The $1,400 stimulus checks made headlines, but the $1.9 trillion American Rescue Plan, signed into law by President Joe Biden March 11, also includes $86 billion to stabilize distressed multiemployer pension funds over the next three decades.
The emergency funds will protect pension benefits earned by 1.5 million active and retired workers nationwide, including about 22,000 Minnesota retirees who paid into the Central States Pension Fund.
It’s a historic win for local retirees and their grassroots fight for pension relief, and for Sen. Tina Smith, who has championed the issue from her seat on the committee overseeing pension law since taking office three years ago.
During a Zoom call to celebrate the victory March 19, Teamster retiree Dennis Kooren, who lives in the Fargo-Moorhead area, told Smith it felt like he and other Central States pensioners had been through “six years of purgatory,” waiting to see if their earned benefits would be stripped or saved.
“This is bittersweet,” Kooren said. “We’ve been fighting so hard for so long, it’s hard to believe we even won.”
After the Great Recession, trustees for the troubled fund warned that, without federal relief, it would run out of money around 2025. Instead, Congress passed a law in 2014, authored by former Minnesota Rep. John Kline, allowing multiemployer pension funds to seek authorization to cut retirees’ benefits.
But retired Teamsters in Minnesota and across the Midwest pushed back hard against the proposed cuts.
Steve Baribeau, a Teamster retiree and co-chair of the Twin Cities-based group Save Our Pensions MN, remembered a hearing on the University of Minnesota campus, where people using “wheelchairs, walkers and canes” crowded into an auditorium to plead with a Treasury representative not to approve Central States’ proposed cuts.
“It was clear they could not go back to work, and they needed their pensions,” said Baribeau, who himself faced a 47% reduction in benefits under the proposal.
After the Treasury Department rejected Central States’ rescue plan, retirees in every corner of the state began organizing, mobilizing and lobbying in support of the Butch Lewis Act, named in memory of a Teamster from Ohio who led the fight to protect pension benefits.
Smith has often said a 2018 meeting with retirees in Duluth, during her first weekend as a U.S. Senator, stuck with her, guiding her work on the issue. In her call with pensioners, Smith recalled a conversation with one woman in Duluth who said she had no backup savings.
“She said, ‘Senator, I saved, and I did everything right. But it’s hard for me to work right now. And I don’t have a Plan B. My Plan B is living under a bridge if I lose my pension.’”
As negotiations played out over the latest round of COVID-19 relief, Smith fought for inclusion of the Butch Lewis Act. The measure provides funds to prevent benefit cuts, but also to stabilize multiemployer pension funds that are struggling financially, keeping intact the federal Pension Benefit Guaranty Corporation as a backstop for benefits.
Additionally, the Butch Lewis Act restores benefits to tens of thousands of retirees and workers whose pensions have been cut since Kline’s 2014 law took effect.