January 13, 2015: A review of the 2nd quarter 2014 financial report of the Central States Pension Fund shows that the fund had $18.7 billion as of July 1, 2014.
The fund made big investment returns in the first six months of last year, netting slightly over $1 billion, as the stock market moved up. This allowed the fund to tread water: the $1 billion was just enough, along with $400 million in employer contributions and withdrawal payments, to cover $1.4 billion in benefits. The information is detailed in the quarterly Financial and Analytical Report and the Independent Special Counsel Report.
The number of working Teamster participants declined to 60,000, reflecting the Hoffa administration’s lack of commitment to defend the fund. The number of retirees was 209,000, slightly down.
The average pension paid to retirees and surviving spouses is $1,123 per month.
Teamsters for a Democratic Union (TDU) is working to fight any pension cuts and build a movement for pension justice. Click here to find out how you can be a part of it.
Note: The report is dated December 3, 2014 but the Central States Fund delayed providing it until January 12. They are bound by a court order which we won to provide the quarterly financial reports to the attorney for retirees who sued the fund.
TDU is the only source which makes these financial reports available to members and retirees. We expect the third quarter report to issue soon.
January 9, 2015: Teamsters and retirees from across the Central States Fund and other pension funds are organizing to protect our pensions. Central States was built with pension contributions earned by our blood and sweat.
January 8, 2015: Congress approved pension cut legislation in a sneak attack amendment to the budget bill.
“Congress passed this bill but that doesn’t mean the fight is over. We’ve put Teamster pressure on the Central States in the past and we can do it again. It’s up to us to organize a political push back, too. Stopping this attack on our retirement security means getting involved NOW!”
“For the past year, we heard nothing from Hoffa and the IBT as the lobbyists, including Tom Nyhan from Central States, weaseled their way through Congress pushing for changes to allow pension cuts. Hoffa’s last minute letter was an effort to cover his behind. Hoffa and Hall are more concerned with PR than making a real fight. We desperately need change to save our union.”
January 9, 2015: Reckless Wall Street schemes tanked the economy and Teamster pension funds.
January 8, 2015: The lame duck Congress attached pension cut legislation to the end-of-year spending bill that will pave the way for the worst pension cuts in Teamster history.
Some troubled pension plans now have the authority to drastically reduce the benefits of current and future retirees — something that hasn’t happened since Congress passed legislation protecting retirement benefits 40 years ago.
The power was included in the last-minute, $1.1 trillion budget compromise signed by President Barack Obama on Dec. 16.
Click here to read more at the Pittsburgh Post Gazette.
More than a million current and retired truck drivers, construction workers and other union employees could see their pension benefits cut now that Congress has passed a controversial new measure.
By allowing the plans to cut benefits now, lawmakers say it will help keep around 150 pension funds from running out of money.
But retirees aren't exactly seeing it that way. Many gave up years of pay increases and contributed thousands of dollars from their salaries each year toward their promised pensions. As a result, many have little savings outside of their pension benefits and Social Security checks and are not sure how they'll make ends meet if the cuts go through.
"It's devastating," said 63-year-old Dave Scheidt, who retired five years ago after more than 30 years loading and unloading trucks. "We never dreamed that our pension wouldn't be there."
In the worst case scenario, Scheidt could see his current annual benefits of around $37,000 a year reduced to as little as $15,000. He receives his checks from the Central States Southeast and Southwest Areas Pension Fund, one of the multiemployer plans that is now qualified to cut benefits under the law.
Central States lobbied heavily for the new pension-cutting measure, which has led many of its retirees to speculate that it will be one of the first plans to reduce benefits.
However, any cuts would ultimately require government approval and will only be allowed at those plans like Central States that are projected to become insolvent in the next 10 to 20 years.
Benefits also cannot be cut for those with disability pensions or those who are 80 years and older, while cuts must be less severe for those between 75 and 80.
Central States did not respond to a request for comment. But on its website, it says that "given the complexity of the process, it is likely that it would take up to a year before modifications, if any, take effect" and that retirees would receive "advance written notice of any proposal to modify benefits."
The fund, which paid out $2.1 billion more than it received in contributions in 2012 alone, is projected to be insolvent in the next 10 to 15 years. So officials have argued that retirees will ultimately see major cuts either way.
That's because if a multiemployer plan goes insolvent, a retiree is guaranteed less than $13,000 a year from the Pension Benefit Guaranty Corp. In contrast, a retiree in a single employer plan that goes bust is insured for up to $60,000.
In the meantime, the fund's retirees and others are in another waiting game, wondering when -- and by how much -- their checks could be cut.
Scheidt, who has mobilized with other retired Teamsters to oppose the cuts, said he's heard from retirees across the country about the new law. Some, he says, have broken down in tears.
"Many will lose homes and cars and trucks because of this," he said. "These guys are scared to death."
Retired trucking industry worker Kirby Cabrera, 62, is trying to stay positive. "I don't want to preach doom and gloom," he said. But with 20 years of mortgage payments, he too is worried that he could face foreclosure if his current roughly $36,000 annual pension is cut too deep.
He already faces thousands of dollars in medical bills each year as he battles injuries from his years of working on the truck loading docks. Two years ago, he had one knee replaced. In a few weeks, he's going in to have the other one replaced.
Plus, he's worried that current Central State rules limiting employment options for pensioners could hurt his ability to go back to work and make up for any lost income.
For now though, Cabrera said he is trying to stay hopeful that any cuts won't be as deep as he is fearing,
"If they're 30% or 40%, it's going to destroy me..." he said. "I wish I had a crystal ball, and I knew what I was going to do."
For some retirees, Congress has played the Grinch this holiday season.
Tucked into the federal spending bill were provisions that will allow certain struggling multi-employer pension plans to reduce benefits already being received by retirees.
Click here to read more at The Washington Post.