One of the nation’s largest multi-employer pension funds says it is out of ideas for ways to save itself from impending failure.

After the Treasury Department rejected its Hail Mary proposal, which would have substantially cut benefits for some retirees, the Central States Pension Fund has little choice but to turn to a federal insurance program that is supposed to offer a lifeline to troubled pension funds.

But there’s one major problem that program is expected to run out of money, too.

The Pension Benefit Guaranty Corp., which insures private pensions, is dealing with long-standing financial woes with the fund that protects multi-employer pension plans. The program was set up more than four decades ago to serve as a backstop for private-sector pension plans, but it has been relied on more than expected by large plans on unsteady financial footing.

The fund’s deterioration could pose a threat to the 10 million people in multi-employer plans who could soon be left without a safety net for their pensions. Although most of those workers and retirees are in plans that are financially healthy, about 1.5 million people including the Central States members are in plans that are projected to run out of cash over the next 20 years.

In the past few weeks, lawmakers, Central States officials and consumer advocates have called for a legislative solution that would shore up fragile pensions and the struggling insurance fund, which has roughly $2 billion in assets.

Previous efforts to bolster the insurance program have failed, or fallen short. For instance, a 2014 law that made it possible for multi-employer pension plans to cut benefits for retirees was meant to alleviate the burden on the PBGC. But now that the Treasury Department has rejected the Central States proposal, which was the first test under the law, the insurance agency is back where it started.

Over the past several years, multi-employer plans have faced financial challenges similar to those of the Central States fund, said Josh Gotbaum, former director of the Pension Benefit Guaranty Corp. and a guest scholar at the Brookings Institution. Two severe market downturns left the plan without enough money to pay expected benefits. At the same time, many companies went out of business, leaving the plan with a smaller number of employers available to pitch in and cover that shortfall.

With that shortfall in mind, many of the workers and retirees covered by the Central States plan are rallying behind a bill introduced by Democratic presidential candidate Sen. Bernie Sanders that would repeal the 2014 law that made it legal to cut pension benefits, and instead seeks government assistance for the PBGC. But fund executives and other pension experts are skeptical that any legislation calling for government help will gain traction. 2016 Global Data Point.

Source: Financial Services Monitor Worldwide