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.

America "survived" the government shutdown, sacrificing the benefits and pensions for millions of retirees. Ed Schultz gives an impassioned response to the new budget. Sen. Bernie Sanders and Rep. Tony Cardenas join the conversation.

Click here to see the video.

Click here to read a brief summary of the Multiemployer Pension Reform passed by Congress expected to become law.

December 15, 2014: Congress has passed pension cut legislation. Our Campaign for Pension Justice will make our voices heard from Capitol Hill to the Central States Pension Fund.

We’re not going to stand by and let this happen without a fight.

Yesterday, TDU held a conference call with over 400 Teamsters and retirees—and we are just getting started.

Click here to join our Campaign for Pension Justice.

Our Campaign for Pension Justice will make our voices heard from Capitol Hill to the Central States Pension Fund.

We will continue to partner with allies like the Pension Rights Center, the AARP, and unions to challenge the new law and fight for new pension protections.

We’re also organizing Teamsters and retirees to take on the Central States Pension Fund directly.

We are prepared to hold pension organizing meetings around the country to inform and mobilize Teamsters and retirees.

Click here to join our Campaign for Pension Justice.

Our pension funds have been run down by Wall Street and the Hoffa administration. Retirees shouldn’t pay the price for their failures. 

December 15, 2014: The lame duck Congress has attached pension cut legislation to the end-of-year spending bill that will pave the way for the worst pension cuts in Teamster history.

Leave it to UPS to find a way to make billions off this disaster.

UPS lobbyists fought for and won a special interest loophole that shifts $2 billion in the company’s pension responsibilities on to the backs of Teamster retirees in the Central States. These retirees will now face even bigger pension cuts as a result.

UPS is the one and only company that benefits from the loophole on pages 81-82. Its purpose is to ensure that the Central States Pension Fund will not reduce the pensions of UPS workers who retired after January 1, 2008.

Not reducing pensions. Isn’t that a good thing? Of course! But UPS retirees in the Central States are already protected from having their pensions reduced.

In the case of any pension cuts by Central States, Article 34, Section 1 of the UPS master agreement, requires the company to make up any lost pension benefits.

UPS’s special interest loophole means the company won’t have to make up for any pension cuts. The loophole doesn’t save UPS retirees a dime, but UPS will save a fortune.

Teamster retirees and their widows will face $2 billion more in pension cuts so UPS can get out of paying the obligations it agreed to in the contact.

What can Brown do for you? Certainly, not this.

The devastating pension reform crammed into the omnibus spending bill that will likely soon become law would allow pension trustees to slash the benefits of retired workers and cut future benefits for a shrinking pool of middle-income employees.

These people were and are the backbone of our nation’s economy. They drive trucks, mine coal, haul bricks and bag groceries. Corporations have been weaseling out of guarantees for future retirees for years, but promises to current retirees generally have been sacrosanct.

Most of these employees contributed what was expected of them over their working lifetimes and retired — or hope to — with a well-earned nest egg.

The plans that will be affected are know as multiemployer pension plans. They typically involve union workers who are allowed to accrue benefits while changing employers, with each employer contributing to the plan.

About 1,400 such plans currently cover about 10 million workers, and most of the plans are solvent. Between 150 and 200 of them, covering roughly 1.5 million workers, are not. They could run out of funds within the next 20 years, according to the Pension Rights Center.

It’s those pension plans that the legislation aims to benefit. The Pension Benefit Guaranty Corp., an agency set up 40 years ago to guarantee those pensions, says it may run out of money to pay them in 2018, and is certain to be broke by 2025.

Hence the emergency. While it is important to help prevent these plans from becoming insolvent, pension advocates say the deal Congress worked out in haste and then attached to the $1.1 trillion budget bill funding all of government is the wrong way to do it.

That politicians are willing to eviscerate labor law safeguards that have been in place since 1974 under the Employee Retirement Income Security Act, known by its acronym, ERISA, is a sign of what little value they place on the futures of the hard-working men and women of Main Street.

Because the plans generally benefit union members, they are not popular with congressional Republicans. Union political influence has been waning for years and some of the plans — such as the Central States Teamsters fund — have a history that includes legendary levels of corruption. Even though that was generations ago, it’s enough to give cover to grandstanding lawmakers who want to look like they have a legitimate reason to vote against older, middle-class workers.

Selling out these workers is the wrong message to send to future retirees. The baby boomers now retiring may be the last generation of Americans to leave work assured of adequate income in old age. It’s not just the 1 percent who deserve security.

