Biden allies celebrate ‘giant relief’ of pensions rescued for 72,000 Teamsters in New England
MANCHESTER, N.H. — Scott Gove, a 57-year-old driver for United Parcel Service Inc., is breathing easier now that he knows the pension he has been counting on for retirement will be paid out in full after all.
Gove, who has worked 36 years for UPS and still has at least a couple more years to go before he retires, said he and fellow members of the New England Teamsters Local 633 union had grown accustomed to disconcerting updates about the looming insolvency of their pension fund.
But the anxiety over potentially having their retirement benefits slashed has dissipated now that the federal government has stepped in to rescue their multi-employer pension plan and others like it.
“This is a giant relief for me personally and my family, knowing that my pension is secured until I’m well into the ground,” Gove told The Boston Globe on Monday at an event announcing the approval of assistance for the New England Teamsters Pension Fund.
This announcement means roughly 72,100 workers and retirees across New England will no longer face potential cuts to their pension benefits.
This group, which includes freight and delivery drivers, warehouse and bakery workers, and others, covers about 28,400 people in Massachusetts, 13,300 in Connecticut, 6,100 in New Hampshire, 4,700 in Rhode Island, 3,600 in Maine, and 1,300 in Vermont, according to the White House, which celebrated the development as an accomplishment by President Biden, Vice President Kamala Harris, and Democrats in Congress.
Nationwide, more than 1.1 million workers and retirees, including many who already had their benefits cut, have been helped by the program, which was established as part of the American Rescue Plan stimulus package that Congress passed in 2021.
Republicans all voted against the bill after trying unsuccessfully to negotiate a smaller package.
Allies of the Biden-Harris administration are touting this legislation and noting its particular benefits for members of the International Brotherhood of Teamsters, as union president Sean O’Brien has flirted with possibly endorsing GOP presidential nominee Donald J. Trump after backing Biden four years ago.
White House American Rescue Plan coordinator Gene Sperling, a senior adviser to Biden, said during Monday’s event at the Local 633 in Manchester that protecting union pensions is “one of the crown jewels” of the legislation, which incorporated the Butch Lewis Act, named in honor of a retired Ohio trucker and Teamsters union leader who fought to prevent massive pension fund cuts.
While critics have said this legislation amounts to a “bailout,” Sperling said the public should recognize that workers are the ones benefiting.
“All of this is going to the hardest working people in America, often the ones who’ve had the most physically taxing job over many decades,” he said.
The legislation set up a special financial assistance program that allows struggling multi-employer pension plans to apply for assistance from the Pension Benefit Guaranty Corp., a federal agency that protects the retirement incomes of workers in defined benefit pension plans.
The arrangement is designed to stall the insolvency of roughly 200 multi-employer pension plans for 30 years.
Many multi-employer pension plans faced funding shortfalls during and after the Great Recession, when plans were left with many more retirees than active workers. Company bankruptcies and withdrawals from plans, as well as investment losses in 2001 and again in 2008 with the stock market collapse, greatly reduced the amount of money in plans, according to the nonprofit Pension Rights Center.
Sperling acknowledged that policymakers may have more pension-related work cut out for them in the coming decades.
“You never want to pretend or predict that you solved the problem forever,” he said, “but I think we’ve given a lot of people security for a long, long time.”
Senator Jeanne Shaheen, a Democrat from New Hampshire, said workers who forwent potentially better-paying jobs so that they could instead bank on the long-term retirement security that a pension plan offers should not be held responsible for the corporate mergers, market fluctuations, and other factors that contributed to challenges related to the way these funds performed.
“I think we have a responsibility as elected officials to ensure that people are able to get the benefits that they paid for and that they’ve been promised,” she told the Globe.
Shaheen, who appeared alongside fellow Democratic Senator Maggie Hassan at Monday’s announcement, said the Biden administration recognizes the middle class “built America” and labor unions played a big role in that.
“One of the important pieces of the American dream,” she added, “is not just being able to own your own home and get a good job and put your kids through school and have health care, but it’s also about having a secure retirement.”
