Central States Assets Fall – But Relief is Coming!

The assets of the Central States Pension Fund fell to $9.8 billion at the end of March, a drop of $573 million in the first quarter.  The fund projects forward that it will pay $2.83 billion in pension benefits this year, while taking in $651 million in employer contributions.

central_thumb_(1).jpgFortunately, the Butch Lewis Act, passed as part of the American Rescue Act and signed into law on March 11, will provide the assets needed to safeguard all Central States Pensions going forward. 

The Pension Benefit Guaranty Corporation (PBGC) is currently finalizing the regulations that will spell out the details of the pension protection program, which will save not only Central States pensions but those of many pension plans operating in many different unions and fields.

The rescue plan will provide the first relief to pension funds that have already cut benefits. In the Teamsters, the New York Local 707 is one of these funds where benefits have been slashed. Local 707 retirees will get their pensions restored and will get back-benefits for the cuts they have endured. 

Hopefully that will be by the end of this year, but the date is not yet known. Relief to Central States, in the form of an infusion of assets to cover all pensions at least through 2051, will likely come later in 2022. 

Because Central States has nearly $10 billion in assets, and paying pensions of about $2 billion per year over income from employers still in the fund, the fund would be insolvent in less than five years without the Butch Lewis Act relief.  

The pension protection movement, led by our Teamster retirees, showed what grassroots lobbying could do with seven years of effort. They won pension protection for millions of working Americans.

The Central States 1st Quarter Financial and Analytical Report is available here.

The 1st Quarter Report of the Independent Special Counsel is available here.

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