April 15, 2015: The Central States Pension Fund has launched a PR offensive to sell their fast-track pension cut plan as the only way to “rescue” members’ retirement. Teamster members and retirees are demanding a review by independent actuaries and consideration of alternative proposals before the cuts are imposed.
Central States Director Thomas Nyhan pitched his plan in a letter and national conference call, calling for deep cuts on a fast track with no amendments permitted.
Nyhan’s conference call was scripted from start-to-finish. The “question-and-answer” segment consisted of softball questions with pre-scripted answers.
“We just got a rehash of what we already know,” said Dave Scheidt, a retiree from Kansas City Local 41. “We’re paying Nyhan $662,000 a year for that? He needs to go.”
“Nyhan said that some will tell you that there are easier solutions, but there are not. He's right, that's the easiest way --just cut pensions!” said Mike Walden, chair of the Northeast Ohio Committee to Protect Pensions. “We need a real look at all the alternatives.”
Teamster members and retirees are calling for an independent review of the fund that evaluates possible alternatives to Nyhan’s pension demolition plan.
The Save Our Pensions movement is growing and organizing meetings to inform Teamsters and build grassroots pressure to win changes to the Nyhan plan.
Why is an independent review necessary?
Even if you have a good doctor, it’s wise to get a second opinion before undertaking a serious operation. In this case, the pensions of 400,000 Teamsters and retirees are going under the knife.
Under the law, Teamsters are entitled to a retiree representative to the Fund to watchdog for their interests during the pension cut process. But Central States appointed Sue Mauren to be the fund’s retiree representative—a retired official with multiple pensions and close ties to the Hoffa administration. That doesn’t cut it.
Independent actuarial experts could safeguard participants’ interests by evaluating the fund and analyzing alternatives to Nyhan’s Fast-Track plan.
Is there really time for an independent review? Nyhan says there is no time to delay.
Of course, decisive action is required: the fund is in trouble. But the numbers do not justify a rush to judgement—not when the retirement of 400,000 Teamsters who earned their pensions is on the line.
The Fund is not on the brink of bankruptcy. Its assets have actually grown over the past six years. The Fund had $18 billion in assets on September 30, compared to $17.3 billion at the end of 2008 when Wall Street crashed the economy.
Nyhan claims the Fund will go broke in 11 years—but these charts, based on assumptions used by the fund, show that it would actually be closer to 17 years. We cannot allow Central States to go broke at any time, but it is more evidence of why a full review by independent actuaries is needed.
What is Hoffa doing to protect our pensions?
Hoffa was not on the call, nor were any International Union officers. Vice President John Murphy showed up at the Save Our Pensions rally to glad hand the crowd and told people he was “sent by the General President to support what they are doing” and that Hoffa will “fight for the repeal” of the MRPA pension cut law.
If that’s the case, why are Teamster Trustees and International Officers lining up in favor of the Central States cuts? Nyhan has repeatedly stated that all the trustees, including the Union Trustees, support his pension cut plan and his schedule which allows for no amendments.
What Can We Do?
The Save Our Pensions movement is growing and organizing meetings to inform Teamsters and build grassroots pressure to win changes to the Nyhan plan.
We are building a united movement with AARP, other unions, the Pension Rights Center and public allies to support a pension relief bill that will soon be introduced in Congress.
We worked our whole lives for our pensions—now we are working together to defend them.
April 15, 2015: Central States Pension Fund Director is giving the hard sell on his fast-track pension cuts, but withholding all the information members need to formulate alternatives.
He states the plan will go broke in exactly 11 years, and says we cannot question his facts. Where does he get this figure? And why hasn’t it changed as the fund’s assets have gone up?
Taking the fund’s current level of employer contributions and benefit pay-out, and the fund’s standard assumption of 8% average return on investment, it would be 17 years (2032) before the fund would go insolvent, according to Chart #1 below.
That’s still a disaster which we cannot let happen, but it is more evidence that we want a full review by independent actuaries and experts of our fund.
