Central States Financial Update

The Central States Pension Fund ended the second quarter on June 30, 2016, with $15.6 billion in assets, down $500 million since the start of the year, according to the Financial and Analytical Report obtained and reviewed by Teamsters for a Democratic Union (TDU).

financial_report_2_thumb.jpg

The fund is on a downward trajectory primarily due to the disastrous ratio of 59,234 active participants, while paying benefits to 204,115 retirees and surviving spouses. This means the fund must pay out $2.8 billion in benefits in 2016, with expected income from employer contributions of $754 million. Thus the fund must earn $2.0 billion from investments to break even, which represents a 13% return on investment.

The Second Quarter Independent Special Counsel Report acknowledges the problem, but in 16 pages it has one (1) sentence mentioning the work being done to find a solution: “The Trustees have also resolved to continue to cooperate with Congress, regulatory agencies, unions, employers and private parties and organizations to search for a solution…” 

This is not true. The fund has done little or nothing to cooperate with rank and file Teamsters, the AARP, the Pension Rights Center, TDU, other unions, and the Teamsters. Instead of joining the battle to save Teamster pensions, the fund Trustees and Director Thomas Nyhan sit on the sidelines.

The report also notes that –

  • The Government Accounting Office (GAO) is auditing the Fund at the request of Senator Charles Grassley and other Representatives, and “it is not known when these reports will be completed.” The rank and file Pension Protection Movement caused this audit to take place.
  • Gary Dunham, the secretary treasurer of Cedar Rapids Iowa Local 238 was confirmed as a union trustee, replacing Bill Lichtenwald, who was charged by the IRB for corruption in the Ohio Conference of Teamsters. Dunham’s appointment by the union was approved by the US Department of Labor. So far, Dunham has refused to meet with members and pension protection activists. UPS Vice President Christopher Langan was re-appointed as an employer trustee of the Health and Welfare Fund only, and Ronald DeStefano was re-appointed an employer trustee of the Pension Fund only.
  • Investment returns for the 2nd quarter were 2.2%, slightly above average for comparable pension funds.
  • The fund will continue to fight the move by Kroger to exit the pension fund, including the lawsuit against the fund which Kroger is behind.

The Health and Welfare Fund Financial Report shows a completely different picture: the assets continue to grow every month. The H&W Fund has 190,468 active participants and 8,887 retiree participants.

Get Advice Join TDU Donate

Recent News

Hoffa Announces Retirement, Taps Steve Vairma to Head Successor Slate

James P. Hoffa announced today that he will not be seeking re-election in the 2021, in a memo to Teamster officers, locals and staff.

Just hours later, Steve Vairma announced his candidacy for Teamster President. Vairma is the Secretary Treasurer of Denver Local 455, the President of Joint Council 3, an IBT vice president and the director of the IBT Warehouse Division. 

Hoffa Announces His Retirement

James P. Hoffa announced today that he will not be seeking re-election in the 2021, in a memo to Teamster officers, locals and staff, and will retire at the end of his current term.

View More News Posts