I spoke to someone last night who alluded to this soon to be proposed legislation, but didn't describe it in the detail you did.
Thanks for sharing.
One question, what does "This gives the Funds the ability to re adjust their payout procedure" mean???
Is this another way of saying reduce payouts to retirees?
I guess in theory they could but my best guess is that they would give less for every benefit year or change formulas that give the Funds the chance to thrive. For example: some Funds say that if you reach a number of hours, you are entitled to the same rate as everyone else that reached that number but worked numerous hours more. Other Funds give a rate on a formula for the hours you do every year.
My best guess is that the retirees would remain the same or slightly less. It would most likely be a different formula for future retirees. The balloon payment wouldn't be due until 20 or 30 years down the line so most of the retirees now would not be around at that time or have limited time to collect.
If you are paying a 1/4% interest per year on a huge loan but making 3%-5% on investments from the other money, it gives you a chance to catchup. This is based on limited rather than high risk loans. The Funds are in high risk areas now to try to stay afloat.
It is how many of the Credit Unions survived a while back but there is nothing on paper yet so I'll wait for the details.
Our Union is very interested but there are whole industries that are in worse shape. Mining, manufactoring, etc are even worse than us along with some Private Company pensions that both sides of the aisle are trying to protect so the system doesn't crash. The Credit Unions would have crashed FDIC had they failed and pension plans have a similar government agency responsible for covering lost funds.
