Tag: American Rescue Plan Act of 2021

What Is The Pension Provision In The Stimulus Package?: An Explainer

Mary Pat Campbell

Link: https://www.forbes.com/sites/teresaghilarducci/2021/03/15/what-is-the-pension-provision-in-the-stimulus-package-an-explainer/?sh=411b24f957d1

Excerpt:

The multiemployer pension crisis was not caused by poor decisions by the pension funds. Factors out of their control: recessions, government decisions, industry deregulation (trucking for example) and quirks in the pension regulation law, ERISA are responsible. Some, including the New York Times blame the pension actuaries for high rates of return assumptions, but for most of their existence, the plans were much more conservatively run than high-flying single corporate plans.

Because of deregulation, bankruptcies of major carriers, and the 8-year policy of the George W. Bush administration to avoid contracting with union carriers, the Central States pension fund did not have enough money to pay Jack. The 2007 financial crash, caused by inadequate government regulation, and the Pandemic recession, further accelerated the expenses in Jack’s pension fund, one of the largest multiemployer plans.

Government regulation also did not move fast enough. Unlike single employer plans where ERISA encourages the PBGC to step in and take over the plans before the sponsors end up in bankruptcy there is no pre-crises help from the government agency, the PBGC, for multiemployer plans. Not acting quickly the aid needed soared. If the aid came 12 years ago the expense would have been much smaller about $10 billion.

Author(s): Teresa Ghilarducci

Publication Date: 15 March 2021

Publication Site: Forbes

American Rescue Plan Act of 2021 (4) 9704

Mary Pat Campbell
American Rescue Plan Act of 2021 (4) 9704

Graphic:

Excerpt:

Going through the text of the stimulus bill, section 9704 is the meat of the bailout but those 10 pages might be a little hard going so I have added my emphasis.

What struck me on initial reading is that there does not seem to be any cap on those one-time lump sum assistance payments and applicants may be able to value future benefits too. That is, a union with the foresight to sponsor a pension that is almost broke could entice employers to enter their union with the offer of providing their employees with a good pension at a cost that taxpayers will subsidize. Sounds too stupid to be real except if the law were entirely drafted by lawyers for the unions.

Author(s): John Bury

Publication Date: 15 March 2021

Publication Site: Burypensions

Wisconsin Teamsters happy with pension funds in virus bill

Mary Pat Campbell
Wisconsin Teamsters happy with pension funds in virus bill

Excerpt:

Thousands of Wisconsin Teamsters are celebrating after President Joe Biden signed the coronavirus relief bill into law.

That’s because the move ensures that the workers no longer have to worry about their pensions being cut in half.

The American Rescue Plan includes the Butch Lewis Emergency Pension Plan Relief Act of 2021. The act directs the Pension Guaranty Benefit Corp. to allocate billions of dollars to avoid the drastic cuts.

Author(s): Associated Press

Publication Date: 14 March 2021

Publication Site: KBJR6

How The American Rescue Plan Act Will Help More Than A Million Retirees And Workers

Mary Pat Campbell

Link: https://www.forbes.com/sites/nextavenue/2021/03/12/how-the-american-rescue-plan-act-will-help-more-than-a-million-retirees-and-workers/

Excerpt:

Good news on the retirement-income front. Some 1.5 million workers and retirees faced the real risk that their pension incomes would be slashed over the next 20 years or significantly sooner. But the American Rescue Plan Act just signed by President Joe Biden will prevent that from happening.

That’s because the massive legislative package includes the Butch Lewis Emergency Pension Plan Relief Act of 2021. It restores to financial health more than 100 failing pension plans known as multiemployer plans (they covered more than one company’s employees) for union workers. Most notably, the Teamster’s storied Central States, Southeast & Southwest CSWC +0.3% pension, covering some 400,000 workers and their families.

Author(s): Next Avenue

Publication Date: 12 March 2021

Publication Site: Forbes

Near-Junk Illinois Set to Sell Bonds With Stimulus as ‘Tailwind’

Mary Pat Campbell

Link: https://www.msn.com/en-us/money/markets/near-junk-illinois-set-to-sell-bonds-with-stimulus-as-e2-80-98tailwind-e2-80-99/

Excerpt:

Illinois plans to tap the municipal-bond market next week, just days after passage of President Joe Biden’s $1.9 trillion stimulus plan promises to help the lowest-rated state with some near-term financial stress.

The state is expected to sell $1.26 billion tax-exempt bonds on March 17. That follows S&P Global Ratings’s decision to pull Illinois back from the brink of a junk rating by lifting the outlook on the state’s BBB- rating to stable from negative on Tuesday, citing more federal aid and the start of an economic recovery. The proceeds from the sale will be for capital projects, accelerated pension payments and refunding.

Author(s): Shruti Date Singh

Publication Date: 10 March 2021

Publication Site: MSN (Bloomberg)

State Revenue Is ‘Virtually Flat.’ Local Government Revenue Is Up Slightly. Congress Wants To Give Them $350 Billion Anyway.

Mary Pat Campbell
State Revenue Is ‘Virtually Flat.’ Local Government Revenue Is Up Slightly. Congress Wants To Give Them $350 Billion Anyway.

Excerpt:

Indeed, an analysis from the National Taxpayers Union’s Andrew Lautz has found that when accounting for states’ rainy day funds and steady revenues, only about $6 to $16 billion (not the proposed $195 billion) would be needed to make those governments whole.

Lautz also argues it’s inappropriate to divvy up money to states based only on their number of unemployed residents, given that the jobless are already receiving targeted benefits and that those benefits are themselves helping to prop up states’ tax revenues.