Nyhan, in a speech to officials in Rosemont Illinois on April 8, suddenly “moved the goalposts” to change the CSPF’s projected return from its long-standing policy of 8% per year to 7% per year. So we prepared Chart #2 using a 7% assumption for investment returns—this leads to a projected insolvency in 15 years.
Of course, these charts cannot begin to capture the complexity of the pension fund, but they do indicate why an independent review is needed. How did Nyhan and the Trustees make up the 11 year figure?
We’d all like to see all the facts and assumptions behind the curtain, and have a chance to come up with alternatives. Members and retirees deserve no less.
Chart #1: Central States Fund Potential Decline
Assumption: Employer contributions do not increase, pension benefits are not cut, the same management is in place, and the CSPF’s policy assumption of 8% per year average return on investment. (Actually, benefit payments will likely decline as benefit cuts of recent years take hold.)
Chart #2: Central States Fund Potential Decline – with modified assumption of only 7% average return on investment.
We cannot allow anything like this to happen. But where did Nyhan cook up the 11 year claim? We demand a review.
Sue Mauren was a Teamster employed at the University of Minnesota. She participated in a pension plan run by the university, and was not a participant in the Central States Fund (CSPF) She became a Teamster around 1980 and continued till the early 1990s, when she was hired as a business agent.
Mauren was hired as a business agent in the early 1990s by the leaders of Local 320. The officers of Local 320 were removed for corruption by the Independent Review Board (IRB) in the mid-1990s, and the local was placed into trusteeship. Mauren was not implicated in the corrupt schemes, and retained her position as a BA.
No working members of Local 320 participate in the CSPF. They are all public employees. Thus Mauren did not negotiate or administer any contracts covering CSPF participants.
Later, Mauren was elected and re-elected as the secretary treasurer of Minnesota Local 320. As a BA and full time officer of the union, she became a participant in the CSPF, by virtue of her office, until she retired in 2012.
Mauren had other pension and lump-sum retirement plans as well:
- She retained rights to her pension credits earned at the University of Minnesota.
- As an officer of Local 320, she benefited from the Joint Council 32 plan, which is only for officers and agents; it paid a sizable lump sum upon her retirement.
- As an officer of Local 320, she enjoyed a matching 401k plan, with contributions from her and matching sums from the Local 320 treasury.
- As a BA and later the secretary treasurer of Local 320, she earned about 20 credited years in the Central States Fund.
Mauren received three union salaries: from the local, from the joint council, and an extra $40,000 per year from the International union. She was very close to the Hoffa leadership. Her brother-in-law, Jeff Farmer, was appointed Organizing Director of the IBT by Hoffa.
Thus sister Mauren is a participant in the CSPF, but unlike most participants, she has enjoyed additional pensions and lump-sums.
April 14, 2015: Under the banner of “Save Our Pensions”, 175 Minnesota Teamsters and retirees met on April 11 in St. Paul to get the facts and build the movement to save pensions. A surprise guest, Minnesota Congressman Rick Nolan, declared his support for repealing the pension-cut law and replacing it with a fair solution.
The Save Our Pensions Committee called the meeting, and greatly expanded its working committee as a result of it. More meetings are planned in the Midwest, South, and in North Carolina, as the movement spreads.
In addition to backing a bill to be introduced in Congress, the meeting discussed outreach to involve both retirees and active Teamsters, and to build for a strong No vote on the cuts. The vote, which is expected by late summer, will be a way to gain bargaining power for the movement. The law allows the vote to be overruled, but a strong No vote is essential for credibility in Washington and in the union.
Speakers at the Minnesota meeting included Mike Walden, the chair of the Northeast Ohio Committee to Protect Pensions, Karen Friedman, Policy Director of the Pension Rights Center in Washington DC, and Ken Paff, National Organizer of Teamsters for a Democratic Union. But the stars were the retirees and Teamsters who continue to build the momentum we need.
