The $1.9 trillion COVID-19 relief bill, known as the American Rescue Plan, is currently making its way through Congress. Embedded in this legislation is a potential lifeline for multi-employer union pension funds, which face notable funding concerns.
Currently, as many as 200 of these multi-employer plans are underfunded and the government program that was established to be a safety net for these plans is running out of money—and fast. The Pension Benefit Guaranty Corp. (“PBGC”) is currently more than $60 billion in debt and is slated to run out of money by 2026. If that happens, beneficiaries could see their pensions cut by 90% or more.
The American Rescue Plan would provide immediate relief to the PBGC. The relief bill cleared the House Budget Committee earlier this week and is likely to fare well in the House. However, it will need the support of all 50 Democratic senators in order to make it to President Biden.