April 10, 2009: The 2008 Financial and Analytical Report on the Central States Pension Fund was finally issued in late March, and it’s not pretty.
There are no big surprises, but it reveals that the Fund will ask the IRS for a waiver because it cannot meet its funding target for this year.
The report, which was expected on February 1 but was not issued until late March, is available to members only through Teamsters for a Democratic Union.
Neither the Fund nor the IBT will provide this document to members; we had to go to federal court to compel the Fund to provide these documents each quarter.
Key points in the report include:
The Central States Fund had $17.3 billion at the end of 2008, down from $26.8 billion a year earlier. This was largely due to the stock market crash; Central States lost 29.8 percent on its investments. This was a little worse than most pension funds, because the CSPF has 64 percent of its assets in stocks.
The CPSF will have to make 11 percent on its investments just to break even in 2009; that is, to maintain its current level of assets. This is because employer contributions are drastically reduced, due to the Hoffa administration’s plan of allowing UPS to leave the fund a year ago for a UPS company plan.
While the number of retirees is holding steady at 212,000, the number of active participants went down sharply to 88,000. That again is due to the disastrous plan of allowing UPS out of the fund.
The bulk of employers have agreed to contracts that meet the CSPF rule of eight percent increases in contributions per year. However, contracts covering 9,700 Teamsters (11 percent of the total), are not yet in compliance and are paying a five percent surcharge as a result.
The report notes that the Central States Health & Welfare Fund is in much healthier shape. It finished the year in the black.
The Central States Financial and Analytical Report is available here.
A Plan for the Future of our Pension Funds
While no failure of the Central States Fund is imminent, it is clearly in trouble. So are a number of other pension funds. That’s why it is so important for our union to launch a campaign, along with other unions and allies, to win real federal protection for workers’ pensions.
The International Union has a committee of officers looking at this issue. We hope they move from talk to action.
Workers’ pensions are a mainstay of our economy and a bulwark against impoverishing millions of seniors. The Pension Benefit Guarantee Corporation (PBGC) is supposed to protect pensions, like an insurance plan, but it is woefully underfunded. An infusion of federal funding could be used to shift some burden from union plans, especially for the pensions of retirees whose former employers are now out of business.
The other key to rebuilding and securing the Central States Fund is organizing new members, and bringing them into our pension plans. Again the Hoffa administration has led our union in the wrong direction, when they organized UPS Freight but failed to bring those Teamsters into our union pension plans.
We need to work to pass the Employee Free Choice Act, which would help level the playing field between unions and corporations. And we need a union leadership committed to organizing workers into our pension funds.
Get More Members into Our Fund
“The $6 billion that UPS paid to exit the Central States seemed like a real windfall but now it’s all gone in the stock market downturn. It’s a shame Hoffa Jr. gave UPS Freight a pass on Teamster pensions. Both of those decisions are coming back to haunt thousands of Teamster members and retirees.
“We need to get more Teamsters into the fund. I’m sure it took Hoffa Sr. some hard bargaining to get all those companies to sign on years ago. That’s the kind of negotiating power we need from our leaders today if we’re going to have any chance of turning things around.”
Tim Pagel, YRC, Local 988, Houston
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