This October, I am eligible for a 30 and out pension at age 54. But with the new pension law on the books I don’t know what to do. I’ve heard that if my fund goes into the Red Zone next year, they can cut my benefits after I’m already retired. I can’t afford to retire on less than my full benefit. Do I have to keep working to hedge my bets or what?
- 29 and Almost Out
Dear 29,
The Pension Protection Act doesn’t go into effect until next year but already it is creating a lot of confusion—especially the Red Zone Amendment.
In your case, the good news is there is no bad news.
As initially drafted, the Red Zone Amendment would have allowed funds in the Red Zone to cut the benefits of Teamsters who had been retired for less than a year. That would have left folks like you in limbo—worried about retiring and then having your pension cut.
Teamsters for a Democratic Union organized multiple lobby days to try to defeat the Red Zone in its entirety. We failed—but we defeated the provision that would allow funds to cut retirees’ benefits.
That means if you make it to your October retirement date (and here’s hoping) then you can take your “early retirement” pension without having to worry about getting hit by cuts after you retire.
On the other hand, if you keep working into 2008 and your pension fund falls into the Red Zone, then it is possible that the plan could eliminate 25-and-out and 30-and-out benefits and then you’ll either have to take a reduced pension or keep working until you reach “normal retirement age.”
Fortunately, we don’t expect any major Teamster funds to fall into the Red Zone next year. Teamsters with specific questions about their pension plans should contact their pension fund or TDU to get individual advice.