Scrooge Lives: Taxpayer Bailout of Underfunded Teamsters Pension Funds

[abelenkpe]

Beware the Taxpayer Bailout of Underfunded Teamsters Pension Funds

http://globaleconomicanalysis.blogspot.com/2009/12/beware-taxpayer-bailout-of-underfunded.html

This was going to be a "quick" post on the pending bankruptcy of YRC, the nation's largest trucking company.

Instead, I have been digging around for several hours as the story morphed into a spiderweb of pension obligations culminating in a Ponzi scheme sponsored by representative Pomeroy to bailout private pension plans at taxpayer expense.



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Mish reports on a trucking company on the verge of bankruptcy and relishes the possibility that the pension plan will go bust leaving workers out in the cold. He encourages readers to contact their reps to stop a bailout of the pension plan too.

OK, I'm no fan of bailouts. I don't think large banks or corporations should have been bailed out. However, pension plans should be honored. What kind of society are we that we would have workers labor their entire lives under the promise of a pension and then rip the rug out from under them when they are least fit to fend for themselves? Why punish workers and not go after the real culprits: those who made risky loans and did a poor job of managing the pension plan? This bailout should be supported. Please don't let wack job libertarians be the only one raising their voice over this issue. Support workers and their pension plans and let your representatives know your views.

[Prism]

1. My dad works for YRC

It's a complete mess. He's more or less being forced into retirement. Come the end of this month, he will be gone.

However, his pension is utterly hosed.

Basically, he's been told he has to cough up $6300 by Dec. 31st or he will receive $1200 less per month during his retirement.

Suffice to say, he cannot come up with $6300 just like that. Suffice to say, my parents will be spending their retirement living paycheck to paycheck.

After decades of loyal service to that company and loyal membership in the union, this is what it's coming down to. My brother and I have been trying everything we can to secure the money he needs by the end of the month, but it's looking highly doubtful.

We're sick over this. My parents are not physically well people, and this is just one more thing on them. Very stressful.

[bikesein]

2. Is there a guarantee

that the $6,300 will secure his pension? I would be careful about throwing good money after bad. If they default on the initial pension, what would stop them from keeping the $6,300 and saying sorry, that is lost too?

[Prism]

3. That's what we're wondering

Everything with the company is very up in the air. They recently closed a facility in the south Chicago burbs and didn't tell the employees whether or not they even had jobs until the very last minute. When the company dropped contributions to the pension, everyone was caught off guard. Between the pension and Social Security, my parents had been expecting a decent retirement. No major vacations, but for the first time in their lives, they wouldn't be living hand to mouth.

Now, we're worried they'll have to continue working. They're just not healthy enough to sit there and work themselves to death.

There was a guarantee as of last month that $6300 would secure the higher pension. Without it, my dad will still receive a pension, but it will be $1200 less per month. Frankly, I don't believe anything this company says. It changes from week to week. Everyone should've seen this coming ages ago, and yet, everyone's acting so surprised. Meanwhile, the workers get hosed.

[abelenkpe]

4. I am so sorry

to hear that. I hope you can get the money together. It does seem fishy that they are demanding money from him. Have you contacted a lawyer to check on the legitimacy of such a request?

This is the bill proposed to prop up pension plans:

H.R.3936 - Preserve Benefits and Jobs Act of 2009

Would it help your father?

[Prism]

5. I'm not sure about the bill

YRC's pension funds are a complete mess because of all the companies they bought-out, absorbed, etc. They're responsible for all kinds of pensions from now defunct companies. Basically, the pension has been a ticking time bomb they've known about for years. I'm not sure if they'd qualify under that bill. Here's hoping, eh?

As far as the $6300, it's apparently the gap left by the company's discontinuation of contributions to pensions.

[LiberalFighter]

6. Told by the company or Teamsters or someone else?

Now I've heard of employees buying out their pension I believe because they weren't at the retirement age for their pension plan.

I don't know how much time they gave your parents but if it was just a few days ago then it sucks. But, if $6,300 will get him $1,200 more a month in pension I would go for it.
Talk to a Teamster union rep and see if they have any suggestions on coming up with the money or other alternative.


If I was your father I would find out the details from the Teamsters and if possible talk to someone else that went through it.