Hooray: The Teamsters retirees won. Or did they?
July 1 would have brought pension cuts of as much as half to some of the union’s retirees and others covered by the Central States Pension Fund. The fund said without cuts they project that the plan’s funds will be gone in a decade and pensioners will receive zilch.
The U.S. Treasury Department halted the pension fund’s plan to cut benefits, declaring their projections unproven, the cuts to participants uneven and the rationale for cuts unclear. While the retirement plan may not have followed the Multiemployer Pension Reform Act’s mandate that those three issues be addressed, the plan remains insolvent.
Central States is in trouble because their investments are not doing as well as projected — the trouble with many pensions in recent years. Also, pensioners are living longer than projected. Add to that some ridiculously low premiums — $13 a year until the new law bumped it to $27 this year — and there’s simply too little in, too much out and for too long per retiree and spouse.
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The plan also can’t rely on the feds for a bailout: The federal Pension Benefit Guarantee Corp., tasked with backing up pensions such as Central States, is itself $76.3 billion in the red.
So Teamsters retirees should enjoy the moment. They dodged a bullet, but the war is far from over.