(WBEN) - After years of relentless advocacy, it was announced on Thursday by U.S. Senate Majority Leader Chuck Schumer and Congressman Brian Higgins (NY-26) that United Food and Commercial Workers (UFCW) Local One, with 19,000-plus members and their families across Buffalo, Syracuse, and Upstate New York, will receive $764 million pension-fix payout from the American Rescue Plan.
"SFA (Special Financial Assistance) provides funding to severely underfunded multi-employer pension plans and will ensure that millions of America's workers, retirees and their families receive the pension benefits they earned," said Gordon Hartogensis, Director of the Pension Benefit Guaranty Corporation (PBGC).
"This pension money that we're going to be receiving from the PBGC, this doesn't make our members wealthy. Our members aren't going to go out and buy homes or lavish vacations. This is obligations that were made that allows them to survive for the rest of their life or in their retirement years. This allows them to pay their bills, pay their mortgages and survive," added Frank DeRiso, President of UFCW Local One.
LISTEN LIVE TO WBEN:
Schumer and Higgins say this will ensure that UFCW Local One members and their families receive the hard-earned benefits they paid into their whole lives, but lost through no fault of their own. Both lawmakers said with these hard-earned pensions restored, UFCW members and their families can finally have the financial security they deserve.
According to PBGC, the plan was projected to become insolvent and run out of money come 2026. Without the SFA Program, the UFCW Local One plan would have been required to reduce participants’ benefits to the PBGC guarantee levels upon plan insolvency, which is roughly 15% below the benefits payable under the terms of the plan.
Schumer and Higgins explained that after the 2008 financial crash, many union workers in multi-employer pension plans were in danger of collapse due to out-of-control speculation on Wall Street. Multi-employer plans are created through agreements between employers and a union, with plans typically involving multiple employers in a single industry or related industries.
Countless families and workers faced the prospect of losing out on retirement savings – through no fault of their own. Senator Schumer fought to include the Butch Lewis Act in the American Rescue Plan – securing pension solvency in his very first major bill as majority leader, with Higgins, a member of the House Ways and Means Committee, helping to lead the effort in the House.
"This is not about J Street or K Street in Washington today. It's not about Wall Street in New York City today. It's not even about Main Street. It's about the neighborhood streets, where real people live and struggle every single day. And still, at the end of the day, they find a reason to believe. Today is a reason to believe," said Congressman Higgins.
"8,000-10,000 Western New York workers will benefit from this decision. There will be a $400 million economic impact on their lives, and the collective lives of Buffalonians."
Higgins says most of the workers from Western New York work for companies like Tops Friendly Markets, Wardynski Meats, they work for Sahlen's Hot Dogs.
Before the American Rescue Plan, over 200 multi-employer plans were on pace to become insolvent in the near term, risking benefits for millions of workers and their families. The law created the SFA program administered by the PBGC to protect benefits for millions of workers, reverse harsh pension cuts, and put existing plans on a path to solvency through 2051.
"As Frank has said very clearly, these folks aren't going to take these pension benefits and stock them away for a rainy day, they're going to be spending that, and it's going to create demand in the local economy. Where you have demand, you have growth, and that's the fundamentals for economic growth," Higgins said. "So the numbers of based on the settlement and the effective workers, it provides us with a $400 million economic impact."
More from Thursday's announcement is available in the player below: