If you are a Central States Pension Fund Participant, get info about what the passage of the Butch Lewis Act will mean for your pension security.
What does the law mean for the Central States Pension Fund (CSPF)?
The Pension Benefit Guaranty Corporation (the “PBGC”) will send payments directly to the Central States Pension Fund, to restore the fund to financial health.
What is the estimated timeline for CSPF to apply and receive funds?
The PBGC has 120 days (until July 11) to establish guidelines and protocols, and we expect CSPF to apply after that time. The application will be detailed, with an actuarial calculation of the money needed.
Because many funds will apply, and the PBGC has limited staffing, the process could take over a year before funds are issued. Priority will be given to those funds that are near to insolvency, those that have cut benefits, and that are especially large.
The YRC companies have been making 25% contributions since 2009. Will the Butch Lewis Act cover those contribution shortfalls?
No. The reduced accruals of YRC Teamsters were contractually negotiated and agreed to.
The Butch Lewis Act is good through 2051. Is there a long-term fix beyond that, and what is it?
The Butch Lewis Act is not a permanent guarantee, but will provide sufficient funds for pension funds to be on solid ground for decades to come. The funds must be properly managed and the union must organize more companies into the funds. For the long term, organizing is key.
Will the reported $85 billion in this law be enough to protect pensions for the next 30 years. What if it is not enough funding?
The $85 billion figure is an estimate by the Congressional Budget Office, and it is not a limit. If less than that is needed, then less will be spent. If more than that is needed, it will be covered.
What happens if there are changes in Congress? Can they change the law or reverse the funding?
Congress enacted the law, and a future Congress could amend or even repeal the law. In the near term, that is highly unlikely. Once the Treasury Department issues payments to the various pension funds, it would be nearly inconceivable that they would be taken back.
What about spouse benefits?
Spouses will be treated just like a retiree - whatever their benefit is, is protected under this law. If a CSPF participant passes away, their spouse is still guaranteed for half the participant’s benefit, or the amount they were set up for.
These FAQs were developed in conjunction with the Pension Rights Center. Many thanks to the Pension Rights Center for all their hard work on winning passage of pension protection, and for their expertise on the law and retirees’ rights. www.pensionrights.org