Central States Proposal: Deep Pension Cuts

The Central States Pension Trustees – employer and Teamster – have hit retirees and active Teamsters with the worst possible pension cut proposal.  

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The proposal was submitted to the Treasury Department on September 25, and an individualized letter was mailed out yesterday to all retirees, working participants, those vested.

This is only a proposal, which has not been approved by the US Treasury Department. That process will take several months. 

And, there will be a vote on the proposal. It is important that all retirees and active Teamsters cast a vote and stand in solidarity to vote NO. 

The Pension Protection Movement is actively working to support the Keep Our Pension Promises Act, and expects more federal legislation to be introduced soon. The time to join that movement is now.

The time to clean house at the International Union of officials is next year – to remove those who have done nothing for 17 years to save our pensions.

Just ten days ago James Hoffa called for the proposal to be delayed, in a letter to the Fund director, to work together for more positive solutions. At a meeting today for officers from all affected locals, Hoffa’s Executive Assistant, International Vice Presidents, dozens of International Representatives, and Teamster-appointed Fund Trustees did nothing at the meeting to bring about any delay.

It was all a dog-and-pony act. He’s had nearly 17 years in office to take action to protect pensions.

Fred Zuckerman, the President of Local 89 and Joint Council 94, told a meeting of pension protection activists held immediately following Central States meeting that the Hoffa administration has caused much of the problem by allowing so many companies to exit the fund, and failing to organize companies in.

Fred Zuckerman meets with pension activists.

Fred Zuckerman meets with pension activists.

The Cuts

It will take more time to sort out the details of the Proposed “Rescue Plan” which was submitted on September 25 to the Treasury Department, but not yet released for Teamsters to see.

According to a press release from Central States:

  • So-called “orphans” who worked for companies such as CF, Preston, etc will have their pensions slashed to 110% of the PBGC maximum. For a Teamster collecting $3000 presently, this could mean a cut down to about $1200. This is unconscionable.  
  • If you have pension credits from an “orphan” company and also credits from a surviving company, the cut will be proportionally between the two levels.
  • UPS transfer group: UPS Teamsters who retired in 2008 or later will be protected by the “make whole” clause in the UPS contract (UPS will have to make up for pension cuts as long as that clause stays in the contract). But those who retired before 2008 will suffer cuts.
  • Reemployment Rule. No restrictions for those already retired. For those who retire after October 1, 2015, there will be relaxed restrictions.
  • Accrual rate for active Teamsters will be reduced for 1% of annual employer contribution to .75%.   
  • Phase-out early retirement. Between 2021 and 2025 the age for retirement without reduction of benefits will rise from 62 to 65.

See also the Fund’s Summary Guide to the pension cuts.


