By: Russ Kamp, Managing Director, Ryan ALM, Inc.
Regular readers of this blog will know to whom I am referring when I mention the name, Carol. I started following Carol’s saga from late 2017 to early 2018 and first wrote about her in June 2018, when I was asked to participate in the development of the Butch Lewis Act (BLA) Legislation (thanks, Ron). Getting involved in this effort has been one of the highlights of my career to date.
Unfortunately, Carol was a member of Local 805 that became victim to the legislation known as the Kline-Miller Multiemployer Pension Reform Act of 2014 (MPRA). Under MPRA, her plan was given permission to slash promised benefits, which had a horrendous impact on the lives of retirees through absolutely no fault of their own. Carol candidly shared how she was being impacted by the 61% cut to her benefits. She said, “I received a letter from the Teamsters in March stating their intention to cut my pension from $2,600.00 a month to $1,022.00 a month….that’s 61%. It is supposed to happen in January 2019. If they get away with this, I will lose my house. I am a 64-year-old widow who can hardly afford to pay my mortgage without the cut.” In addition, she shared that “I have been under doctor’s care for the past 18 years for depression and anxiety, and I was doing fine until 2 years ago. I was forced to give up my prescription plan because I could no longer afford it.” So tragic!
Regrettably, the BLA legislation was never taken up by the Senate following passage in the House in July 2019. However, soon after President Biden’s inauguration, a similar pension bill to that of BLA was attached to ARPA. Fortunately, that legislation was signed into law in March 2021, and it is being implemented by the PBGC. The Local 805 Pension and Retirement plan, a MPRA Suspension and Partition Priority Group 2 plan, had its initial application approved for $136 million in Special Financial Assistance on May 3, 2022, and paid out on May 31, 2022. These proceeds are to be used to reinstate the benefits as they were originally established and to make participants “WHOLE” for lost benefits following those onerous cuts. On January 9, 2023, Local 805 received a Supplemental payout of $40.3 million to further support the 2003 participants in the plan.
I recently reached out to Carol to see if she benefited as the legislation intended. Here is her update:
“Hi, Russ! So nice to hear from you. I hope you’re doing well. Regarding my pension and the reinstatement, everything went very smoothly. I got my 1st reinstated check on April 1, 2022, and Every month going forward on the same day. My retroactive check was sent around the same time as my 1st reinstated check. I was able to pay back some of the money I borrowed to get by which felt really good. Unfortunately, that couldn’t make up for the loss of my house and the stress on my mind and body, but with all the help I was given, my future is bright once again. Your articles really helped my voice be heard and I thank you for that. The first thing I wanted to do when I got my pension back was to go and see Karen Ferguson (Pension Rights Center). I wanted to thank her and Terry in person for all the help they gave me. Unfortunately, when I tried contacting her, I found out I was a month too late. A while before the reinstatement kicked in, I cut myself off the Facebook pages because the stress was really getting to me. For that reason, I wasn’t aware of Karen’s passing until I tried to email her. I will always remember the sadness I felt. She pulled me through many dark moments and introduced several people into my life whose help was absolutely priceless. Because of her, I survived. Anyway, I am getting my promised pension, Russ, but I have to admit, the fear of losing it again lingers in the back of my mind. Carol
I’ve produced more than 1,240 posts on my blog since I began writing in 2014. This one is one of my favorite posts to date. It is incredibly fulfilling to know that Ryan ALM played a small part in getting Carol’s and all the other MPRA plan participants their benefits reinstated and their lost benefits repaid. I have stated before that I thought that it was outrageous what was done to these hard-working union members who suffered for years with the stress and anxiety of not knowing if they were going to survive in retirement let alone enjoy a dignified retirement.
Ron and I continue to be crusaders for the preservation of defined benefit plans. Asking untrained individuals to fund, manage, and then disburse a “benefit” with little knowledge is criminal! The consequences will be quite negative and far-reaching. If you have a DB pension benefit, you are extremely lucky. Do everything that you can to protect it. It will keep your golden years from being tarnished.