By David Brandolph
Substantial progress is being made in meeting the Butch Lewis Emergency Pension Plan Relief Act’s (Butch Lewis Act) objective of rescuing severely underfunded multiemployer defined benefit pension plans and reinstating benefits to thousands of plan members, many of whom have experienced devastating benefit cuts.
The Road Carriers Local 707 Pension Plan in Hempstead, N.Y., is one of the latest plans to benefit from a special financial assistance (SFA) grant established under the Butch Lewis Act and administered by the Pension Benefit Guaranty Corporation (PBGC), the federal agency tasked to implement the law. The plan, which began cutting benefits after becoming insolvent in 2017, notified its members on February 24 that it had received the grant and has begun making payments to restore benefits to its 3,804 members. According to a PBGC document, the agency paid the plan more than $812 million, including interest.
Before enactment of the Butch Lewis Act, Anthony Caporino’s Local 707 pension was slashed by 70%. His wife, Laura, of Hamstead, N.C., told PRC: “We are so relieved to finally be getting the pension payments we expected and were promised. We feel like a ton of bricks have been removed from our shoulders. For the first time in years, I don’t have to be a nervous wreck about money and we don’t have to worry about being a financial burden on our kids.”
The Local 707 plan is one of five plans that have been approved for SFA grants. PBGC’s website lists the status of all plan applications. The PBGC said in a press release that the grant to the Local 707 plan is designed to “restore all benefit reductions to retirees” caused by the plan’s insolvency and to “make payments to retirees to cover prior benefit reductions.”
More than 90 percent of the plan’s retirees have been receiving reduced benefits since the plan became insolvent. Forty-four percent of the Local 707 retirees saw their benefits reduced by more than 50 percent.
So, it’s not surprising that other Local 707 plan members have been relieved and overjoyed to know that their payments are on the way.
One of those retirees is Pat Gagliardi, 68, of Islip Terrace, N.Y. When she retired to Long Island after working 25 years for Carolina Freightways and then ABF in Brooklyn, N.Y., she counted on her Local 707 monthly pension of $2,655 to support herself and her 97-year-old mother who has had several strokes and needs Pat’s full-time care.
However, through no fault of her own, in 2017, Pat’s monthly benefits were reduced by 68 percent, to $858. She was on the verge of losing her home. Fortunately, now that the Butch Lewis Act is ensuring that she will be getting the money she earned, she says that she will now be able “to pay my past due bills and stay in my home.”
Another Local 707 retiree, 81-year-old Claire Walden, also views the restoration of her benefits as a godsend.
In 2017, her monthly survivor’s pension was reduced from $2,050 to $600–a 71 percent cut. Her late husband, Ronald, was a member of the Local 707 plan after working for Yellow Freight in Maybrook, N.Y.
She said the cuts were devastating, forcing her to go back to work part-time, which she finally stopped doing at age 80. She said she was “living like a miser,” even cutting in half the recommended dosage of blood thinning medicine that her doctor had prescribed so she could reduce her expenses.
Getting the benefits restored “will significantly improve my life,” she said. “I will know I have that nest egg in case I have to have someone come in and care for me. I can go to the doctor and not worry about co-pays. I can just live again.”
The Butch Lewis Act, signed into law as part of the American Rescue Plan Act in March 2021, authorized the U.S. Treasury Department to provide the PBGC with an estimated $86 billion or more to channel to what the PBGC projects will be about 250 severely underfunded plans, saving the benefits of an estimated three million workers, retirees, spouses and widows.
PRC now wants to hear from you. If you’re from the Local 707 plan or any other plan, please post on our story bank and let us know how the aid coming from the Butch Lewis Act will help you and your family. It’s important for us to retell your stories on how the Butch Lewis Act is helping working Americans.