Cement Workers’, Teamsters’ Pensions Receive Additional PBGC Funding

Last week, the Pension Benefit Guaranty Corporation provided supplemental assistance to four struggling pension plans through the Special Financial Assistance Program.

On Thursday, the PBGC provided a supplemental $438 million to the Syracuse, New York-based New York State Teamsters Conference Plan. In November 2022, the plan had been given $963.4 million. The plan covers 33,643 participants and became insolvent in October 2017, when it had to cut benefits by approximately 20%.

On Friday, the PBGC provided supplemental assistance to three smaller plans.

The first was the Teamsters Local 52 Plan, based in Valley View, Ohio, which covers 769 participants. The plan received $12.5 million on top of the $84.9 million it received in November 2022. The plan was projected to become insolvent this year. Senator Sherrod Brown, D-Ohio, who initially sponsored the legislation that became the SFA Program, said in a press release that the plan would have faced cuts of between 50% and 60% absent a bailout.

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The PBGC also provided $16,800 to the Cement Masons Local 783 Pension Plan, based in Houston with 51 participants. The plan had previously received $4.5 million in April 2022 and had been insolvent since November 2016, when it cut benefits by 20%.

Lastly, the PBGC gave $47,100 to Cement Masons Local 681 Pension Plan, another cement workers’ plan from Houston, with 196 participants. The plan had previously received $16.1 million in April 2022. The plan became insolvent in August 2016, when it cut benefits by 15%.

The Special Financial Assistance provision of the American Rescue Plan Act allows for PBGC funding for severely underfunded multiemployer pension plans. Funds that receive assistance must monitor the interest resulting from the grant money as separate from other sources of funding. The PBGC requires that at least two-thirds of the money it provides be invested in “high-quality fixed income investments.”

The Final Rule on SFA, issued in July 2022, states that the other third can be invested in “return-seeking investments,” such as stocks and stock funds. The Final Rule also modified the formula for calculating assistance payments. Plans which applied under the interim rule can reapply for the assistance they would have received under the Final Rule.

Tags: American Rescue Plan Act, PBGC, SFA, Teamsters

The dollar is in one of its periodic slumps, and talk has been rife that the greenback’s day as the world’s dominant currency is done. Europe, China, Russia and India have talked about finding some alternative. CNN commentator Fareed Zakaria warned recently on his program that the dollar faces “a death by a thousand cuts” that could bring a “reckoning” for the U.S. economy.

Not so fast, says Ian Bremmer, president of the Eurasia Group, a research and consulting firm. In a commentary, Bremmer argued that “rumors of the dollar’s death are greatly exaggerated.”

He pointed to the buck’s continued dominance. While admitting that this lofty status has diminished somewhat this century, as other economies have risen, the dollar’s ubiquity continues—and it remains by far the most “widely used for funding, pricing, trade invoicing and settlement, cross-border borrowing and lending even when the U.S. is not involved.”

To be sure, the dollar has been waning since September 2022, off 10%, as fears of a U.S. recession—and thus a reversal of the Federal Reserve’s campaign to raise interest rates—began to worry global investors. The U.S. currency took another leg down over the past month amid anxiety over the nation’s banking system.

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Bremmer noted that other denominations have ruled in the past and then withered. A key example: the British pound in the 1800s. However, “when the pound lost its status, there was another currency on the sidelines ready to take its place,” he wrote: the dollar. “Today, there is no such challenger.” To Bremmer, the European Union is too fragmented for the euro to supplant the dollar, and the Chinese yuan suffers from China’s lack of openness and investor protections.

As the world’s biggest economy during the past century, with the largest and most open capital markets, the U.S. has a powerful advantage, Bremmer declared. Although the dollar’s share of central banks’ $12 trillion foreign exchange reserves has certainly waned since 1999, it is still nearly twice that of the euro, yuan, pound and Japanese yen combined, Bremmer indicated.

Of course, dollar dominance has downsides, Bremmer acknowledged. It makes U.S. exports more expensive and hobbles American competitiveness. Also, it feeds Washington’s reliance on debt, which has ballooned in recent decades.

“Without a viable challenger, it’s very unlikely that the dollar will lose its special role anytime soon—for better or worse,” Bremmer contended. “You can’t replace something with nothing.”