More than a million retired and current truck drivers, construction workers and other union workers could see their pension benefits cut now that Congress passed a proposal aimed at shoring up some of the nation's biggest pensions.

Tacked on as an amendment to the government's $1.1 trillion spending bill, the proposal was approved by the Senate late Saturday night.

While those sponsoring the pension proposal say it is "the only available option" to save failing multiemployer pension plans, other groups -- like the AARP and the Pension Rights Center -- are crying foul.

Multiemployer pension plans cover more than 10 million workers and retirees in the trucking, manufacturing and other industries. But many of these plans have struggled in the last decade as they grapple with an aging workforce and major investment losses from the recession. Plus, many larger employers have pulled out of the plans.

That has put a major strain on the Pension Benefit Guaranty Corporation, the government agency that insures pension plans, which last month said its reserves are dangerously low.

The Congressional proposal would allow plans that are projected to run out of money in the next 10 to 20 years to cut the benefits they pay to both current and future retirees. Benefits would not be cut for disabled pensioners or those 80 years and older, while cuts would be lessened for those between 75 and 80.

The PBGC projects that more than 10% of the roughly 1,400 multiemployer pension plans, which cover more than 1 million workers and retirees, currently meet this criteria.

Under current law, cutting the benefits of those who are already retired is off-limits. Instead, troubled multiemployer plans can take other actions, like reducing the benefits employees earn going forward and raising employee and employer contributions to the plan.

If the Congressional plan passes, cuts would require participant and government approval first, although the largest troubled plans could slash benefits even if retirees vote against it.

Retired truck driver Glenn Nicodemus, 64, receives his pension checks from the Central States Southeast and Southwest Areas Pension Fund, which is struggling to cover more than 300,000 retirees, widows and others.

Under the Congressional proposal, Nicodemus could see his annual benefits plummet from around $40,000 a year to as little as $15,000.

"I am disappointed in the fact that such an important matter is being done is such an underhanded way with little or no discussion of the consequences to millions who will be effected," he said.

Groups like the AARP, the Pension Rights Center and some worker unions say that retirees like Nicodemus are counting on their pension benefits, which they paid for through decades of contributions, and that other measures should be taken to save plans like Central States.

But supporters of the legislation counter that allowing for benefit cuts -- along with other changes included in the legislation, like allowing troubled plans to merge with healthier plans and doubling the insurance premiums employers pay the PBGC -- will help preserve the plans for both retirees and current workers.

One Cleveland plan, for example, has said it would only need to cut current benefits by 10% in order to prevent insolvency, said Randy DeFrehn, executive director of a coalition of employers and labor unions that crafted the proposal the legislation is based on.

Without any cuts now, he said that plan expects to run out of money by 2028, at which point all participants would see their benefits cut by 50% or more.

That's because if a multiemployer plan goes insolvent, a retiree is guaranteed less than $13,000 a year. In contrast, a retiree in a single employer plan that goes bust is insured for up to $60,000.

To make matters worse, the PBGC's multiemployer insurance program is itself projected to run out of money in the next decade unless changes are made -- meaning that workers and retirees in failing plans could be left with no benefits at all.

UPDATED December 16, 2014: Get answers on the pension cut deal and what it means for you.

The ink is still drying on the pension cut deal that was attached in the dead of night to Congress's spending bill. Some questions can be answered now. We will update with new information as it becomes available.

Does this bill mandate pension cuts?

No. This bill permits “deeply troubled” pension plans, those which could become insolvent over the next 15-20 years, to cut already-earned pensions of retirees and active workers. These cuts will be up to the trustees of the pension fund; the trustees are 50% union officials, and 50% management reps. No cuts will go into effect immediately.

The Central States Fund states that "it is likely that it would take up to a year, before modifications [pension cuts] if any, take effect." 

Could this affect other Teamsters, or just those in the Central States Pension Fund?

Most Teamster funds will be unaffected. The Western Conference Fund is in the “green zone.” Other large Teamster funds, such as New England, Local 705, Local 710, Local 804, Local 177, Joint Council 83, and most others will be unaffected, even if they are in the “red zone.” For example, Local 804 just won significant pension benefit increases in their recent contract.

Certain deeply troubled small Teamster funds may be affected. New York Local 707’s pension fund is nearly insolvent, as freight jobs dried up, and their biggest employer YRC got concessions to drastically cut their contributions to all pension funds. So we expect the Local 707 Fund to consider pension cuts.

While the cuts may only hit some Teamsters now, this attack on workers’ pensions could affect all Teamsters eventually – and we are all in this fight for pension justice.

