A pension should provide for you in old age, but there is no guarantee a pension will be there- even if one is promised to you. Recent events show the risks of depending upon any outside sources of income during retirement, including pension benefits. If you want to make sure you have the money you need to have enough cash to enjoy your golden years, it is up to you to save money in your own accounts where you have control over what happens to it.
A Loveland, Ohio retirement planning lawyer can provide assistance to people who want to put aside money for a secure retirement. The Zimmer Law Firm will help you to define goals and identify strategic options for investing to reduce taxes and maximize gains.
Retirement Planning is Essential As Pension Plans May Not Fulfill Promises
Pension plans used to be the norm offered by private companies, as well as by the state and federal government. While today it is rare for workers in the private sector to be offered a defined benefit pension plan, there are still hundreds of thousands of workers who have pensions that were promised to them by employers in the past. The problem is, both private employers and state governments are struggling to come up with the cash to pay out promised pension benefits.
In 2014, Congress passed the Kline-Miller Multiemployer Pension Reform Act of 2014 to address situations where a pension plan was about to run out of money. The Act provided rules for reforms to multi-employer plans, which are plans created through agreements between multiple employers and one or more unions. The employers who are part of the plan are usually all within the same industry, such as construction or hospitality. The plans are usually run by a board of trustees and many of them are facing significant risk of being unable to fulflill promises made to retirees.
The Multiemployer Pension Reform Act allows for these multi-employer plans to propose either a temporary or a permanent reduction of pension benefits if the plan is considered to be in “critical and declining status.” Plans which are expected to run out of money in less than 15 or 20 years, depending upon the circumstances, can seek a reduction in pension payouts.
To propose a reduction, trustees of the plan have to submit an application to the Treasury Department and must demonstrate that the reduced benefits are necessary to stop the plan from running out of money. Beneficiaries receiving money and participants in the plan will be provided notice of the request to reduce benefits. The Treasury Department, the Pension Benefit Guaranty Corporation and the Department of Labor will review the request to reduce benefits to determine if the pension’s reduction plan should be approved or not.
Unfortunately, there are people in Ohio who are currently facing pension cuts as a result of proposed reforms to their pension plan. The Highland County Press reported on their situation and on efforts being made by U.S. Senator Rob Portman to try to protect the pensioners from losing benefits.
There are currently 48,000 Ohioans whose pensions are at risk of being cut, despite the pensioners having no real say in the process. U.S. Senator Rob Portman has introduced a Pension Accountability Act and is urging the senate to take it up to try to protect these and other pensioners whose multi-employer pensions are subject to a modification due to the threat of bankruptcy.
Portman’s proposed act would give workers a seat at the table by allowing them to have a binding vote on a proposed reform plan for a pension that was in trouble. While plan participants and retirees can currently vote on a proposed reform, their vote isn’t binding under the existing rules. Portman’s plan would require a majority vote for pension reforms to occur. The vote would also count only ballots that were actually returned. Under the current system, any ballots which are not returned are counted as yes votes.
Portman was quoted as saying: “If there were hundreds of thousands of Social Security beneficiaries getting their retirement benefits cut by as much as 70 percent there would be a national outrage.” He believes the teamsters who are currently facing significant benefit cuts deserve to receive the benefits that were promised to them.
Getting Help from a Loveland Retirement Planning Lawyer
The Zimmer Law Firm is here and ready to help you make a plan to save enough money for retirement that you won’t be dependent upon a third party pension for your living. Give us a call at 513.721.1513, or join us for a free seminar to find out more about how we can help you.