Showing 344 reactions

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  • commented 2017-04-21 21:40:52 -0400
    thats one ugly jacket trash ware
  • commented 2017-04-21 06:05:04 -0400
    After retirement, for most of people pensions are very important to run there life in a good manner, but its very disappointed news that now its cutting off more. http://www.ebay.com/itm/Deadpool-Red-And-Black-Armored-Biker-Leather-Jacket-Motorcycle-Slim-Fit-Costume-/222416601257
  • followed this page 2016-10-21 10:05:45 -0400
  • commented 2015-10-28 11:29:53 -0400
    If this application is passed by the Department of the Treasury, thousands of senior citizens lives will be destroyed
  • commented 2015-10-26 16:57:13 -0400
    Well Mike that tells you how Central States does their math
  • commented 2015-10-24 15:14:37 -0400
    we have guys with the same amount of years and retired at the same age from same company that they worked at all those years one got cut 34% and one was cut 50% both worked 34 years and retired at the age of 62
  • commented 2015-10-24 15:09:41 -0400
    we heard that central states put in for a 30% cut way back in May and the Treasury Dept said the cuts need to be deeper that is why instead of hearing about the cutsin early summer like they said.. it was postponed till October .
  • commented 2015-10-22 14:42:29 -0400
    I wrote to the treasury dept when we first got our letters and I heard back from them today and they urged me to tell all my fellow teamsters to write to them and let them know the hardships they are going to endure with these cuts. please write to them.
    MPRAInfo@treasury.gov
  • commented 2015-10-22 01:06:41 -0400
    Nyhan’s salary was 662k in 2012, I believe. During the recent town meeting someone asked him about the Central States executive compensation. He sated that Central States pays out about 4.8% of inflows in salaries, which is under the industry average of 8%.. And the actually the health portion of the fund pays 2/3 of this and the pension portion pays 1/3. Maybe he should compare it to Lebron James, the United Health CEO, or Taylor Swift, so he can seem underpaid ( lol). NO, compare it to the average worker paying in 15k for their pension. Just my opinion, but he is worth no more than 200k.
  • commented 2015-10-21 20:42:53 -0400
    That is one mans’ pension for a year.
  • commented 2015-10-21 18:56:13 -0400
    They have on TDU website that Nyhan got a $32,000 year raise
  • commented 2015-10-21 15:13:47 -0400
    that below was on CNN money today and they were talking about the pension cuts. now they said this is going to effect 10 million people I haven’t heard that at all
  • commented 2015-10-21 15:12:22 -0400
    Under current law, cutting the benefits of those who are already retired is off-limits. Instead, troubled multiemployer plans can take other actions, like reducing the benefits employees earn going forward and raising employee and employer contributions to the plan.
  • commented 2015-10-21 13:30:26 -0400
    At the new .75 accrual rate, it will take 11 years just to recoup the money contributed by participants. So if a person now retires at 65, he/she will get his money back at 0% gain by age 76. At annual stock market returns of even 5%, he would do much better. So the plan going forward is not a good deal, but it is better than doing nothing. If the fund just runs the way it is, it is projected to run out of money completely within 15 years. If that were the case, true some retirees may be better off, but active some participants would get NOTHING, even though they may have contributed up to 300k or more!!
  • commented 2015-10-21 09:23:08 -0400
    I say do nothing and let it go under it will any way. Just like every company that took concessions they went under still.
  • commented 2015-10-21 07:17:39 -0400
    Tom, Central States, did not invest this money the United States Federal courts did since they were in control of the money. They took control in 1982 because Teamsters were stealing our money. Remember when Fitzsimmons, went to prison, because he was lending the money to the mob.
  • commented 2015-10-21 05:03:42 -0400
    I agree Tom
  • commented 2015-10-21 00:12:29 -0400
    It’s kind of like the goverment is going to BAILOUT central states like they did the banks, and SCREW the working man again. I say if it’s going to run out of money in 15 years let it go, let Nyham and the rest of them find new jobs. Their trying to keep their PONZIE scheme going and start stealing from a whole bunch of different people
    Please everyone must see that is what they did .
  • commented 2015-10-20 21:45:13 -0400
    Central States paid Goldman Sacs and Northern Trust to invest the money in the pension fund. And has a whole, the investment returns were good. Goldman Sacs no longer is involved with the Central States Pension Fund, just Northern Trust. Why would Goldman Sacs pay Central States anything, whether the money was part of the 10 billion dollar bailout or otherwise? This makes no sense to even suggest it. Central States isn’t at fault for investment returns, but for false promises, based on a pseudo ponzi scheme, where active participants pay for retirees, after the retirees have exhausted all of their contributions plus the interest there contributions may have made! And for compensated themselves lavishly with pension contributions!!
  • commented 2015-10-20 14:56:33 -0400
    Folks, central states did not lose our money because the federal courts took control of our money in 1982 and they invested it with wall street with Goldman Sac’s, they went under in 2009 and the government bailed them out because they were to large to fell but central states got not one cent of that bail out so blame the federal courts for risking your money and Goldman Sac’s for not paying any of that bail out back to central states.
  • followed this page 2015-10-19 23:29:51 -0400
  • commented 2015-10-19 16:02:57 -0400
    here is a interesting site it shows the vote on HR 83 the bill that had a lot in it including this mess were in now (Kline Miller Act). Sold out by both parties.https://www.govtrack.us/congress/votes/113-2014/s354
  • commented 2015-10-18 21:39:45 -0400
    Tom Dolyniuk
    Thank You.
  • commented 2015-10-18 21:37:26 -0400
    Bob Krouse,

    All that any of us can do is move forward. Hopefully you can come up with a plan “B”. Central States screwed up, and we are the collateral damage. The Department of Treasury has the final say. I believe little will be changed. At least you will collect your 3k/month until July 1, 2016. Good luck to you!!
  • commented 2015-10-18 21:31:23 -0400
    Tom Dolyniuk
    What do you want me to do? Apologize for living so long?
  • commented 2015-10-18 21:24:16 -0400
    Tom Dolyniuk
    You are stuck on that 400/k aren’t you?
  • commented 2015-10-18 21:21:05 -0400
    David,..I had a wife with Cancer, after I retired…there was no money to invest,…the Doctors got it.
    Just a “side note”.
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