The first quarter 2017 Financial and Analytical Report of the Central States Pension Fund shows that it has treaded water over the past 12 months, due to a booming stock market. But that situation cannot last.
The Quarterly Report of the Independent Special Counsel reflects the seriousness of the situation. In fact, the Fund, on the advice of its fiduciary, Northern Trust Investments, is now decreasing its investments in stocks. This will likely yield lower returns, but should help protect the fund from any potential stock fall, as its assets dwindle in the coming years.
The fund’s $15.45 billion is 48% in stock holdings; last year it was 65%. Over the 12 months ending March 31, 2017, the fund made 12.1% on its investments, due to the fact that 2016 and early 2017 have seen a run-up in stocks. (The fund made 16.6% on its stock holdings in that year.)
Other notes of interest gleaned from the Special Counsel Report and the Financial Report –
* The Central States Health and Welfare Fund (TeamCare) is buying a new building to house the pension fund and H&W fund. The lease on the long-time home of the fund in Rosemont Illinois will not be renewed. The pension fund will lease space from the H&W fund.
* The Special Counsel Report notes the review of the fund by the Government Accountability Office (GAO), a review that was demanded by the pension movement and then requested by Senator Grassley. The final interviews of fund fiduciaries and representative were last month, on July 10, 2017.
* The pension fund has 57,739 actives and 202,485 pensioners; each number is down about 1% from a year ago.
The Financial and Analytical Report of the Health and Welfare Fund shows that its reserves continue to grow. It has 190,033 active participants and 6,512 retirees.
The quarterly financial reports on the fund are available only from Teamsters for a Democratic Union. It took a successful federal lawsuit filed by participants to make them available.