New York Pension Cuts? What's At Stake in Congress' Backroom Pension Deal

NEW YORK, Dec. 17, 2014 /PRNewswire-USNewswire/ -- A little known amendment in Congress could hold vast and dire consequences for New Yorkers receiving pensions. The Kline-Miller amendment to the Consolidated and Further Continuing Appropriations Act of 2015 is just wonky enough to be scary – and it is, allowing for first-ever cuts to vested pension benefits for over one-hundred thousand New Yorkers.  

AARP warns the cuts to multiemployer pension plans (generally, a pension plan covering a number of companies' retirees in a given industry) would be nothing short of a disaster, with some estimating the cuts could be as much as two-thirds of someone's lifetime benefits. 

"For many New Yorkers, their pensions and Social Security checks are all they've got, making for a very modest retirement income. Cuts to either hit the group hard," said Beth Finkel, State Director for AARP in New York State. "New York retirees don't deserve a bad backroom deal, cutting the very pensions they've worked their whole lives to earn. It's simply wrong and AARP opposes it."

The proposed pension cuts by the numbers in New York*:

• Number of multiemployer pension plans that could be affected: 59
• Number of New Yorker retirees impacted: 100,632
• Average annual pension benefit per month: $558 ($6965 per year)
  • After proposed cuts, plans could be reduced to: $186 a month ($2,322 a year)
• Annual multiemployer pension payments to New Yorkers: $673,707,568
  • After cuts: $224,569,189
• Average Social Security benefit in New York State: $1,298 a month ($15,580 per year)
• Combined Social Security and Pension retiree benefits could decrease from $22,545 to $17,902 a year.

*Multiemployer pension data is from the Partnership for Multiemployer Retirement Security: http://www.solutionsnotbailouts.com/map, based on cuts of an estimated two-thirds.

"This move is really a hit to New Yorkers already living on very modest incomes. In some cases, retirees in New York could see their combined Social Security and pension retirement income slashed by a total of up to 21 percent," added Finkel.

In a letter sent to Congress, AARP said "[this] proposal…impairs a fundamental tenet of pension law and permits multiemployer pension plans to cut the earned and vested pension benefits of current retirees. Making significant and far-reaching changes to pension law without scrutiny of the legislative proposal and with no opportunity for debate or amendment is unacceptable. This is all the more true given that the proposal may result in a significant reduction in the modest income of millions of retirees. We urge Congress to instead consider all possible alternatives, and to allow time for adequate debate that can produce a fair and reasonable solution to the funding challenges facing a handful of multiemployer plans."

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AARP is a nonprofit, nonpartisan organization, with a membership of more than 37 million, that helps people turn their goals and dreams into real possibilities, strengthens communities and fights for the issues that matter most to families such as healthcare, employment and income security, retirement planning, affordable utilities and protection from financial abuse. We advocate for individuals in the marketplace by selecting products and services of high quality and value to carry the AARP name as well as help our members obtain discounts on a wide range of products, travel, and services.  A trusted source for lifestyle tips, news and educational information, AARP produces AARP The Magazine, the world's largest circulation magazine; AARP Bulletin; www.aarp.org; AARP TV & Radio; AARP Books; and AARP en Español, a Spanish-language website addressing the interests and needs of Hispanics. AARP does not endorse candidates for public office or make contributions to political campaigns or candidates. AARP Foundation is an affiliated charity of AARP that is working to win back opportunity for struggling Americans 50+ by being a force for change on the most serious issues they face today: housing, hunger, income and isolation. AARP has staffed offices in all 50 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands. Learn more at www.aarp.org.

SOURCE AARP New York State

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