Central States Pension Report: 3rd Quarter 2015

The third quarter financial report of the Central States Pension Fund shows assets dropped to $15.9 billion, due in large part to the stock market decline last August. 


The fund’s financial and analytical report indicates that there were 61,119 active participants as of August 2015, and 205,870 retirees. The number of retirees continues to decline from a peak of 212,000.

The quarterly Independent Special Counsel report states that the fund lost 5.75% on its total portfolio in the quarter, due to the declines in both the stock and bond markets. The fund should have made up some ground in the fourth quarter, when the US stock market gained 7% (based on the S&P 500 index). That year-end financial report is not yet available.

The Independent Special Counsel quarterly report unfortunately reads like a PR piece for Central States management and the IBT. For example, the report on Bill Lichtenwald’s departure from the Board of the Trustees makes zero mention of the Independent Review Board’s devastating report on Lichtenwald’s role in corruption in the Conference of Teamsters, or that the Department of Labor asked for his removal. You are left to believe that Lichtenwald, who was only recently appointed to the Board, simply stepped off for a rest.

The report also whitewashes the “rescue plan” which would result in disastrous pension cuts. Indeed, it goes on about the lucky participants who will not be cut at all – those over 80, those with less than 5 years in the fund (so unvested), and those only eligible for a disability pension.  The report fails to make any mention at all of the huge outpouring of opposition from retirees and Teamsters, as seen by Special Master Ken Feinberg at the town hall meetings he has conducted. 

Showing 14 reactions

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  • Stephanie McAllister
    followed this page 2016-10-31 15:11:21 -0400
  • Tom Dolyniuk
    commented 2016-02-17 23:58:38 -0500
    To reiterate, the fund was set up like a Ponzi scheme, where active participants are to pay for the retirees!! But the deregulation of the trucking industry, hurt this. To put it another way, some retirees were given to good of a deal relative to what they contributed, and the fund was relying on actives to make up the difference. The Ponzi scheme will work as long as the number of active participants keeps increasing, but it diminished instead. 61k actives…205k retirees!! If the retirees were given a more reasonable amount like 1%-1.5% of their total lifetime contributions/month , then if would NOT matter how many active participants that there were!! There should be NO questions about this!!!
  • Tom Dolyniuk
    commented 2016-02-17 23:46:51 -0500
    The following information was taken from the Rescue plan website roughly in Set. 2015 . CSPF’s average annualized returns since 1980 is 10.8% which is in line with returns of other comparably sized funds. Over the last 10 years the investment returns have averaged 7.1% with is above the 6.9% average for funds of similar size. The reason that the fund keeps going down is because 2.9 billion is taken out every year and only .7 billion is put in. I hope this clarifies things for you , Tim. NOT bad investing!!
  • sean langley
    commented 2016-02-16 22:54:48 -0500
    Still doesn’t answer my question.
  • David Gill
    commented 2016-02-16 18:42:48 -0500
    union pensions,,many collecting,, very few paying in,,, sound familiar ( SS ) THERE BOTH GOING BROKE ! it doesn’t matter what pension fund your in . cuts will be coming to all someday. C.Y.A.,,,go to a job that has a 401k
  • Anthony Guercio
    commented 2016-02-16 14:53:43 -0500
    Sean, I worked at Central States from late 75 to late 89. I got 13 vested years in as many of our brothers and sisters have also. The fund ran well during the “corrupt” years and starting having problems when the deregulation came in and the DOJ took over and we all had to sign consent decrees to answer any questions from the government. From that time on nothing was done without the government giving the OK. Like I said, i left there in 89 so since then I don’t know what has changed. I can hope that they will recover as I am retiring next year and would not mind my small monthly benefit which will be really just pocket change for the month for me. Or as it is really known as my casino mad money.
  • sean langley
    commented 2016-02-16 13:35:42 -0500
    No matter who or what you want to blame 100% of the blame should be on central states! Actuaries should have saw all of the problems created years ago and corrected the situation! Over the last thirty plus years the fund has been in trouble and the whole time it was in trouble it was being sold to us with promises. Promises that they and union officials made that shouldn’t have been! So now we are paying 300 plus a week into a retirement plan that broke there contract!!! We can’t get out and move on because the company’s can’t afford the unfunded liability! congress protected central states from being sued so they should be prosecuted!
    I guess my statement is we as teamsters of are local are basically being forced to pay 300 dollars a week into a pension fund bomb fire that we can’t get out of and wont receive any of when we retire! So what do we do and what are the options?
  • Tim Vermillion
    commented 2016-02-15 15:49:38 -0500
    Tom, when the fund was at 26.billion then dropped 8.8 billion and the market hit a low of 8000 points in 2008 and then over the next seven years the market saw it’s best years and even hit an all time high of 19000 points and the fund only bounce back and forth of around 1 billion. Also, from that point the fund has managed to pay retirees over the next 7 years without dropping 2 billion per year…If the fund made 10.8% of the last 20 years it would have recovered more then what it has now 16 billion…….I’m invested in the market and have made back my money since the crash of 2008!!!! In 2008 was the moment the Central States Fund found itself in crisis. That year, the fund’s portfolio dropped by more than 29 percent — a bigger decline than the median large pension fund, and one that effectively converted a stable system into one on the brink of insolvency. In total, the fund lost more than $8.8 billion during the 2008 financial crisis.

