Long Overdue DOL Rule Will Protect Retirement Investors
Statement by AFL-CIO President Richard Trumka on final fiduciary ruling:
We applaud the Department of Labor for getting the fiduciary rule over the finish line after a long and thorough rule-making process that took into account a multitude of stakeholders’ interests. While politicians on both sides of the aisle acknowledge our retirement income crisis, very few are willing to do anything meaningful about it. With this rule, the Labor Department is putting a stop to business as usual. This means putting an end to the siphoning off of hard-earned retirement funds by salespeople masquerading as objective investment professionals.
We know that financial industry opponents of the rule will continue their efforts to prevent it from being enacted. The AFL-CIO will be watching to see how members of Congress respond to their entreaties. This rule is critical to promoting retirement security for working men and women. It means we will have more of our hard earned funds available for a secure and dignified retirement.
With the fiduciary rule finalized, the AFL-CIO urges the Administration to finish its work on the overtime rule that will bring working people closer to earning their rightfully earned overtime pay.
By Robert Roach, Jr.
IAM General Secretary-Treasurer
Americans are concerned about their retirement futures. And rightly so.
Multiemployer pension plans protected by the Pension Benefit Guarantee Corporation (PBGC) are under attack.
With the impending sunset of the multiemployer funding provisions of the Pension Protection Act of 2006 (PPA) in 2014—coupled with a declaration of war by right-wing conglomerates on working-class Americans—some in the pension community are advancing a proposal to significantly reduce pension benefits for current and future retirees.
Corporate America wants to go back on their promise of a secure retirement for their employees.
The proposed plan would allow employers to slash retirement benefits for existing retirees to 110 percent of the PBGC’s minimum of $1,027.50 per month. That works out to about $1,180 a month.
In other words, a worker planning on receiving a monthly benefit of $3,613 would be facing a 67 percent cut.
The bigger the pension, the bigger the drop in benefits.
For a 75-year-old retiree who has given a lifetime of work, the mere thought of losing that much in fixed income is unconscionable. Pensions are not gifts from employers. They are deferred wages employees have sacrificed based on an employer’s promise of a secure retirement.
In the IAM, and labor unions in general, we don’t give away pensions. We fight for pensions and pension security.
We oppose any proposal that cuts the hard-earned pension benefits of working and retired Americans. More draconian cuts to working families are not the solution to employers’ inability to run solvent plans.
We demand better protection for the 44 million workers who have placed their retirement incomes under the PBGC’s care. Like banking institutions, the PBGC should be considered too big to fail. Congress must see to it that the PBGC is properly funded.
Lawmakers must also create a program that will allow insolvent plans to merge with solvent ones, or smaller plans with larger ones, without risking the latters’ financial future and health.
We in the Machinists Union know the benefits of a well-run multiemployer plan. With assets of over $9.2 billion, the IAM National Pension Fund provides retirement security to over 80,000 retirees and beneficiaries. The Fund has more than 1,750 contributing employers and is the sixth largest multiemployer plan in the U.S.
When it comes to the IAM, our members—retired, current and future— expect the best. Nothing less.
The same goes for their retirement security. They deserve what they were promised—not a penny less.
We urge Congress’s support and immediate action in safeguarding the PBGC today.