In unprecedented move, pension plan cuts benefits promised to retirees
This could trigger other pension funds to follow suit before they run out of money.
A pension fund in Cleveland became the first plan to approve benefit cuts for current retirees — even though it is still years away from running out of cash. The move, some critics say, could open the door for other troubled pension plans to follow suit.
The financially strapped Iron Workers Local 17 Pension fund proposed a plan for extending its lifespan by reducing benefits for workers and retirees. Now that the plan has received final approval, roughly half of the 2,000 participants will see their pension benefits shrink on Feb. 1. Benefits will be cut by 20 percent on average, but some retirees are expecting their monthly payments to be slashed by as much as 60 percent.