as 60% in the next few years

  • Kenneth Stribling, a retired Teamster from Wisconsin, said he found out his pension could be cut by 55% at the same time his wife was diagnosed with pancreatic cancer

  • Republicans have sharply criticized what they say is a “bailout” for private pension plans that they say are mismanaged

The financially troubled Central States Pension Fund, like dozens of other private multiemployer plans, was expected to cut pensions by as much as 60% in the next few years, according to the White House.

That was before last year’s American Rescue Plan created a program to boost the government agency that insures those pensions, which was also expected to become insolvent by 2026.

Biden on Thursday said this will be a major boon to employees who paid into the plans with each paycheck, expecting security when they retire.

“You track every dollar of that paycheck for groceries, for mortgages … while knowing that when it's time to retire, though, that pension you earned is going to be there,” he said, with Labor Secretary Marty Walsh, Teamsters and union leaders standing behind him.

“But then imagine losing half of that pension or more through no fault of your own. You did your part. You paid in.”

The fund Biden spoke about Thursday covers tens of thousands of Teamsters – truck drivers, warehouse workers, construction workers and food processors. 

Kenneth Stribling, a retired Teamster from Wisconsin, said he found out his pension could be cut by 55% at the same time his wife was diagnosed with pancreatic cancer.

“Life changed for me that day,” he said Thursday.

Stribling, who helped lead workers’ fight in Washington to secure their retirement funds, thanked Sen. Tammy Baldwin and President Biden for his promise to “protect our rights to a dignified retirement.”

His wife, Beverly, died during the process.

“I just want you to know, sweetheart, I fulfilled your promise. I did not quit. We found a solution with this man here,” Stribling said.

Biden had first announced the updated program this summer in Ohio.

The $35.8 billion announced Thursday comes via the Pension Benefit Guaranty Corporation (PBGC) – which provides partial protection of the benefits of approximately 11.2 million people covered by 1,400 union-connected plans.

More than 200 of those plans were expected to become insolvent in the next few years, according to the White House, meaning two to three million Americans could see their pensions cut.

With the PBGC assistance, all of those plans are expected to remain viable through at least 2051, according to the White House.

Republicans have sharply criticized what they say is a “bailout” for private pension plans that they say are mismanaged.

“Throwing money at a sinking ship saves no one,” said House Education and Labor Committee ranking member Virginia Foxx, R-N.C., in a statement.

“Chronically underfunded multiemployer pensions have cracks in their foundations – bailing these programs out without requiring drastic reforms is irrational and irresponsible.”

The assistance program will total $74 to $91 billion, according to the PBGC.

The funding announced Thursday is expected to boost pensions for about 18,700 workers in Florida, 11,700 in North Carolina, 39,900 in Ohio and 21,9000 in Wisconsin, among several other states, according to the White House.