February 3, 2015: A review of the 3rd quarter 2014 financial report of the Central States Pension Fund shows that the fund has $18 billion as of September 30, 2014.
Compared to the previous year, the fund saw a net investment income decline of $1.2 billion but it was offset slightly by a $94 million net increase in operating income. The report provides no explanation for the investment income downturn though it states that Trustees met with the named fiduciary, Northern Trust.
The report, filed January 26, 2015, mentions passage of the Multiemployer Pension Reform Act of 2014 but states, “it is too soon to assess the potential impact of this complex legislation on the Pension Fund.”
Teamsters for a Democratic Union (TDU) is working to fight any pension cuts and build a movement for pension justice.
Anyone who thinks that congressional votes, federal regulations and the machinations of Wall Street have no bearing on their day-to-day lives should talk to John Raffiani Sr.
The Greene County resident is getting a hard lesson in what could be called the downside of deregulation, the decline of unions and the lingering effects of the 2008 recession.
He's one of at least 50 retired Capital Region truck drivers facing a deep cut in their monthly retirement checks due to looming shortfalls in their union pension funds.
The cuts will be allowed thanks to an amendment that was tucked into the most recent federal budget, which was approved by Congress and signed by President Barack Obama in December.
About 100,000 New Yorkers who depend on a variety of private-sector union pensions could be facing lowered payments in coming years.
And while the pension fund that Raffiani relies on, the Teamsters' Central States Pension Fund, is the most prominent and most threatened pension fund right now, the amendment opens the door for potential future cuts to an estimated 10 million retirees nationwide who are enrolled in "multi-employer" pension plans.
Raffiani and others want to know how such a measure was folded into the larger budget rather than debated on its own. "I worked hard for 35 years," said the 68-year-old. "I paid a lot of money over time into that fund."
Raffiani was a Teamster "car hauler," a truck driver who specialized in transporting new cars to dealerships around the Northeast.
Everyone has seen them — the big rigs with double-decker trailers laden with shiny new vehicles.
In the trucking world, this is an elite group: Drivers not only deliver the valuable cars, but they need to get them on and off their trailers without a scratch. Raffiani and his fellow drivers transported cars from the vast rail yards in Selkirk to dealerships across the region.
He was enrolled in the Teamsters' Central States Pension Fund, which has more than $17 billion in assets. Despite that, a confluence of trends threatens the fund's long-term solvency.
Since the trucking industry was deregulated in 1980, there have been fewer big companies paying into the plan, and even fewer union drivers contributing to the fund. Add in the lingering hit from the 2008 financial crash and the plan, which now pays $4 in retirement funds for every dollar it's collecting, is facing long-term peril.
As a result, the fund's managers sought and got permission from Congress to make the cuts if needed.
Raffiani says his approximately $3,000 monthly pension could be cut almost in half.
It should be a while before that occurs, according to the union, but most expect it to happen by 2016.
Raffiani got into the car hauling business almost by chance, and he stuck with it as he gained experience and seniority.
He began driving concrete trucks after high school, but that was seasonal. When he got the chance to haul cars, he jumped.
In his best years, Raffiani earned more than $50,000 with benefits. Some drivers made twice that if they were willing to drive all the time and spend weeks away from home.
It was never easy, though. As well as driving for 10 hours at a stretch, car haulers have to load the new vehicles on their trailers, then chain them securely in place. It can take a few minutes or few hours, said Raffiani, depending on the vehicles. The job also requires clambering around a double-decker trailer in all kinds of weather, day and night, using heavy steel rods or tie-down bars to secure the chains holding the cars.
"The bars do a number on you," Raffiani said, adding that all the fellow car haulers he knows have chronic shoulder problems. "That bar could slip and knock out your teeth."
He remembers the time another hauler lost four fingers when a rod slipped in a particularly bad way.
Another driver died after he was pinned between two cars he was unloading in Newburgh. A Canadian hauler slipped off his trailer one frigid night near the border and landed on his head.
Raffiani considers himself lucky: He got out with the usual shoulder pain and only three hernia operations.
He traveled mostly in New York and New England, although some trips took him as far as Montana and Oklahoma.
Shortly after he started in the business, he noticed an odd phenomenon to which he didn't give much thought at the time.
The companies that had contracts to haul cars seemed to be endlessly changing, especially after deregulation.
They were being taken private or public. Or going bankrupt and reorganizing under different names or owners.
