Biden to Announce $36 Billion to Shore Up Central States Pension Fund

President Joe Biden speaks in the East Room of the White House in Washington, on Oct. 24, 2022. Anna Moneymaker/Getty Images

President Joe Biden will announce the injection of $36 billion in funding to bolster the multi-employer Central States Pension Fund and prevent “drastic cuts” to the pensions of more than 350,000 union workers and retirees on Dec. 8.

According to the Biden administration, the funding was approved by the Pension Benefit Guaranty Corporation (PBGC) and is the largest-ever amount of federal aid awarded to a pension fund.

The funding will be sourced from the American Rescue Plan, the $1.9 trillion COVID-19 relief package Biden signed into law in 2021.

“Without the historic Special Financial Assistance program included in President Biden’s American Rescue Plan, these workers and retirees—who have already earned these benefits—would have faced estimated benefit reductions of roughly 60 percent in the next few years,” according to a White House fact sheet previewing the announcement. “The Central States Pension Fund estimates that it will now be able to pay full benefits to workers and retirees through 2051.”

Established in 1955, the Central States Pension Fund is one of the country’s largest multi-employer pension plans and provides benefits to union members in the trucking, car haul, warehouse, construction, food processing, dairy, and grocery trucking industries.

According to its website, the fund pays out more than $2.8 billion in pension benefits annually and $5.7 million more per day than it receives in employer contributions.

The grant is expected to benefit workers in multiple states, including Michigan, Ohio, Missouri, Illinois, Texas, Wisconsin, Indiana, Minnesota, Florida, and Tennessee.

“Ensuring that workers and their families enjoy the retirement security they earned through a lifetime of work is a central part of President Biden’s economic plan,” the White House said. “President Biden is building the economy from the bottom up and middle out, including helping to ensure a dignified retirement for all American workers and their families.”

Teamsters President Sean O’Brien, who will join Biden for the announcement, released a statement praising the grant.

“This is an issue of fairness—of this country keeping its word to hardworking, honest people who did everything they were supposed to do in life,” O’Brien said. “Our members chose to forgo raises and other benefits for a prosperous retirement, and they deserve to enjoy the security and stability that all of them worked so hard to earn. Labor law, bankruptcy law, the tax code—so much of public policy in America today is written by and for big corporations and Wall Street, so it’s good to see elected officials stand up for working families for once.”

Republican Opposition

However, the provision of the American Rescue Plan that granted $86 billion for saving troubled pension plans was criticized by Republicans as an ineffective non-solution when the law was passed.

“This bailout is not coupled with any reforms to ensure the long-term sustainability of the multi-employer pension system,” Sen. Chuck Grassley (R-Iowa) said at the time. “So, it’s just a blank check, with no measures to hold mismanaged plans accountable.”

Grassley added that he feared the move would place taxpayers “on the hook” for future intervention to rescue the failing pension plans.

“Unless meaningful reforms are included, the precedent will be set that the taxpayer, not the PBGC, is the ultimate guarantor of private-employer pension promises,” he said.

And on Thursday, Sen. Marsha Blackburn (R-Tenn.) appeared to share Grassley’s concerns.

“Joe Biden is spending $36 billion of YOUR tax dollars to bailout big unions that have failed to properly manage their money,” she noted on Twitter.

Biden will announce the funding Thursday afternoon at the White House.