“Individuals who want a job and don’t have one are certainly struggling right now, but the [$900 billion] December bill and the proposed COVID-19 relief package support them with a $300 or $400 per week boost to their regular unemployment benefits,” writes Lautz. “The $600-per-week benefit from the CARES Act helped prevent major state revenue dropoffs in part because it allowed unemployed people to continue spending at rates similar to before they lost their jobs.”

Author(s): CHRISTIAN BRITSCHGI

Publication Date: 8 March 2021

Publication Site: Reason

The American Rescue Plan Act Greatly Expands Benefits through the Tax Code in 2021

Mary Pat Campbell
The American Rescue Plan Act Greatly Expands Benefits through the Tax Code in 2021

Graphic:

Excerpt:

The United States has provided about $6 trillion in total economic relief to the American people during the coronavirus pandemic, including the $1.9 trillion that was approved when President Biden signed the American Rescue Plan (ARP) Act into law on Thursday, amounting to about 27 percent of gross domestic product (GDP).  Much of the economic relief in the American Rescue Plan is administered through the tax code in the form of direct payments (stimulus checks) and expanded Child Tax Credit (CTC) in 2021. The size and method of relief will revive debates over the proper role of spending in the tax code and whether the temporary benefits should become permanent after the economy has recovered.

Policymakers will need to determine if the tax code is the proper vehicle to disburse such cash benefits and if the IRS can handle the additional responsibilities. Over the course of many years, the IRS has been tasked with an ever-growing list of administrative duties that go well beyond simple revenue collection—everything from poverty alleviation to education, housing, and health-care benefits. The American Rescue Plan, in addition to other pandemic response measures, would now require the IRS to administer additional benefits on a recurring monthly basis, much as a traditional spending agency, all while processing upwards of 160 million tax returns.

Author(s): Erica York, Garrett Watson

Publication Date: 12 March 2021

Publication Site: Tax Foundation

American Rescue Plan Act of 2021 (3) 9703 + Miscellany

Mary Pat Campbell
American Rescue Plan Act of 2021 (3) 9703 + Miscellany

Excerpt:

Going through the text of the stimulus bill, section 9703 continues allowing those who run multiemployer plans and their actuaries to make up their own rules as long as such calculations do not overly embarrass the regulators and they do not sneak in any benefit increases.

Author(s): John Bury

Publication Date: 14 March 2021

Publication Site: burypensions

American Rescue Plan Act of 2021 (2) 9702

Mary Pat Campbell
American Rescue Plan Act of 2021 (2) 9702

Excerpt:

Going through the text of the stimulus bill we come to section 9702 which says that for multiemployer plans self-designated as being in Critical and Endangered status, who had to come up with a plan to dig out, will have their funding improvement or rehabilitation period extended by 5 years.

I wonder if any of these funding improvement plans filed before ARPA included a line like:

Waiting for union-controlled democrats to take over the federal government so 100% of all unfunded liabilities get covered by taxpayers.

Author(s): John Bury

Publication Date: 12 March 2021

Publication Site: burypensions

American Rescue Plan Act of 2021 (1) 9701

Mary Pat Campbell
American Rescue Plan Act of 2021 (1) 9701

Excerpt:

We start with a provision that keeps multiemployer plans who did not have the foresight to designate their plans in bad shape from rushing for the increments.

Option number one for getting the bailout money is to have a multiemployer plan in Critical and Declining status. To avoid having 1,400 plans in Critical and Declining status all at once this provision seems to freeze a plan’s status to what was claimed for the plan year that began on or after March 1, 2019.

Here is the wording. Tell me if you see anything different.

Author(s): John Bury

Publication Date: 11 March 2021

Publication Site: Burypensions

COVID rescue package gives failing pension plans a $86 billion bailout, stirring hope and criticisms

Mary Pat Campbell

Link: https://www.bostonglobe.com/2021/03/13/nation/covid-rescue-package-gives-failing-pension-plans-86-billion-bailout-stirring-hope-criticisms/

Excerpt:

In the shadow of stimulus checks and extra unemployment aid, Democratic lawmakers extended another hand in the $1.9 trillion pandemic relief package: a long-sought bailout for failing private pension plans.

The union-backed provision, touted for years by Representative Richard E. Neal, was signed into law Thursday by President Biden as part of the larger COVID-19 stimulus bill. It promises to set aside an estimated $86 billion — and some say possibly far more — in grants for multi-employer retirement plans that were careening toward insolvency even before the pandemic hit.

Without it, the multi-employer pension plans for more than a million truckers, warehouse and retail workers, and others could collapse, unions and congressional Democrats warn. In New England alone, the measure could help preserve the promised retirements of at least 70,000 Teamster members, union officials said.

Author(s): Matt Stout

Publication Date: 13 March 2021

Publication Site: Boston Globe

Schumer spokesman: Federal pandemic relief eliminates NYS deficit

Mary Pat Campbell

Link: https://nypost.com/2021/03/08/schumer-federal-pandemic-relief-eliminates-nys-deficit/

Excerpt:

The American Rescue Plan provides state government coffers with $12.6 billion in unrestricted aid, a measure championed by Schumer, the New York senior senator. The measure passed the Senate in a 50-49 vote and is expected to clear the Democratic-led House of Representatives on Tuesday and delivered to President Biden for approval.

Asked if the geyser of pandemic relief eliminates the needs for tax hikes or spending cuts, Roefaro told The Post, “the statement speaks for itself.”

Roefaro continued, “How NY decides its budgetary policy is a matter for the state legislature and the administration. Our job was to deliver resources to help NY confront and overcome Covid and it’s impacts, including the fiscal impact. And we did that fully and completely.”

Author(s): Carl Campanile, Bernadette Hogan

Publication Date: 8 March 2021

Publication Site: NY Post