April 9, 2015: Yesterday Teamster leaders and Central States Pension Fund director Thomas Nyhan laid out in vague terms their plan to cut the pensions of retirees and active Teamsters. A preliminary letter to all participants will be mailed out today.
No details or numbers are being revealed, but they did outline their timeline for cuts. By June or soon after, every active Teamster and retiree will receive an individualized estimate of how the proposed cuts will affect them personally.
By late summer or fall, there will be a vote of all active and retired Teamsters on the plan. It is very important that Teamsters and retirees organize now to prepare to reject the plan – we need to send a signal to help mitigate the cuts and win a better solution.
The law requires this vote and certain procedures which will take several months, so no cuts are possible until the spring of 2016.
That gives us time to organize for better solutions that do not place the full burden on slashing pensions. Retirees and Teamsters are organizing now – and the movement is spreading. To get involved, click here.
The pension fund named a Retiree Representative, Susan Mauren, which is required by law before they can go forward on their plan to cut pensions. A letter from Mauren provides her contact information. Retirees are calling on sister Mauren to meet with the retiree committees that are forming to fight the cuts, and to commission a truly independent actuarial review and audit. Members are asking about Mauren – you can read her Teamster background here.
The battle to save pensions is going forward.
April 8, 2015: Over 100 Teamsters from across the Midwest and South converged on the Rosemont Convention Center today to voice their objections to possible pension cuts by the Teamster Central States Pension Fund.
"We're here today because we worked hard, sometimes gave up raises, to earn a decent pension,” said Greg Smith, a retiree from Akron Ohio Local 24. The retirees talked with officials and passed out a leaflet to them, as they entered the meeting called by the pension fund.
In that meeting, fund director Thomas Nyhan told Teamster officials that pension cuts are the only answer, and laid out a timeline.
Nyhan was a principal supporter of a bill that sneaked through Congress as an amendment to the federal budget last December, to allow troubled pension plans to make cuts in already-earned pensions.
The rally was called by committees that are part of a growing movement to defend pensions. Groups travelled from Wisconsin, various Ohio cities, Iowa, Tennessee, Michigan, Georgia, Missouri and other areas. The Wisconsin Committee to Protect Pension spearheaded the rally.
Nyhan reported that they will immediately mail a preliminary letter to 65,000 active Teamsters and 210,000 retirees and others who have earned a vested pension. His timeline calls for cuts to be announced to each member early this summer.
Under the new law, all retirees and active Teamsters will then get a vote. Even though that vote can be voided, it is a crucial tool to send a signal where we stand, and the pension movement will make the most of it. That vote could come by late summer. The fund has a new website page to explain their plan for pension cuts.
Nyhan wants the cuts implemented by a year from now. That gives us time to head them off and work for better solutions.
The pension movement, Teamsters for a Democratic Union (TDU) the Pension Rights Center, in alliance with the AARP and various unions, is calling for change to the pension cut law so that the full burden of pension problems does not fall on retirees, who earned their pensions.
And where is Teamster president Hoffa, as the Teamster Trustees of the Teamster fund call for slashing pensions?
Hoffa sent International vice president John Murphy to gladhand retirees at the rally. He repeatedly claimed that Hoffa is “on your side” fighting the cuts. Then he walked in and heard Hoffa’s other representatives, such as international trustee Jim Kabell and the Teamster trustees of the fund, tell officials to sell members and retirees on getting their pensions slashed.
In December 2014, Congress changed pension law by attaching the Pension Reform Act (PRA) to the must-pass 2015 omnibus spending bill as a rider. Doing so allowed the PRA to not be debated on the floor and spared House and Senate members from having to vote on an unpopular measure.
Currently, the U.S. House Committee on Ways and Means is pursuing the reform of Social Security, using much the same rationale that was employed to cut benefits of private pension-plan participants — that if changes are not made, retirees face drastic cuts. The committee states: “Without action to address the fiscal and structural challenges facing Social Security, seniors will see a 23 percent cut to their benefits beginning in 2033. Action must be taken now to preserve the promise of Social Security for today’s beneficiaries and future generations.”
