(CN) — Surrounded by employees at a union trading center in Cleveland, President Joe Biden highlighted a new policy that he boasts will protect an estimated 2 to 3 million union workers and retirees from pension cuts.
Some 200 retirement plans between companies and unions, known as multiemployer funds, were on track to run out of money due to investment losses, but the White House says they now stand to remain funded until at least 2051. This is all thanks to a new rule adopted last spring as part of the $1.9 trillion American Rescue Plan and given force Wednesday. The pandemic-era bill included a program allowing pension plans in need of financial support to apply for federal aid from the Pension Benefit Guaranty Corporation, the organization in charge of insuring the pensions.
Biden's announcement expands how plans can invest the federal money they receive, a move that the White House says will increase the plans' return on investment and keep retirement funds solvent.
Pension plans will now be able to invest a larger portion of the federal aid, up to one-third, in stocks, and the private-sector insurer responsible for backing the plans will use a new formula to distribute aid.
"We've seen the risk millions of workers face as they watch their hard-earned pensions turn into broken promises. We saw it before the pandemic and the economic crisis that followed. Millions of retirees were at risk of losing their retirement security through no fault of their own based on conditions and unrelenting attacks on unions that were taking place," Biden said.
"We've turned a promise broken into a promise kept," he added.
Congress allowed cutbacks on worker and retiree benefits when it passed the Multiemployer Pension Reform Act back in 2014, a move meant to keep pensions funded amid mounting concerns that multiemployer funds could soon run dry.
Bill DeVito, a former member of the Iron Workers Local 17 in Ohio, spoke at Biden's rally Wednesday about how he retired in 2012 and saw watched his benefits diminish as the union's pension fund tried to stay afloat.
“No one expected the cuts to be 20 to 40%. This was devastating. Anybody that was married, with kids trying to help pay for college, retirement dreams were gone," DeVito told the crowd in Cleveland.
Through the Biden administration program, 80,000 workers who had benefits cut will experience full benefits, according to the White House.
"For folks at home, imagine losing 50 or 60% of that pension through absolutely no fault of your own. Imagine what it does financially and emotionally. Imagine what it does to your dignity," Biden said.
Biden's visit to Ohio comes as inflation sits at a 40-year high and the president grapples with tanking approval ratings among the American populous despite a low unemployment rate and steady job growth.
Trump carried Ohio in the last two presidential elections, and Biden has dedicated several trips to the state during his first term in office, focusing heavily on attracting momentum among blue-collar workers.
Democrats are hoping to flip a Senate seat in Ohio, with every battleground state critical to their attempts to hold on to a majority in Congress come November.
The president has long branded himself an ally of unions, regularly visiting labor unions during his time outside Washington and pushing for greater union membership, which currently sits at 10.3% of U.S. workers.
“I campaigned to restore the backbone of this country, the middle class and unions because I know this — the middle class built America and unions built the middle class," Biden said to the crowd of union workers.
Read the Top 8
Sign up for the Top 8, a roundup of the day's top stories delivered directly to your inbox Monday through Friday.