|
?:reviewBody
|
-
When President Joe Biden directed $36 billion to a Teamsters pension fund, he said it would prevent drastic cuts in pension benefits for 350,000 union workers and retirees. U.S. Rep. Kevin Brady of Texas, the top Republican on the House Ways and Means Committee, characterized the expenditure differently. The largest private pension bailout in American history — that only benefits a tiny minority of workers — comes thanks to Democrats allowing those who mismanaged pensions to determine whether their funds qualify for taxpayer assistance with no safeguards, Brady said in a statement Dec. 8, the day Biden announced the move. In previous fact-checks , we’ve regarded a bailout as taxpayer funds used to help certain institutions that are in financial distress. That fits here. Brady’s claim appears to be on the money: The White House and experts say the size of Biden’s pension fund action is historic. How the program works The $36 billion comes from Biden’s $1.9 trillion American Rescue Plan, the COVID-19 relief package he signed into law in March 2021 without any Republican votes in favor. Its major provisions included $1,400 payments to about 85% of Americans, $360 billion for state and local governments, and $242 billion in expanded unemployment benefits. The pension fund component is the Special Financial Assistance Program , which directs up to $91 billion to keep multiemployer union funds solvent until 2051 and to prevent pension benefits from being reduced. Union pension funds apply to the Pension Benefit Guaranty Corporation, a federal agency, for the money. Central States Pension Fund and its condition The $36 billion goes to the Central States Pension Fund , which provides pensions to nearly 360,000 union workers and retirees, primarily members of the International Brotherhood of Teamsters union. The workers are employed in trucking, warehousing, food processing and other industries. Members are mostly in Midwestern states , such as Illinois and Ohio, but they’re also in Texas and Florida. Central States said in its application that its pension plan had been certified by its actuary to be in critical and declining status. After being awarded the money, Central States said the legislative rescue allows it to avoid insolvency in 2025. The White House called the $36 billion the largest ever award of federal financial support for worker and retiree pension security. The money is a bailout Several experts told PolitiFact they know of no funding for a private pension fund on the scope of Biden’s plan. They agreed the term bailout applies. Andrew Biggs, a senior fellow at the American Enterprise Institute, said that typically when a private sector pension becomes insolvent, the plan is frozen, participants are switched to a new plan and remaining benefits are paid up to a limit. The Biden plan is completely different, in that benefits will be paid in full, and new benefits will continue to be accrued. I have no doubt that this is the largest pension bailout in history, he said. Zachary Christensen, managing director of the Pension Integrity Project at the Reason Foundation, said the payout is the first major bailout of a specific private pension plan. And a spokesperson for the Center for Retirement Research at Boston College said there is no precedent. George Mason University retirement security expert Charles Blahous said that until the American Rescue Plan, there was bipartisan commitment to the principle that private pensions were obligations that should not be shifted to taxpayers. Economic Policy Institute economist Monique Morrissey said she doesn’t doubt that the Biden buyout is the largest of its kind. But she said it is far less than the annual cost of tax benefits given to 401(k)-style retirement plans that generally benefit higher-income taxpayers. A Republican spokesperson for the House Ways and Means Committee, who responded on Brady’s behalf, said he could not find a larger bailout. The White House did not comment. International Brotherhood of Teamsters spokesperson Matt McQuaid told PolitiFact that the Central States money is to make retirees whole for their hard-earned retirements, and that Brady calls it a bailout for his own political purposes. Our ruling Brady said Biden’s funding for a union pension fund is the largest private pension bailout in American history. A bailout is the use of taxpayer funds to help certain institutions that are in financial distress. The Central States Pension Fund, which provides pension benefits to union workers and retirees, said it applied for the money because the fund is in critical and declining status. It called the $36 billion it received a legislative rescue. The White House called the $36 billion the largest ever award of federal financial support for worker and retiree pension security. We rate Brady’s statement True. RELATED: Fact-checks on pensions RELATED: Fact-checks on labor
(en)
|
![[This page as RDF]](http://data.gesis.org/claimskg/static/rdf-icon.gif){kind=icon}