The 2022 year-end report of the Independent Special Counsel of the Central States Pension Fund reflects the huge change in the Fund’s standing. It ended the year with net assets of $41.5 billion dollars and nearly full-funding.
The report also recommends the end of the 40-year consent decree which dates back to the Carter Administration’s lawsuit against the fund’s trustees for mismanagement of pension assets.
The Financial Report
The year-end Financial and Analytical Report shows that the fund paid $2.84 billion in pension benefits, and that 98.4% of all money spent went to pensions. There are 42,627 working participants, and 192,206 retirees and surviving spouses receiving benefits.
With assets increased by the $35.8 billion in special assistance received in December, the fund should now be able to earn significant returns on investments to sustain and improve benefits. Thanks to the Butch Lewis Act.
The Fund’s trustees replaced the fiduciary investment manager in October 2022 with BlackRock Financial Management. The Fund’s investment policy for the past few years has been to safeguard assets with conservative bond holdings and zero investments in stocks. That is likely to change to a more balanced portfolio similar to other pension plans.
The Consent Decree to End?
The Special Counsel report includes (pgs 13-16) a recommendation to the court to end the 40-year old consent order. This order was originally sought because of the Fund’s history of investments in Las Vegas interests associated with organized crime. Teamster president Roy Williams was imprisoned in 1983 for corruption associated with the Fund; Williams later admitted under oath that he received monthly payoffs from organized crime during his tenure as a fund trustee.
David Coar, the Special Counsel appointed by the court, notes that in 40 years there has been full compliance with the consent order.
[Note that this consent order covers only the Central States Pension Fund and is unrelated to the consent order of 1989 which requires that Teamster members directly elect our International officers and convention delegates.]
The consent order worked as intended. The trustees were no longer involved in making individual loans or investments; instead, the fund’s trustees retained professional money managers, like other Teamster funds do.
Many Teamsters have been led to believe the government took over investments or benefits, but none of that was part of the consent order. The trustees retained control of investment policy and of decisions on decisions.
It will be up to federal judge Thomas Durkin to decide on the motion to end the Fund’s consent decree.