The Biden administration has released $36 billion in bailout money for the Central States Pension Fund (CSPF) that will go toward protecting the pensions of over 350,000 workers, including drivers who work for or have retired from less-than-truckload carriers Yellow and ABF Freight.
The money was authorized within the Butch Lewis Pension Plan Relief Act of 2021, legislation that was rolled into the $1.9 trillion American Rescue Plan signed into law by President Joe Biden in March last year.
“These workers paid into the fund for years or even decades and faced cuts through no fault of their own,” the White House asserted in a statement Thursday. “Approved by the Pension Benefit Guaranty Corporation, this is the largest-ever award of federal financial support for worker and retiree pension security and the largest award from the American Rescue Plan’s Special Financial Assistance Program.”
CSPF, largely made up of Teamsters union workers and retirees, had been the largest financially distressed multiple-employer pension plan in the country and was in danger of becoming insolvent, according to some estimates, by 2025.
Before the American Rescue Plan’s financial assistance program essentially bailed out the plan, Teamsters workers and retirees had faced an estimated 60% cut in retirement benefits over the next several years. CSPF officials now estimate it will be able to pay full benefits through 2051, the White House stated.
Among the beneficiaries are approximately 30,000 current employees of both ABF Freight, part of ArcBest (NASDAQ:ARCB), and Yellow Corp. (NASDAQ: YELL).
“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,” commented Teamsters General President Sean O’Brien.
“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.”
Over 20% of those benefiting from the funds reside in Michigan and Ohio, according to a White House fact sheet.