Dec. 16, 2014  | AARP | Congress recently carved a hole in a 40-year-old pension law that has prevented employers from cutting benefits earned by those already retired. This change  applies to people covered under multiemployer plans that are in critical financial shape.

Here’s what you need to know:

What is a multiemployer plan? This is a pension covering workers and retirees from more than one employer in the same or related industry, such as trucking or construction. (Most of them were established under collective bargaining between a union and the employers.) There are about 1,400 multiemployer plans with 10.4 million participants. Most workers with traditional pensions are in a single-employer plan, meaning it covers workers from only one employer.

Why are lawmakers doing this? The federal Pension Benefit Guaranty Corp., which insures these pensions, says that some 10 percent of multiemployer plans – covering about 1.5 million people – are in such financial trouble that they are likely to become insolvent. PBGC estimated that its fund insuring multiemployer plans will likely run out of money in eight to 10 years unless changes are made. Some lawmakers argued that these distressed plans need the ability to cut retirees’ benefits so pensions can survive longer.

AARP and other consumer advocates argue that these pensions aren’t in immediate danger of insolvency so there is no need to rush this drastic measure without considering alternatives, such as scaling back on optional benefits in a plan or providing PBGC with greater funds and the authority to intervene earlier. Advocates also worry this move by lawmakers might someday open the door to similar pension cuts to other plans.

How do I know if my pension is in financial trouble? Under a 2006 pension law, plans are required to notify participants if they are significantly underfunded. The U.S. Department of Labor also posts a list online of plans whose status is considered “critical” or “endangered.”

Will everyone in a distressed plan experience cuts? It’s up to plan trustees to decide how much to cut benefits, though the legislation offers certain restrictions. For instance, benefits cannot be cut for retirees age 80 and older or those receiving a disability pension. And those under age 75 would see bigger cuts than retirees at ages 75 to 79, whose benefits could be slashed but not as much.

How big are the cuts? Some retirees could see their benefits cut by more than 60 percent. The Pension Rights Center, an advocacy group, provides an online calculator to figure any potential benefit loss under the legislation for those under age 75.

Do retirees or workers get any say in these cuts? Participants will get to vote on any proposed pension cuts. Yet as the Pension Rights Center points out, this right is “illusory.” A majority of all participants – all employees and retirees, not just those voting – must reject the cuts, the group says. And ballots can be sent via email, a hurdle for those without Internet access. Yet even if participants overwhelmingly reject cuts, their vote can be simply set aside if the troubled plan may jeopardize the financial health of the PBGC, the group says.

When will this take effect? The pension provisions take effect beginning in 2015.