Last Stand Against Pension Cut Deal
UPDATED December 13, 2014: There's still time to fight Congress's last-minute pension cut deal by calling and emailing your Senators today. Do it now. The vote could come Monday on the budget bill.
Click here to read AARP's letter of opposition.
Click here to read a Statement from the Pension Rights Center.
Click here to read a Statement by Senator Tom Harkin.
The proposed pension cuts amendment has now moved on to the Senate. They need to vote on it. We still have a chance to shoot down the earmark.
Our allies in Washington encourage the following:
Contact your Senators ASAP.
We need them to say NO to the earmark on pensions. The legislation was developed behind closed doors. The 163 pages have barely been seen and have not been debated. There has been no discussion of the earmarked legislation. This is not a consensus proposal and is opposed by AARP, the Pension Rights Center, The International Association of Machinists, The Teamsters, The Steelworkers, and other organizations.
Adding this earmark to the Funding Bill is a last minute maneuver to allow pension cuts that have been protected by ERISA for forty years. There is no reason to rush this through in this manner.
Steelworkers Union: Don't Pass Pension Cut Bill
Dear Member of Congress:
On behalf of the 1.2 million active and retired members of the United Steelworkers Union (USW), I urge you to oppose last minute legislation added to year-end spending legislation which will dramatically reform the multi-employer pension system and cut benefits to existing retirees. The lack of transparency and the inability to provide significant input into legislation which impacts close to 250,000 USW members and retirees in multi-employer pension plans is the wrong approach to former workers who deferred decades of wages into this retirement option.
The multi-employer pension system does need assistance to create long term stabilization and we applaud the efforts to craft a solution. However, the issue is a long term one. Many plans which are facing financial burdens have 10 years or more to find methods to fund the liabilities owed to participants. The proposal which from our understanding, dramatically reduces benefits to retirees in pay status is an extraordinary change to long standing ERISA “anti-cutback” rules and deserves intense scrutiny before being considered as a viable solution. Every effort should be made to find solutions that do not force retirees in pay status to bear the brunt of massive cuts when many employers who withdrew from these pension plans paid pennies on the dollar to get out.
Retirement Security for Americans is an issue that is intensifying in importance for our nation. The average working household has virtually no 2 retirement savings. When all households are included— not just households with retirement accounts —the median retirement account balance is $3,000 for all working-age households and $12,000 for near-retirement households. The failure of individual savings accounts to adequately prepare working Americans for retirement highlights the importance of well-run defined benefit plans, including multi-employer pension plans.
Belonging to a union, and participating in a defined benefit pension plan like a multi-employer pension is the best way to reverse the growing retirement security crisis. That is why USW opposes this last-minute, backroom deal that did not have adequate stakeholder engagement, will potentially force massive benefit cuts to retirees, and could undermine the full faith and promise of the entire pension system.
Sincerely,
A Teamster Letter to Congress
A report on the deal being made behind closed doors in Congress states that we should be happy that it will preserve some benefits.
Really....so I should be happy that I might get $1,200 a year more than what I would get if my plan went to the PBGC? I should be happy that I would LOSE $24,000 a year to get that!? Might as well take it all so I can get on every government program I can, maybe I can get free health care too!
So instead of the House and Senate considering other possible and feasible solutions presented by the like of AARP, The Pension Rights Center, Teamsters for Democratic Union, etc., so that I may support myself, the government would rather support me?! Have you looked at the 2014 US Census report to see how much money the elderly put back in the economy compared to the 50 and under? Did you read that 1/3 of all retirees have less than $1,000 in savings?
Senators and Congressman, wake up, look at the solutions presented by all, not just the NCCMP. Many of their members do not agree to this, take your time, do it right, let all the people you represent have a voice, not just big money. Since the big player in this is Central States Pension Fund and they say they may become insolvent in 12-15 years with their $18-19 billion dollars in their fund, is it really worth destroying peoples lives, the economy and costing the government, in the long run, when they have to enter into government programs to survive? Is it worth trying to push this through the House and Senate, on secret bills that only they know what they are attached to, in the 4 days left to meet, as opposed to an extension, to look and exhaust all solutions presented by all, not just one organization whose members are not all in agreement?
Maybe look into the funds themselves. Possibly they are mismanaged, possibly their trustees do not have the expertise to manage that much money. After all, why have so many recovered from the stock market crash under the current Pension Protection Act? Why are so many well funded at this time? Maybe they are mismanaged like some of the companies that contribute to them.
Congress, do the right thing, extend this, look at all not just one, if a fund says they have at least 12 years till they become insolvent, don’t ruin the lives of individuals and families in the next 4 meeting days.
