What Does the New Pension Law Mean for Your Benefits?

March 27, 2008: What’s in store for Teamster pension funds under the Pension Protection Act?

Members will start to learn more this month when some Teamster plans officially enter the Yellow Zone and Red Zone.

Hundreds of thousands of Teamsters will get reports this month on the funding status of their pension fund.

These funding notices are required by the Pension Protection Act (PPA) of 2006 which went into effect on Jan. 1—and some of them will have scary news.

Pension plans that are less than 80 percent funded—and that includes a number of Teamster pension funds—have to officially notify participants that their fund is in the “Yellow Zone” (Endangered) or the “Red Zone” (Critical Status).

Some Teamster funds are considering new pension cuts—including the New England Pension Fund, the third largest plan in the Teamsters.

Some pension plans have already implemented belt-tightening. Others will not have any need for pension reductions.

Not all Teamsters will be getting funding notices—and not all funding notices will reveal what cuts, if any, are being considered.

The law requires most Teamster funds to send out notices by April.

But these funding notices do not have to reveal what actions the pension fund will be taking.

Funds in the Yellow Zone or Red Zone have to put together a plan to improve their funding.

But that plan, which may include cuts in pension accruals, does not have to be finalized for seven months after the funding notice. That’s December for most for Teamster funds.

In the meantime, some Teamster funds are moving quickly to implement cuts without consulting or even warning the members.

It will be up to Teamsters who are concerned about their pensions to get informed and get involved. Teamsters for a Democratic Union is here to help.

Read more about pension issues in our union in this month's issue of Convoy Dispatch:

 

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