Pension benefit cuts are coming and retirees who trusted the pension promises will be impoverished.
I’ve written before about the pension benefit cuts that the Central States Pension Fund wants to impose. Some wanted the government to intervene and stop the cuts.
They got their wish. The government intervened… but not to stop the pension benefit cuts!
According to CNN Money,
The Central States Pension Fund has no new plan to avoid insolvency, fund director Thomas Nyhan said this week. Without government funding, the fund will run out of money in 10 years, he said.
At that time, pension benefits for about 407,000 people could be reduced to “virtually nothing,” he told workers and retirees in a letter sent Friday.
In a last-ditch effort, the Central States Pension Plan sought government approval to partially reduce the pensions of 115,000 retirees and the future benefits for 155,000 current workers. The proposed cuts were steep, as much as 60% for some, but it wasn’t enough. Earlier this month, the Treasury Department rejected the plan because it found that it would not actually head off insolvency.
The fund could submit a new plan, but decided this week that there’s no other way to successfully save the fund and comply with the law. The cuts needed would be too severe.
Supposedly, the pension is insured by the government-created Pension Benefit Guaranty Corporation. But—surprise, surprise—the PBGC is under-funded. It was merely invoked as an alleged safety net to keep pension “beneficiaries” (really: fraud victims) from worrying. Their job was to work hard now and then live the American dream.
Now they get to wake up and smell that rich aroma of scam.
CNN Money also published this video to give some background. It is worth watching.
Notice the use the government makes of the democratic process. The pension members get to vote on the cuts and then, if they vote “wrong,” the government overrules the vote. It’s the Liberal ideal!