August 15, 2014: The Central States Pension Fund has given YRCW an extension until 2019 to repay $109 million that YRC owes the pension fund. This was revealed in a filing with the Securities and Exchange Commission and in the 2014 First Quarter Report filed by the Independent Special Counsel on July 30.
That report, along with the Financial and Analytical Report obtained by TDU, indicates that the fund’s assets fell from $18.7 billion to $18.5 billion during the first quarter.
YRC has owed the $109 million to the fund since 2009, when it failed to make required payments, and has twice extended the deadline for making a balloon payment. The latest extension came by vote of the Central States union and management trustees in January, 2014. The trustees are reluctant to strain YRC’s weak finances. YRC makes interest payments of $550,000 per month.
While $109 million is small compared to the fund’s assets, it is still a very significant debt obligation to the troubled fund, as some YRC Teamsters and Central States retirees have already noted.
Central States lost $209 million in assets in the first quarter because the investment return of 1.7% could not keep up with pension payments.
Meanwhile, the Central States Health and Welfare Fund continues to run in the black and build up its outsized reserves. As its number of Teamster participants has more than doubled, with the addition of UPS part-time and full-time members, future reports will bear watching closely. Many UPS Teamsters recently put into the Central States Fund (TeamCare) are finding that certain benefits are falling short of promises made by the Hoffa-Hall administration.