Central States Pension Fund Loses $3 Billion

September 19, 2008: The Central States Pension Fund lost $3.1 billion during the first six months of this year, which is half as much as the $6.1 billion that the fund received in December from UPS as a pay-out to leave the fund.

The fund lost $2.1 billion on its investments in the first half of 2008, or eight percent of its assets. At the same time, the fund suffered a $287 million loss of income, compared to the first half of last year, because UPS is no longer contributing to the fund.

The investment losses during the first half of 2008 came as stocks dropped dramatically. Central States fared worse than most other pension funds due to its aggressive investment strategy: their Quarterly Report provides a comparison to the average of other large funds.

No More UPS Contributions

When the Hoffa administration gave UPS management a huge concession in the form of the pensions of 44,000 full-time UPSers, they told Teamsters that the deal would work out well for the Central States Fund, because of the $6 billion received from UPS.

Six months later, that claim does not hold up, especially since CSPF has lost $600 million per year in contribution income that UPS would have had to pay in. And that income figure would grow each year, as employer contributions go up as required by the contract.

Relying More on Investments

Prior to the deal to allow UPS to exit the fund, Central States relied on employer contributions for about 50 percent of its income, and investment returns for about 50 percent. Now, Central States must count on investment returns for some 70 percent of its income, with employer contributions contributing about 30 percent. This makes Central States more dependent on investment returns than most other pension funds.

Central States’ assets stood at $23.7 billion as of June 30, so there is still plenty of money to sustain benefits and recover, as long as the union leadership is committed to make it happen.

You can obtain a copy of the Quarterly Report of the Independent Special Counsel, and the Quarterly Financial and Analytical Information at www.tdu.org.

TDU members won an order in federal court that requires the Central States Fund to provide us with this information. Previously, they kept it secret from members.

Get Advice Join TDU Donate

Recent News

During the Crisis of the Century, Hoffa Sides with Management

Since the beginning of the COVID-19 pandemic, Teamsters across the country have been thrust into an unexpected crisis of unforeseeable proportions. At UPS, no sooner did many of us find out that we were a part of the “essential workforce” than we were fighting on the shop floor to protect ourselves from the virus.  

All YRCW Teamsters in TeamCare Get Coverage Extended

A May 9 Memo from the IBT Freight Division reports that arrangements have been made so that both active YRCW employees and employees laid off after March 1 will have the full 8 weeks of “Layoff Coverage" going forward from May 10 to continue health care coverage, if they are in TeamCare (Central States H&W). This includes both employees who have been actively working and those who may have already used up some of the “layoff coverage.”...
View More News Posts