May 22, 2009: Most members covered by Teamster pension plans recently received an Annual Funding Notice in the mail, and some of those letters have been pretty scary.
Many of them contain terms like endangered, underfunded, or critical status. References are made to rehabilitation plans, and members are told that early retirement plans could be cut or eliminated.
The good news is that in the short run, pension plans received a reprieve via the Worker, Retiree, and Employer Recovery Act (WRERA) of 2008. Most Teamsters, including those in the Central States Plan, probably won’t experience any further pension cuts.
But in the longer run, many of our pension plans need help.
The WRERA, passed in December, amended the misnamed Pension Protection Act of 2006 to give multi-employer pension plans more breathing room to recover from the financial crisis.
First, it allows pension plans to stay in the same status that they were in last year, even if the funding level has gone down.
Second, funds can extend their funding improvement plans by up to three additional years.
Funds that are in the Yellow Zone (endangered status) or Red Zone (critical status) are not required to make any changes if they have a funding improvement plan in place from 2008.
Relief from some of the strict terms of the Pension Protection Act is welcome, and more such relief is needed. But we also need a plan to strengthen and improve our Teamster pension funds. Click here to see how we can make improvements.