Raffiani has a hard time keeping all his employers straight — many don't exist any more, or have gone through numerous iterations.
He started his career with Anchor Motor Freight and then went to Leaseway. Then it was NuCar. After that he was at M&G Convoy, Automobile Transport and Ryder, and so on.
Some of the firms didn't seem well-managed. He recalls one that got a contract with an unusually low bid — it turned out the Georgia-based owners didn't realize there are road tolls in New York and New England. "Right away, they were in serious trouble," he said.
In retrospect, the game of musical trucks resulted from deregulation. Prior to the 1980s, car hauling was governed by strict federal rules about where trucks could or couldn't go. That limited the competition. Deregulation, especially the Motor Carrier Act of 1980, meant more and more people could enter the business. That may have helped lower shipping costs, but with an ever-expanding list of companies, the pay for the drivers fell and union shops became less competitive.
"Pretty much anybody could haul what they wanted when they wanted to,'' said Raffiani.
For pension funds like the Central States, which has 411,000 members, one result was that fewer and fewer drivers are paying into the plan. Currently, Central States has just one active employee for every five retirees.
Raffiani isn't sure how many fellow retirees know about the looming cuts. He's been trying to get the word out and has spoken with groups like Teamsters for a Democratic Union, which has criticized the union's leadership on this issue.
The Washington, D.C.-based Pension Rights Center is keeping track of the possible cuts and they are pushing the union to keep searching for alternatives.
AARP has sounded the alarm as well, saying they are worried about the precedent it could set.
Some criticize the way the amendment, which was pushed through by Republican Rep. John Kline of Minnesota and Democrat George Miller of California, was inserted into the larger budget bill. They say that had it been a stand-alone measure, there would have at least been more debate.
"Because it was attached to what many viewed as 'must-pass' legislation, many believe there was no choice," said Joellen Leavelle, outreach manager for the Pension Rights Center.
"Whether or not they even knew what they were voting for is another story," Raffiani said of the lawmakers who voted for the overall budget package.
In the aftermath, Raffiani is considering his options. He has renewed his hazardous materials license, which would allow him to drive a fuel truck — at his age, he doesn't want to climb around on car hauler trailers. He drives a school bus part time and refurbishes vacuum cleaners on the side, and thinks about ramping up that business.
He's also looking at opening a small cafe with his wife, who he says is a top-notch cook.
Raffiani has two children in the area, including a son who joined the Air Force years ago. He's already retired with a secure government pension in Georgia, where heating costs and taxes are fraction of what Raffiani pays.
"I've been sick ever since this happened," Raffiani said.
January 30, 2015: TDU's Pension Justice Campaign is on the move. Our voices are getting into the media and Teamster members and retirees are organizing to fight cuts and protect our pensions.
The Atlanta Journal Constitution featured leaders of the Local 728 Retirees Club who are fighting the pension cuts.
“We worked all our lives to earn a decent pension,” said Waymon Stroud, 61, who retired four years ago from Yellow Freight and is now president of the retirees club at Teamsters Local 728 in Atlanta. If his $2,800-a-month benefit got cut 30 percent, he added, “I’d have to go back to work.”
The article also exposed the big Brown corporate loophole that will save UPS $2 billion on the back of Teamster retirees.
A report in the Washington Post lists the Teamster and other union funds that are eligible to cut retiree benefits under the new law.
Teamster members and retirees are coming together to make our voices heard.
TDU pension activists spoke at a recent Memphis Local 667 retirees meeting attended by over 100 Teamsters. Others hosted a meeting in Milwaukee that formed the Wisconsin Committee to Protect Pensions. The Wisconsin committee is planning a larger meeting for February. In Ohio, Mike Walden—chair of the Northeast Ohio Committee to Protect Pensions will speak in March with other pension activists at retiree meetings in Columbus and Cincinnati. Plans are percolating for other meetings across the South and Midwest and beyond.
We are reaching out to allies, like the Pension Rights Center, AARP, sympathetic political leaders, and other unions. But to build a strong coalition to protect our pensions, we need to bring concerned Teamsters to the table.
That means reaching out to members and retirees in our areas. Contact TDU if you’re interested in helping organize a pension meeting in your area. We can help, including with guest speakers who can help explain pension issues and what’s next for the pension protection campaign.
Follow us at www.facebook.org/teamstersforademocraticunion
If you weren’t paying close attention to happenings in our nation’s capital around the holiday season - and who could blame you - this might have slipped your notice: Important pension reforms were signed into law that will have dramatic impact on retirement for 10 million Americans.