How will it affect Teamsters in the Central States Fund?

The Director of the Fund, Thomas Nyhan, was a principal lobbying force for this bill, and has stated that CSPF will impose cuts on retirees and active Teamsters. The Trustees of the fund, who are 50% management and 50% Teamster officials politically aligned with Hoffa, support the bill and support cutting pensions. They will make the decisions – we will demand accountability.

Have Central States officials indicated how much they will cut?

In the past, Al Nelson, the Benefit Services Director of Central States, stated that a cut of about 30% would be what is needed.

But now the legislation has changed that. It requires that workers (so-called “orphans”) who retired from companies that went bankrupt (such as CF, Allied Systems, Preston, or Hostess, for example) be cut first and hardest.

This horrendous language is contained on page 81 of the pension legislation.

At this point, no one knows what the cuts will be, because we do not know how this legislation will be interpreted or applied. The next move will be by the Central States trustees.

The legislation also has protective language for some retirees: those over 80, those receiving only a disability pension, and to a partial degree, those who are 75-80.  

How will this affect UPS retirees in the Central States Fund?

UPS bought enough influence in Congress to save an estimated $2 billion through a special interest loophole that shifts the company's cost burdens on to Teamster retirees who will face additional pension cuts as a result.

On pages 81-82 of the pension legislation there is a loophole dedicated to exactly one corporation, UPS. This loophole means that CSPF will probably not be able to cut the pensions of UPS workers who retired after January 1, 2008, because they are “Priority 3” in order of cuts (the best priority).  

UPS retirees do not benefit one cent from this loophole because their pensions are already protected by the contract. Article 34, Section 1 of the current UPS master agreement, requires UPS to make up the full pension to UPSers if CSPF imposes cuts.  

UPS's special interest loophole means the company won't have to make up for any pension cuts. As a result, all non-UPS retirees will face $2 billion more in pension cuts. Retirees are footing the bill so that UPS doesn't have to pay the obligations it agreed to in the contract.

It is not known if the "UPS Exemption" also covers UPS Teamsters who retired from Central States before January 1, 2008.  These Teamster retirees deserve to know their status and if they may face pension cuts.

Will Teamsters and retirees get a vote prior to any cuts?

A ‘fact sheet’ issued by the bills sponsors claims that workers and retirees will get a vote before cuts could be made. But this is no fair vote.

First, those in Central States can have their vote overruled, because it is a large fund and its failure could seriously impact the Pension Benefit Guaranty Corporation (PBGC). 

To add insult to injury: a majority of all participants – not just voters – would be required for a No result.

Who gets to vote?

It is our understanding that all participants would get to vote: retirees and working Teamsters. Even if the vote can be overruled – as explained above – it can be a very important tool for us to organize and unite Teamsters and retirees, and we plan to use it.

If Central States makes these cuts, will the fund be secure?

Certainly slashing the benefits would improve the bottom line. But in the long run a pension plan needs contributing employers, and here is where the Hoffa administration has failed badly. They severely undermined the Fund by letting UPS pull out 45,000 participants, and they have not organized new companies into the fund. Central States set up a special “hybrid” kind of plan to allow new companies to join the fund with zero withdrawal liability. It was designed for organizing. But it has not been used for new companies. That has to change.

Will Hoffa and Central States officials have to take cuts?

Thomas Nyhan, the fund director, is paid $662,060, so he probably isn’t worried about any pension cut. Neither is Hoffa: he is in the lucrative Family Protection Plan, which covers only International officials and staff, and pays far more than a working Teamster could dream of collecting.

Central States has restrictive reemployment rules. Can we get those lifted?

If pensions as slashed, many Central States and other retirees will need to return to work, and we will demand that Central States revise its reemployment rules for anyone subject to pension cuts.

Can we file a suit and overturn this?

This law was passed by the US Congress. It is highly unlikely it would be found to violate the US Constitution, which does not guarantee anyone a pension. But, as reported on the national conference call by the attorneys, we will pursue all legal avenues to curtail damage done to retirees. Our effort will be on-going.

What’s next for fighting back?

We are moving forward with Campaign for Pension Justice which we invite you to join. We will continue to partner with allies to fight this law and to demand accountability from any Teamster plan that seeks to slash pensions.

What can we do to get rid of the Hoffa leadership?

We are starting now to build for a new leadership in 2016. We are fed up with Hoffa’s lies, excuses and cover-ups.  If you agree, join us to help make it happen.

The Pension Rights Center’s backgrounder on the pension-cut bill.