PRC News, August 28, 2020
Fixing the multiemployer crisis is more urgent than ever. The Treasury Department recently rejected an application from the American Federation of Musicians and Employers Pension Fund (AFM-EPF) to cut benefits under the Multiemployer Pension Reform Act (MPRA). Read our press release on the rejection, where Karen Friedman said, “Now [these retired musicians] can breathe a sigh of relief that their pensions are safe – at least for now. But their fight is not over. This is not a permanent solution. Their plan and 130 others could run out of money in the future. It’s time for Congress to come to the rescue.”
The rejection of this application highlights how important it is that Congress includes multiemployer pension reform in the next COVID-19 relief package. As we’ve written before, the retirees and workers who are most at risk of losing pensions are the essential workers we all rely on. They are – or were – truck drivers, grocery workers, healthcare workers and even musicians, who keep performing online to boost the spirit of a nation facing a pandemic.
Now is the time to get involved! Use our Action Alert to write to your Senator and tell them why this is important to you. Join us, the National United Committee to Protect Pensions, and others in tweeting photos of you and your family and other activists to your Senators to tell them not to forget about you, using the hashtag #ProtectOurPensions. Remind Congress that while you can’t come to DC because of the pandemic, you are still watching!
RRF Foundation for Aging awards PRC grant for Pension Promises Initiative (PPI) to stop cuts to workers and retirees’ pensions. This generous grant will help allow PRC to continue our multi-year education and grassroots effort to promote a solution for the multiemployer crisis. We are grateful to the RRF Foundation for Aging for their continued support of this important initiative. PRC is raising additional funds for our multiemployer work to complement the grant by the RRF Foundation for Aging.
New anti-consumer Department of Labor “Notice and Access” rule goes into effect. Before the rule went into effect on July 27th, employees and retirees had to receive information about their retirement plans on paper through the mail unless they regularly used a computer at work or asked to go paperless. Now, plans are only required to notify participants by email or text message that the documents are available online, and provide a one-time paper notice allowing each participant to opt into receiving this important information in the mail. Read our press release, where Karen Friedman calls this a “cruel game of Hide and Seek,” which sends people searching for the important information they need to protect their future.
To learn more about the rule, read our new fact sheets: A guide for consumers,a detailed summary, and a list of “The Top 10 Worst Things” about the new rule.
Supreme Court sides with pension plans over participants in Thole v. US Bank. In July, the Court ruled, in a 5-4 decision, that pension plan participants have no right to sue the people running their plans for fund mismanagement. The majority opinion holds that since most people participating in a traditional pension plan will receive their promised benefits regardless of how well their plans are managed, they cannot sue, even to stop the misappropriation of pension assets in cases like this one where the plan trustees invested the money to benefit themselves and lost nearly $750 million. Read our press release on the ruling, where Karen Ferguson said, “The Court has shredded a key protection of the federal private pension law. No longer will workers and retirees be able to police the management of their pension funds. Plan trustees now have a green light to invest pension money recklessly and to use it to further their personal and corporate interests.”
The Pension Rights Center filed an amicus brief in the U.S. Court of Appeals for the Ninth Circuit in Bafford v. Northrop Grumman Corp. A group of workers and retirees from Northrup Grumman received pensions based on the benefit statements they were given over at least the last six years of their employment. The company later discovered it had made a mistake in calculating the pensions and demanded that the retirees now pay back the “overpayments.” The workers and retirees sued saying they relied on those benefit statements and should continue to get the pensions they were promised and, at minimum, should not have to pay back any money for an error they didn’t know about. PRC filed a friend-of-the-court brief that said that the participants’ are right because Grumman-Northrup and the plan administrator did not adequately monitor benefit calculations and the actuarial firm was a fiduciary because it designed the method that produced the calculation errors.
PRC files comments on Department of Labor proposal on fiduciary rule. Our comments oppose a proposal that would allow investment advisers to offer advice even if they face conflicts of interest, so long as they do not give more weight to their own interests than those of participants. This standard could allow an adviser to recommend investments that pay the adviser a higher fee than another investment, so long as the investment adviser does not weight that extra fee more heavily than the interests of the client. This proposal violates ERISA, which simply says the adviser cannot have a conflict of interest. It also is a subjective enough standard that it will be hard to enforce. Our comments argue that the adviser should never be able to consider how much he or she will be paid in deciding the right investments for the plan participant.
PRC Perspectives Blog
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A helpful guide for people awarded retirement benefits at divorce:Read about a new guide for individuals going through a divorce that explains different types of retirement benefits, discusses special considerations for individuals in controlling or abusive relationships, and describes how to get a special court order called a QDRO and what to do with it. | |
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Legislation offers hope for finding lost pensions: Read about the Retirement Savings Lost and Found Act of 2020, introduced by Senators Elizabeth Warren and Steve Daines in July. |
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