AARP Is at It Again
AARP Is at It Again
As it did in 2018, the American Association of Retired Persons (AARP) came out during 2019 in favor of a federal rescue of private-sector retirement pensions. To review, the July-August 2018 edition of the AARP Bulletin reported, “AARP has testified before Congress on the issue and is calling on members to contact their lawmakers and demand that they enact legislation protecting the earned pensions of workers and retirees.”
One year later, in the July-August 2019 edition of the AARP Bulletin, the matter was brought up again in an article entitled “The Pension Crisis at Congress’ Door: Thousands of workers and retirees have suffered benefit cuts. A million more are at risk.”
Specifically, the issue revolves around “multiemployer” pension plans, which cover pools of labor-union members working for different companies, with each company helping to fund the shared plan. However, declining union membership means that fewer active workers are paying into those plans. In addition, many employers in industries such as mining and construction are losing business to nonunion competitors, which means that fewer employers are contributing their share to those plans. In fact, those plans are failing at an alarming rate. Approximately one out of every eight workers with multiemployer pensions is in a plan that is expected to run out of money within 20 years. The federal Pension Benefit Guaranty Corporation (PBGC), which insures private pension plans, pays up to $12,870 annually to a worker whose multiemployer pension plan has failed. But this safety net is getting weaker, too. The PBGC’s fund for failed pension plans is expected to go broke by 2025, as premium payments from the private sector cannot keep it solvent. The article states, “AARP and other organizations say congressional intervention is necessary to protect workers and retirees in these plans.”
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