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Biden announces an initiative to protect the pensions of millions of workers from losses due to a recession

2022-07-06T13:59:34.174Z

Hundreds of retirement plans "are on track to become insolvent in the short term because their investments struggled in the economic crisis," the White House says.



By Rebecca Shabad and Sally Bronston -

NBC News

The president, Joe Biden, will announce this Wednesday in Cleveland, Ohio, a plan to avoid cuts in the pensions of millions of workers due to the stock market crash due to a possible recession.

This measure, created with funds from the American Rescue Plan approved by Congress in 2021, responds to the record levels of inflation and the rise in interest rates by the Federal Reserve, which have induced a fall of more than 20% of the stock market, on which millions of private pensions depend.

According to the government, between two and three million workers and retirees may suffer cuts in their pensions due to investment losses, and with this plan they would obtain the benefits they should receive for their retirement, said a White House official.

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More than 200 "multi-employer" plans, which are created between companies and unions, "are on their way to becoming insolvent in the short term because their investments struggled during the economic crisis," the White House official said.

With the new initiative, he projects that these plans will remain solvent until 2051, "and many of them for much longer."

Biden signed into law the $1.9 billion American Bailout Plan in March 2021. The new initiative will contribute $97 billion to more than 250 underfunded retirement plans, according to the Pension Benefit Guaranty Corporation.

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The president will publicize his measures at a time when his popularity is at a minimum, during a speech at a Cleveland high school, accompanied by Secretary of Labor, Marty Walsh;

and other federal and local authorities.

Source: telemundo

All news articles on 2022-07-06

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