Teamsters Protest as Treasury Debates Allowing Pension Cuts for 1.5 Million Retirees

[marmar]

(In These Times) About 300 angry Teamsters descended on Washington, D.C., September 10, demanding federal action to protect the pensions of union members threatened with benefit cuts. The retired Teamsters are among a group of as many as 1.5 million retirees from a long list of different labor unions nationwide that could see their pensions slashed under a new law quietly approved late last year.

The immediate target of the angry Teamsters was the U.S. Department of the Treasury, which is in charge of administering the new law, the Multiemployer Pension Reform Act of 2014 (MPRA). Government officials sponsored the first-ever public hearing on MPRA last week, and the retired workers swarmed the meeting to make it clear they are alarmed and unhappy at the likelihood that the Teamsters Central States Pension Fund is at the top of the list for cuts.

“We’re turning up the heat, and we are going to keep turning up the heat higher and higher” on federal officials and lawmakers, says Bob Amsden, a retired truck driver from the Milwaukee area who has emerged as a high-profile advocate for Teamster pensioners.

Amsden and other union members face cuts because MPRA allows pension fund trustees new freedom to reduce promised benefits in cases where the long-term solvency of the fund is in danger. Under MPRA, any such cuts must be approved by the Treasury Department first, and government officials are currently in the process of writing the rules and regulations of the approval process. ..................(more)

http://inthesetimes.com/working/entry/18420/MPRA-pension-cuts-teamsters-bernie-sanders

[MichMan]

1. Teamsters were the ones lobbying for it

This change that is being protested was enacted as part of the Omnibus Spending bill last Dec. and signed by the POTUS. The Central States Plan is administered by the Teamsters and is currently underfunded for the promised benefit levels and the number of retirees.

The provision that allows pensions to be cut was lobbied for by the Teamsters themselves as they are the ones who would have to provide the funding to make it whole. It was passed with substantial bipartisan support.

Now that the retirees are understandably livid, Hoffa is back peddling and acting like he was against it the entire time.

[Babel_17]

2. Yeah, it isn't as simple as it appears

Unions that were more expertly managed before, during, and after, the financial meltdown have to kick into a fund that is getting drained by less solvent pensions. They dread having the fund go dry and having to pay more.

Long story short, during the financial crisis lots of locals experienced a downturn in money coming in, an upturn in people retiring, and a brutal beating to their investments. Having to meet their pension payments, they had to sell assets and thus they set up a death spiral for their pension funds. Had the economy not taken such a beating, or recovered faster, or their investments been a tad less risky, they might have pulled through.

I'm simplifying and over generalizing but that's my impression of the matter. I wish pension funds could have a class action against those behind the crash. Though probably they'd in effect be suing the very groups they have investments in.

What a mess things were/are in. It could have been worse. Had President Obama not managed to push back against the collapse many, many, more pensions would be in a similar situation. Having to sell off your investments to meet obligations quickly leads to insolvency. My Union Local was pretty conservative in their investments, we use Prudential afaik, and we took a hard beating that only now have we basically fully recovered from. Other Union Locals in my area are still in the Yellow Zone. And for a while they were teetering on having to take drastic measures.