Keep in mind that the retirees and active workers did not create the underfunded pension funds. Wasn’t it Wall Street, big banks and legislation against good paying jobs? So the retirees possibly have to carry the burden of their undermining?
Is this the country that I sacrificed my life for at the age of 18, in Vietnam, as a United States Marine, that 58,000 of my brothers gave the ultimate sacrifice for (and that’s just one war). Is this the country that is trying to keep people living longer with different health programs, medication, etc., but wants to dwindle down their fixed income to where many, if not the majority, will lose everything they worked for and will have no desire to live?
To all of the Senators and Congressmen/women that will be voting to change our lives drastically, consider this.....look at your income now, look at your expenses (food, house, car, medical, donations, children, grandchildren, vacations, maintenance, insurance, taxes, etc., etc.,....get the point?) and then look at your income again with the thought that you will never get a raise again, the rest of your life (fixed income). Now watch all the costs of your expenses rise every year while your income does not. Now take 30-65% of your fixed income away knowing you’ll never get it back, knowing you’re too old to get another job. Can you survive? Now watch someone vote to take your money away who has no clue what they are doing to you, who doesn’t even try to exhaust all solutions to avoid taking your income away, who just lets someone do that to you.
We The People....really?
Retired member of Akron Ohio Teamster Local 24
Will Hoffa Act NOW to Protect Teamster Pensions?
December 4, 2014: It is urgent that Teamster President Hoffa make a strong statement to all Senators and Congresspersons to defend Teamster pensions under attack.
This letter from the IAM President must not stand alone. We need the political weight of the IBT at this time.
Lame Duck Congress May Rush Pension Bill
December 4, 2014: Congress is nearing a vote on arguably the biggest change to private pension law in decades.
The proposed reforms would grant sweeping new authority to the trustees of some “deeply troubled” multi-employer pension plans to slash benefits promised to current retirees—something that’s illegal under existing law.
See what you can do to help head off this sneak attack.
Click here to read more at In These Times.
Act Now to Stop Sneak Attack to Cut Pensions
December 3, 2014: Behind closed doors, a handful of Congressional representatives are planning to pass a major change to federal pension law, by making a last-minute amendment to the omnibus budget bill which Congress must pass by December 11 to avoid a shutdown. You need to take action now to stop this sneak attack.
Does that seem like the right way to consider the future of pensions for hundreds of thousands of Teamsters and millions of Americans?
We say No.
And we are not alone. The AARP, the Pension Rights Center and some unions such as the International Association of Machinists are working hard to head-off this deal, so that hearings will be held on a proposed bill to consider amendments, improvements, and alternatives to it.
We need Teamster president James Hoffa to use the political weight of the Teamsters Union to help stop this sneak attack. You can email your request that Hoffa to call upon all congressional reps and senators to say No to junking the anti-cutback rule of ERISA by a sneaky deal. Put the millions of Teamster dollars given to politicians to good use, right now.
One year ago, Hoffa sent a letter to Congress on this issue. But a year-old letter is not what’s needed. Now is the time to press the case, with all the clout the Teamsters Union can muster. Call on Hoffa to take action.
This proposal has nothing to do with the federal budget. It has everything to do with the future of workers’ hard-earned pensions.
Alex Adams, a retired Teamster out of Cleveland Local 407 speaks for thousands of other Teamsters facing these cuts:
“I’ve been retired for ten years after working for over 36 years moving freight across the country. In 1980, due to government deregulation, many companies went out of business in the freight industry. I worked for ten companies at one time (on call) to make sure I stayed active to receive contributions into the pension. I earned my pension the hard way as I have a clear memory of giving up many possible wage increases so that money could go towards benefits.”
Because the deal is being done secretly, we don’t have all the terms of the proposed pension change. But it will allow “deeply troubled” pension plans—including the Central States Pension Fund—to slash existing pensions and those already vested. Central States officials have said the cuts will be about 30%.
We recognize that Central States and some other funds are in trouble, but Teamsters and retirees deserve an open discussion of the terms of the law, and possible protective amendments to it, before Congress rushes it through.
Contact your Congressperson and Senators. Tell them making a sneaky deal is no way to respect their constituents. Retirees and hard working Teamsters deserve better.
For more information:
Stop Congress from Cutting Retirees' Hard Earned Pensions
November 18, 2014: Unless we act now, Congress may end up cutting a legislative deal by year’s-end to allow pension plan trustees to slash the already-earned benefits of retirees as a purported way of saving deeply-troubled multiemployer plans.