    The decline was fueled by huge losses in the assets managed by the financial industry at the center of that crisis. For example, the holdings managed by Goldman Sachs and Northern Trust lost more than a third of their value. Had the accounts controlled by Goldman Sachs and Northern Trust delivered returns similar to the median for large pension plans from 2008 to 2012, there would be at least $500 million more in the system.

    From 2009 to 2013, Goldman Sachs and Northern Trust collected over $31 million in fees from the fund. In all, the fund paid more than a quarter-billion dollars in fees during that period. At the same time, firms like Goldman Sachs and Northern Trust have delivered investment returns that dragged down the fund’s performance. Bad Investments…….
  • Tom Dolyniuk
    commented 2016-02-15 13:37:39 -0500
    No Tim, NOT bad investing !!! The annualized returns are like 10.8% for the last 20, years or so. The problem is that 61k actives contribute .7 billion and the 205k retirees take out 2.8 billion annually!! This is over a 2 billion operating deficit! The fund needs to make 13% just to break even!!
  • Otmer Evans
    commented 2016-02-15 10:49:43 -0500
    Anthony it was not Reagan it was Jimmy Carter. We discussed this sometime back and people were correct stating it was Jimmy Carter.
  • Tim Vermillion
    commented 2016-02-15 10:05:20 -0500
    In 2008 when the fund was at $26.1 billion. The fund paid Goldman Sax and Northern trust investments millions of our dollars to lose $8.8 billion . The stock market drop to 8000 points. Since then, has double back and even gone to new high’s of 19000 points but never has made back those losses. More bad investing and bonuses to Nyham and all his crooks..
  • Anthony Guercio
    commented 2016-02-15 02:00:41 -0500
    You can look back to 2 important government decisions that have crippled the Teamsters. Reagan’s deregulation in the 80’s and Clinton’s NAFTA in the 90’s.
  • Tom Dolyniuk
    commented 2016-02-14 01:08:43 -0500
    With the early 2016 stock market declines with fund now has closer to just 15 billion left. Should the government pay for our pensions as the previous post suggested? Ring up for national debt? I guess government pensions( some lavish and/or excessive) are paid
    for by the taxpayers. I think maybe they should be cut, but that is a whole other topic. Cenrtal States Pension is for non-government companies. that is the difference. To bad that some central states pensioners were given too good of a deal relative to what their total contributions were. Now the fund is in trouble because of this, so cuts will start July 1, 2016 . Also, Nyhan and his staff being overpaid with pension money.
  • Paul Dillon
    commented 2016-02-11 23:38:34 -0500

    We need someone to start a petition calling for fully funding retirees pensions! If our government can spend a trillion dollars on fighter planes that don’t work? Pensions for people that did work shouldn’t be an issue!
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