12/15/2014 – Pension measure seen as model for further cuts (MarketWatch)

Dec 15, 2014 Comments Off by

A measure included in Congress’s mammoth spending bill permits benefit cuts for retirees in one kind of pension plan, a big shift that lawmakers and others believe could set a precedent for other troubled retirement programs.The legislation is aimed at defusing a potentially explosive problem—the deteriorating condition of what are known as multiemployer plans, jointly run by unions and employers. The bill cleared by the Senate late Saturday would allow troubled funds to cut benefits for current retirees in some circumstances. That is an exception to a long-standing federal rule against cutbacks in private-pension benefits.

Lawmakers and experts, while divided over the merits of the change, largely agreed that it could well be the first of many.The measure “would set a terrible precedent,” said Karen Friedman, executive vice president of the Pension Rights Center, a group that advocates for wider pension coverage and opposes benefit cuts. The bill could encourage similar cutbacks in troubled state and local pension plans, and possibly even Social Security and Medicare, she said.

Read the full article at MarketWatch. 

Financial Landing 2014

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