Buried deep in the $1.1 trillion "Cromnibus" spending bill signed last month by President Obama, the reforms aim to head off a looming implosion of multiemployer pension plans - traditional defined benefit plans jointly funded by groups of employers. The eye-opener is that the reforms mean possible cuts in benefits for people who are already retired - a rare move in retirement policy.
Click here to read more at Wealth Management.
"I hauled cars out of Selkirk, New York for 31 years. I worked for a number of different companies – Automobile Transport, Nu-Car Carriers, Anchor Motor Freight, M&G Convoy, Leaseway, Ryder and finally, Allied. I retired in 2002.
I worked extremely hard in 35 below zero weather and 110 degrees in the shade. I went through lay offs, mergers, loss of seniority, company closings and now they want to cut my pension. That just isn’t right.
Welcome to the new U.S.A. It’s time to fight back."
January 13, 2015: The Central States Health and Welfare Fund (TeamCare) is flush with money, as Hoffa and Hall make excuses for benefit cuts that UPS Teamsters and retirees have suffered.
The latest (2nd quarter 2014) TeamCare Financial and Analytical Report shows that its reserves continued to grow at an annual rate of $326 million per year during the first half of 2014.
The report notes that UPS paid a lump sum of $1.713 billion to cover the future benefits of retirees. With that payment, UPS dumped its obligation to retirees onto Central States.
As a result of a contract concession, UPS retirees in the fund will pay higher monthly premiums for health care.
In addition to that $1.7 billion, the fund has an additional $2.2 billion in reserves, which increased by $163 million during the first half of 2014.
On March 1, 2014, some 10,000 UPS Freight Teamsters joined the fund, and some 72,000 UPS package Teamsters did so on June 1, 2014. About 9,000 Local 705 Teamsters will join TeamCare on February 1, and about 6,000 Local 710 Teamsters are expected to join soon after.
Because the report only covers until June 30, 2014, the impact of some 100,000 new participants is not detailed in the report. The third quarter report – expected soon – may be more informative.
Note: The report was submitted by the Independent Special Counsel on December 3, but the Central States Fund delayed providing it until January 12. They are bound by a court order which we won to provide the quarterly financial reports to the attorney for retirees who sued the fund.
Teamsters for a Democratic Union (TDU) is the only source which makes these financial reports available to members.
January 13, 2015: A review of the 2nd quarter 2014 financial report of the Central States Pension Fund shows that the fund had $18.7 billion as of July 1, 2014.
The fund made big investment returns in the first six months of last year, netting slightly over $1 billion, as the stock market moved up. This allowed the fund to tread water: the $1 billion was just enough, along with $400 million in employer contributions and withdrawal payments, to cover $1.4 billion in benefits. The information is detailed in the quarterly Financial and Analytical Report and the Independent Special Counsel Report.
The number of working Teamster participants declined to 60,000, reflecting the Hoffa administration’s lack of commitment to defend the fund. The number of retirees was 209,000, slightly down.
The average pension paid to retirees and surviving spouses is $1,123 per month.
Teamsters for a Democratic Union (TDU) is working to fight any pension cuts and build a movement for pension justice. Click here to find out how you can be a part of it.
Note: The report is dated December 3, 2014 but the Central States Fund delayed providing it until January 12. They are bound by a court order which we won to provide the quarterly financial reports to the attorney for retirees who sued the fund.
TDU is the only source which makes these financial reports available to members and retirees. We expect the third quarter report to issue soon.
January 9, 2015: Teamsters and retirees from across the Central States Fund and other pension funds are organizing to protect our pensions. Central States was built with pension contributions earned by our blood and sweat.
January 8, 2015: Congress approved pension cut legislation in a sneak attack amendment to the budget bill.
“Congress passed this bill but that doesn’t mean the fight is over. We’ve put Teamster pressure on the Central States in the past and we can do it again. It’s up to us to organize a political push back, too. Stopping this attack on our retirement security means getting involved NOW!”
“For the past year, we heard nothing from Hoffa and the IBT as the lobbyists, including Tom Nyhan from Central States, weaseled their way through Congress pushing for changes to allow pension cuts. Hoffa’s last minute letter was an effort to cover his behind. Hoffa and Hall are more concerned with PR than making a real fight. We desperately need change to save our union.”
January 9, 2015: Reckless Wall Street schemes tanked the economy and Teamster pension funds.