By July 6, the Automotive Industries (AI) Trust Fund will receive word that the Pension Benefit Guaranty Corporation (PBGC) will provide more than $1 billion in needed funding to make the AI pension plan whole for at least the next 30 years. That means that members who have paid into that plan and were expecting a full pension will be able to count on receiving it.
There’s no denying that the AI plan was in trouble. And it wasn’t alone. As many as 114 multiemployer pension plans covering nearly 1.3 million workers were severely underfunded and headed toward failure within the next 20 years. The largest of these was the Teamsters’ Central States plan, which had the most unfunded liabilities at nearly $35 billion.
What precipitated this looming disaster for so many people who had worked all their careers, often taking lower wage increases to bolster their pension contributions? At the close of the 1990s, the majority of multiemployer plans reported assets exceeding 90 percent of total liabilities.