Click here to read more at the Star Tribune.
A new website reveals that Enron-billionaire John Arnold has spent up to $50 million of his own fortune to dismantle retirement plans for firefighters, nurses, teachers and other public employees.
The website – Truth About John Arnold – is sponsored by the National Public Pension Coalition (NPPC) andCalifornians for Retirement Security and traces the wide financial influence that one billionaire has on public pension fights. John Arnold amassed his fortune as an Enron trader, where he earned an $8 million bonus as the company’s collapse decimated $1.5 billion in public pension assets. Arnold turned his $8 million into billions as a Wall Street hedge fund manager.
Click here to read more.
March 31, 2015: Stop the rush to pension cuts will be the rallying cry when retirees and active Teamsters converge on Rosemont, to ask their local officers to Say No to Pension Cuts.
The Central States Pension Fund has summoned hundreds of Teamster officials to a meeting Wednesday, April 8, where pension fund director Thomas Nyhan will report on his plans regarding possible pension cuts for some 300,000 retired and active Teamsters.
The Wisconsin Committee to Protect Pensions has called for a rally to defend Teamster retirement security to commence at 11 am outside the Rosemont Convention Center. Active and retired Teamsters from Ohio, Missouri, Minnesota, Michigan, Illinois, Iowa, and as far as Georgia will be traveling by bus, car, and van to meet up and be heard.
"Why are we being rushed to take cuts when Central States has had over two years to get this bill passed by Congress?”, commented Bob Amsden a retired Milwaukee Local 200 freight Teamster.
All concerned retirees, active Teamsters, and retiree advocates are invited to be there and lend support. We will take our case to all the union officers attending as well as the national media.
WHAT: Rally to Defend Our Pensions. No Rush to Pension Cuts without an Independent Audit.
WHEN: 11 am CDT, Wednesday April 8.
WHERE: The Rosemont Convention Center is located at 5555 N. River Rd. in Rosemont, Illinois.
FURTHER INFORMATION: Wisconsin Committee to Protect Pensions – Bob Amsden (414) 688 -5010. Northeast Ohio Committee to Protect Pensions – Mike Walden (330) 801-1108. Cincinnati Area – Tom Krekeler (513) 324-3574. St. Louis Area – Sue Cole (314) 550-6179. Central Ohio Committee to Protect Pensions – Whitlaw Wyatt (740) 606-4861. TDU – Pete Landon (313) 842-2600.
March 24, 2015: Over 200 active and retired Teamsters packed the Cincinnati Local 100 hall for the monthly Retirees Club meeting to hear speakers address the pending cuts to Central States pensions. Mike Walden, chair of the Northeast Ohio Committee to Protect Pensions, told a standing room only audience that it was time to organize to push back the attacks on retirement security.
That same day, 150 Teamster retirees met at the Columbus union hall and heard Greg Smith, an Akron Local 24 retiree, speak on the pension issue. Representatives from U.S. Senators Brown and Portman’s staffs were also present to hear retirees speak out on the importance of maintaining the pensions they rely on for their retirement. See the article covering the meeting in the Columbus Dispatch.
Tom Krekeler, a retired Local 114 Teamster and Secretary-Treasurer of the retirees club, said, “Out of this meeting, we’re organizing a pension committee. We need to get the word out to hundreds of members who know nothing about what’s coming. We got a number of volunteers to sign up to help out. Spouses are getting involved too. We need to let Central States know that we won’t accept cuts without a fight.”
A committee was also formed in Columbus to carry forward the struggle to protect pensions. On March 21, a conference call of 100 pension committee and activists, convened by TDU, got reports from some committees and from the staff of the Pension Rights Center in Washington DC, on where the grassroots campaign is headed.
The campaign is spreading throughout the Central and Southern regions, and beyond.