July 27, 2005: The Union Trustees on the New England Teamsters Pension Fund have agreed to new pension restrictions—including eliminating 25-and-out and 30-and-out pensions before age 57.
The cuts are coming just as news of the fund’s strong financial performance is hitting members’ homes. The Fund just mailed its summary annual report to members this week, in which it reported that Fund assets grew by more than $121.5 million in the last fiscal year.
Members who do not have 25 years of credit by July 31, 2005, will not be eligible for 25- or 30-and-out until age 57. Members who do have 25 years of credited service, but are under age 57, are protected and can get their earned pension. But if they continue to work they will have their pension frozen until that age. So a Teamster who is 53 and 27 years credit, with a pension accrued of $2,300 per month, could work the next four years with zero pension improvement. Then, at 57, the pension will snap back to the full rate.
Pension accrual rates are also frozen. New contracts will have to increase pension contributions by 5% per year to maintain the present rate of accrual.
But the biggest cuts are in early retirement: the Trustees’ July 13 announcement states that the goal is to keep Teamsters working longer.
While most Teamsters don’t retire before 57 and will be hurt very little, many do retire early. Many are forced to because of company closures (including the Red Star victims) or health factors. These Teamsters are going to take the brunt of the cuts imposed.
Worst hit of all are those who fall short of 25 years. A Teamster with 24 years credit, at age 49, will not become eligible for any Special Service (25- or 30-year) pension for eight years, until age 57.
An announcement is expected to reach New England Teamsters any day with the details of the cuts.