Finance

Insurance Premium Increase Threatens Union Pensions

December 10, 2014
By Neal Tepel

Washington, D.C. – LIUNA – the Laborers’ International Union of North America – is urging Congress to reject a proposal which would dramatically increase insurance premiums for multiemployer pension plans, devastating millions of current and future retirees. 

“Even Scrooge couldn’t stomach such a holiday season attack on retirees,” LIUNA General President Terry O’Sullivan said. “For generations, multiemployer plans have provided financial security and dignity for Americans after a life of hard work. This is an attack on seniors, widows and all retirees. They made our country what it is, yet this robs them of what they have worked for their entire lives.”  

Currently, multi-employer plans pay an insurance premium to the Pension Benefit Guarantee Corporation to provide for partial pension payments if a plan fails. A proposal currently being considered in Congress would increase the premiums at least 300%.

LIUNA’s multiemployer pension plans cover hundreds of thousands of retirees and their families. Across the country, more than 10 million retirees rely on multiemployer plans, some of which continue to suffer from Wall Street losses during the recession. LIUNA, along with numerous other multiemployer groups, support reforms which would provide the time and tools needed to strengthen the plans at no cost to the public.

“We are not looking for a bailout,” O’Sullivan said. “But we find it insulting and egregious that while Congress can’t muster the courage to pass a needed gas tax or other proposals, they would even consider what amounts to a devastating tax on retirement funds to bail out the PBGC. It is as illogical, immoral and insane as destroying a village to save it.” 

For LIUNA alone, the premium increase would cost retirement plans at least $100 million in just the next five years – resources that would otherwise benefit current and future retirees. 

“Such an increase in premiums could force many plans to go under,” O’Sullivan said. “We support components of reforms that Congress is considering, but the addition of an exorbitant premium tax is a poison pill retirees cannot swallow.”

December 9, 2014

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