Central States Fund Falls to $12.3 Billion -- Senate Action Needed

The 2019 Financial Report of the Central States Pension Fund shows that fund assets dropped to $12.3 billion, as retirement payouts far outstrip the income from employers remaining in the fund. The net loss on the year was $857 million, and the Fund continues to predict insolvency in 2025, unless action comes soon.

central__01thumb.jpgCongressional action is more urgent than ever, but so far the US Senate has refused to pass a bill to protect earned pensions. The National United Committee to Project Pensions – the Teamster retiree movement – continues to lobby and build support for Congressional action to protect the earned pensions of all workers. 

The Central States Financial and Analytical Report and the Independent Special Counsel Report tell the tale: the fund is down to $12.3 billion.  There are 198,670 retirees and surviving spouses drawing pensions, and only 48,987 active Teamster participants. 

The average pension paid is $1281 per month. 

As assets dwindle, the returns on investments decline. The Fund could not take advantage of the run-up of the stock market in 2019, because the Fund has moved most assets out of stocks, to protect the dwindling assets from a market downturn. The fund has 11% of assets in stocks and 88% in bonds. The fund earned $1.28 billion on investments in 2019, which mitigated the net loss. 

The Independent Special Counsel report covers a number of subjects, mostly repeated from past quarterly reports. One noteworthy report: the trustees agreed to allow YRC to freeze its pension payments to the fund at $106.55 per week ($2.65 per hour) until March 31, 2024. YRC argued that a freeze was needed because of the of continued weak condition of the company.

The Central States Health and Welfare Fund (TeamCare) financial report reflects the very different situation with the H&W fund. The fund continues to grow in numbers and in assets.

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