The Biden administration unveiled details this week of final rules on the federal bailout of hundreds of pension plans approved as part of Democrats’ $1.9 trillion US Rescue Plan coronavirus relief package last year, saying it would secure the benefits of workers for the next decades. ARPA’s Special Financial Assistance Program funnels $90 billion in taxpayer funds to the federal government’s Pension Benefit Guaranty Corporation, which insures private-sector pensions. Before the supposed COVID package was passed, the PBGC was set to become insolvent in 2026. The White House claims the plan will prevent 2 to 3 million workers from having their pension payments cut in retirement, saving more than 200 private sector union plans that were at risk of insolvency. U.S. President Joe Biden speaks about the economy and the final rule implementing the American Rescue Plans, which protects multiemployer retirement plans, at Max S. Hayes High School in Cleveland, Ohio, July 6, 2022. (Photo by SAUL LOEB/AFP via Getty Images/Getty Images) President Biden touted the achievement during a speech in Ohio on Wednesday, saying that retirees in the shaky programs who have already seen benefit cuts “will be retroactively restored” and that it “turned a broken promise into a kept promise.” BIDEN PROVES TOXIC TO DEMOCRATS DURING OHIO TRIP, JIM JORDAN SAYS: ‘WHERE IS TIM RYAN?’ “We saw before the pandemic and the economic crisis that followed,” Biden said, “Millions of retirees were at risk of losing their retirement security through no fault of their own, based on the conditions and the relentless attacks on unions that were taking place.” However, some pension experts are skeptical of the plan and are raising concerns. One sticking point is that the rules have been changed to allow one-third of taxpayer-provided funds to be invested in stocks, which, according to the Wall Street Journal, “overrides a previous restriction that generally limited them to investment-grade bonds . “ NEW POLLS SHOW MAJORITY OF AMERICANS BELIEVE COUNTRY IS GOING IN WRONG DIRECTION In response to the plan, University of Pennsylvania Wharton School of Business Professor Dr. Olivia Mitchell, executive director of the school’s Pension Research Council, tweeted: “Leave me alone!” He called the move “dangerous” and said it was “unlikely” to keep multi-employer plans “solvent through 2051, despite the White House’s optimism.” U.S. President Joe Biden (L-R) greets U.S. Representatives Shontel Brown and Marcy Kaptur, U.S. Senator Sherrod Brown and Cleveland Mayor Justin Bibb upon arrival at Cleveland Hopkins International Airport in Cleveland, Ohio, July 6, 2022. (Photo by SAUL LOEB /AFP via Getty Images / Getty Images) Derek Kreifels, CEO of the State Financial Officers Foundation, noted that pension funds were in trouble long before the pandemic, arguing that the move was political and a gamble for both taxpayers and union members. “The White House is about to allow the same pension fund managers — who have historically been terrible at their jobs — the ability to make riskier investments not only with the pensions of working Americans, but with the nearly $100 billion in taxpayer dollars being handed over to unions under the guise of COVID relief,” Kreifels told FOX Business. HAMMER DEMO SENATE CANDIDATE PLAYS INFLATION, NOTES: ‘NO DIFFERENT THAN THE DEVIL WE’RE FIGHTING’ He added: “In reality, this is a disaster of the Biden administration’s own making, jeopardizing millions of Americans’ retirements with terrible economic policies that reverberate through every aspect of our lives — from gas pumps to grocery stores.” Ryan Frost, a policy analyst at the Reason Foundation’s Pension Integrity Project, says whether the bailout and its new rules will work is a “mixed bag.” People cheer as U.S. President Joe Biden talks about the economy and the final rule implementing the Special Financial Assistance program of the U.S. Rescue Plan in Cleveland, Ohio, July 6, 2022. (SAUL LOEB/AFP Photo via Getty Images/Getty Images) “Obviously it will work for these retirees as they will no longer face benefit cuts as the PBGC runs out of money, but there are zero safeguards to prevent the plans from running out of money again,” he said. “In fact, the bill even modifies the PBGC guarantee formula to increase the maximum potential benefits a retiree can receive.” Frost says the question is what the trade-off will be for the US taxpayer to bail out these private pensions. GET THE FOX BUSINESS ON THE GO BY CLICKING HERE “Plans will now be projected to reach 80% funded in 30 years, using some unknown discount rate that will vary between each plan,” he told FOX Business. “Congress needs to come back next year and put some safeguards and bonds around the plans that accept this money so they don’t fall further into insolvency, risking pension cuts and requiring another ‘financial assistance’ program to come in.” budget of 1.9 trillion dollars’.
