The Restoring Pension Promises to Workers Act of 2007 would protect certain recent retirees of union pension plans from losing a large portion of their early retirement pensions.
Current law as amended by the Pension Protection Act of 2006 allows severely underfunded union pension plans to reduce certain benefits in order to improve the pension plan’s funding. Specifically a union pension plan that is underfunded may in certain circumstances reduce or eliminate the subsidized portion of an early retirement benefit. The result could be as much as a 50 percent reduction in an early retirement benefit. The law permits the benefit reduction to apply to some individuals who retire before the benefit cutback takes effect.
Section 105 of the Restoring Pension Promises to Workers Act of 2007 would require that a plan amendment may not reduce the benefit of anyone already retired when the plan amendment takes effect.
Read more about the benefit cutback in the Pension Protection Act of 2006.
Read Section 105 of the Restoring Pension Promises to Workers Act of 2007 [PDF].< Back