This would be a radical departure from the federal pension law and it would wipe out the anti-cutback rule which states unequivocally that once a retiree starts receiving a pension – it cannot be taken away unless a plan becomes insolvent.
It is outrageous for Congress to contemplate allowing cuts in retirees’ benefits as a way of staving off insolvency, without exploring other options to preserve hard-earned pensions.
We all care deeply about the health of our pension plans, but we do not think that they should be allowed to balance their books on the backs of retirees who are most vulnerable.
Say no to retiree benefit cuts. Tell Congress there are other alternatives that must be explored to save multiemployer plans.
Tell Congress no backroom deals.
You can help by contacting your Senators and Congressional Representative in your state and Congressional district. You can also contact their Washington office. The Capitol Hill switchboard is (202) 224-3121 and ask to be connected to your representative.
Take Action. Have you signed the Protect Our Pensions petition yet? Click here.
Central States Extends YRC’s $100M Debt till 2019
August 15, 2014: The Central States Pension Fund has given YRCW an extension until 2019 to repay $109 million that YRC owes the pension fund. This was revealed in a filing with the Securities and Exchange Commission and in the 2014 First Quarter Report filed by the Independent Special Counsel on July 30.
That report, along with the Financial and Analytical Report obtained by TDU, indicates that the fund’s assets fell from $18.7 billion to $18.5 billion during the first quarter.
YRC has owed the $109 million to the fund since 2009, when it failed to make required payments, and has twice extended the deadline for making a balloon payment. The latest extension came by vote of the Central States union and management trustees in January, 2014. The trustees are reluctant to strain YRC’s weak finances. YRC makes interest payments of $550,000 per month.
While $109 million is small compared to the fund’s assets, it is still a very significant debt obligation to the troubled fund, as some YRC Teamsters and Central States retirees have already noted.
Central States lost $209 million in assets in the first quarter because the investment return of 1.7% could not keep up with pension payments.
Meanwhile, the Central States Health and Welfare Fund continues to run in the black and build up its outsized reserves. As its number of Teamster participants has more than doubled, with the addition of UPS part-time and full-time members, future reports will bear watching closely. Many UPS Teamsters recently put into the Central States Fund (TeamCare) are finding that certain benefits are falling short of promises made by the Hoffa-Hall administration.
Central States Fund: $18.7 Billion
June 20, 2014: The overdue year-end 2013 report on the Central States Pension Fund shows that it grew by $1 billion to $18.7 billion on the rising stock market. However the report stresses the fund trustees’ goal of changing federal law to allow them to cut the pensions of current retirees, and active Teamsters with earned vested pensions.
The Teamster officials who are trustees are at odds with the official position of the International Union, which is to oppose a bill to abolish the “anti-cutback” protections in federal law. The report states that the fund could be unable to make pension payments by 2026, as the justification for their stand.
CSPF Benefits Services Director Al Nelson recently called for 30% across the board cuts in present and future benefits.
Teamsters for a Democratic Union (TDU), along with the Pension Rights Center, the AARP, and several unions are calling for alternative positive action to support pensions, rather than drastic cuts. You can sign the petition to add your support, and you can find out more about this growing movement.
The 2013 report (submitted by the Independent Special Counsel (ISC)) notes that the fund grew by $1 billion in 2013 thanks to outsized stock market returns. The CSPF has 50% of its asset in three different unmanaged index funds, and those did especially well in 2013.
You can also read a copy of the 2013 Financial and Analytical Report on the Central States Pension and H&W Funds.
A disturbing note in the report concerns Allied Systems Holdings’ carhaul operation. Allied went bankrupt in a hedge-fund dispute. Jack Cooper then bought it, and most Allied Teamsters were able to follow their work (and maintain their pension benefits) to Jack Cooper. But the ISC report notes that Jack Cooper will not be assuming the $900 million withdrawal liability owed by Allied to the fund.
The Central States Health and Welfare Fund continues to operate in the black with its reserves topping $2 billion. The fund has 83,102 participants at the end of the year, but that number has now doubled with the addition of so many UPS and UPS Freight Teamsters.
Sign the Petition to Protect Our Pensions!
June 16, 2014: Teamsters, along with many other groups, are fighting back against a proposal Congress is considering to allow troubled pension funds – like the Central States Fund – to slash existing benefits. You can help by signing a petition to the U.S. House of Representatives Education and the Workforce Committee. Help preserve the federal anti-cutback law to protect our pensions.
Click here to sign the petition.
Call TDU: 313-842-2600 to get petitions to circulate in your area.
Pension Action Committees have formed in Northeast Ohio and the Twin Cities. If you want to form a committee in your area, click here.
To learn more about this threat and what you can do, click here.