Legislature is set to vote on a $1.1 trillion spending statement this week, one with a troubling stipulation for U.S. retirees. If the bill passes, the promised departure reimbursement of millions of workers could be slashed.
Maybe not accurate now. But a condition in a $1.1 trillion expenditure bill that Congress may pass this week could set a frightening model. It would allow the promised pension benefits of up to 1.5 million workers and retirees to be cut.
The 31 million people in so-called only employer plans wouldn’t be exaggerated by the bill. The bigger fear is about the 10 million workers and retirees in pooled plans. Ten to 15 percent of those workers are in plans that may require making cuts.
A retiree with a pension of $24,000 per year and 25 years of service could see his or her yearly advantage cut in half, according to the Pension Rights Center.
Retirees age 75 and older would be secluded from some advantage cuts, and so would disable retirees. In the last 15 years, the part of the U.S.’s largest companies offering defined-benefit pensions to new workers has fallen from 60 percent to 24 percent, estimates Towers Watson.
Perhaps. Nothing in the proposed bill affects shared plans that are in high-quality financial shape, or any of the plans offered by single employers. But if the bill passes, it will smash promises that employers complete to their workers, Karen Friedman of the Pension Rights Center told Bloomberg earlier this year. “It’s going to guide to a society where no one can depend on anything.”