CNNFN writes article about Pensions may be cut to ‘nothing’ for 407,000:
by Katie Lobosco @KatieLobosco May 20, 2016: 2:03 PM ET
What happens when a pension fund runs out of money?
What happens when a pension fund runs out of money?
One of the biggest private pension funds in the country is almost out of
money, and fresh out of options.
The Central States Pension Fund has no new plan to avoid insolvency,
fund director Thomas Nyhan said this week. Without government funding,
the fund will run out of money in 10 years, he said.
At that time, pension benefits for about 407,000 people could be
reduced to “virtually nothing,” he told workers and retirees in a
letter sent Friday.
In a last-ditch effort, the Central States Pension Plan sought
government approval to partially reduce the pensions of 115,000
retirees and the future benefits for 155,000 current workers. The
proposed cuts were steep, as much as 60% for some, but it wasn’t
enough. Earlier this month, the Treasury Department rejected the
plan because it found that it would not actually head off insolvency.
The fund could submit a new plan, but decided this week that there’s no
other way to successfully save the fund and comply with the law. The
cuts needed would be too severe.
retirees
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