PAGE 4 | March 4 , 2016 | NORTHWEST LABOR PRESS
NATIONAL
Teamsters retirees fight plan to cut Central States Pension benefits
tiree meeting in Duluth to say
By Larry Sillanpa
Editor, Duluth Labor World
he’s in their fight with them.
The head of Central States
DULUTH, Minn. (PAI) — A
supports
the application for ben-
half mile from their union hall,
efit
cuts,
but
Teamsters President
over 220 retired members of
Jim
Hoffa
Jr.
doesn’t. Hoffa
Teamsters Local 346 gathered at
strongly
supports
legislation (S.
Holy Family Catholic Church in
1631)
introduced
last year by
Duluth Jan. 21 to fight for their
U.S.
Sen.
Bernie
Sanders
(I-Vt.),
pensions.
and
U.S.
Representatives
Nolan
But it’s not just a Teamsters
and
Marcy
Kaptur
(D-Ohio)
to
fight. As many as 200 multi-em-
undo
the
Multi-Employer
Pen-
ployer pension funds covering
1.5 million American workers sion Reform Act. So do several
other unions, notably the Ma-
could be in jeopardy.
The Multi-Employer Pension chinists. They argued hard
Reform Act (MPRA) of 2014, against the law before Congress
signed into law as part of the approved it.
Retired Teamster Local 346
omnibus spending bill, gives
Secretary-Treasurer
Sherm Li-
trustees of underfunded pension
imatainen
—
part
of
the
Duluth
plans the green light to cut pen-
area’s
leadership
group
fighting
sion payouts for current retirees
— in order to save the funds go- the pension cuts — has traveled
to Ohio, Illinois, and Wisconsin
ing forward.
Decades ago, the Teamsters to help the fight-back effort.
“We have been betrayed by
Central States Pension Fund was
our
fiduciary agents,” Li-
one of the best union pension
imatainen
told the Duluth gath-
funds in the nation. Teamsters
ering.
“[The
Central States
were retiring after 30 years of
trustees] failed
service to a
to protect us
signatory em-
from
Wall
ployer and
Street
preda-
“We
told
them
to
let
taking home
tors.”
wage increases go, and
pensions in
Liimatainen
the $3,000-a-
put everything they
said
Wall Street
month range.
could into their pensions
firms
charged
Central States
so they’d have secure
exorbitant
fees
trustees say
retirements,
”
Radzak
said.
and
then
used
those days are
Teamster pen-
“And look what they got
over:
The
sion funds to
for it. It’s just not right.”
Chicago-
shore up weak
based fund
– Retired Teamsters Local 346
funds that they
has been in
Secy.-Treasurer Pat Radzak
(the firms) had
“critical” sta-
created for their
tus for some
rich VIP in-
time.
vestors. Now
In October, trustees notified
Central
States
trustees
are telling
273,000 retirees in 38 states that
retirees
the
rescue
plan
is the one
their pensions would be cut by
and
only
solution.
Trustees
want
as much as 50 to 70 percent. The
retirees
to
vote
“yes”
for
it
in a
“rescue plan” will ultimately af-
“Participants’
Ratification
fect 400,000 Teamsters and will
decimate the pensions of many Process” that the Multi-Em-
young members working today. ployer Pension Reform Act re-
Trustees filed an application quires. Foes of the rescue plan
with the U.S. Treasury Depart- say the whole idea is bogus, be-
ment to begin cutting benefits cause no matter how retirees
for current and future Teamster vote, the Treasury Department
can go ahead and approve the
retirees on July 1, 2016.
pension
cuts. Plus, not voting is
To fight back, Teamster re-
considered
a “yes” vote, and
tiree chapters have created Com-
many
retirees
may not be
mittees to Protect Pensions.
healthy
enough,
or
technologi-
Committee members say it was
cally
savvy
enough,
to under-
Central States managers and
stand
what
is
happening
to their
trustees, the Wall Street fund
pensions.
managers they used, and the fed-
So the fight-back committees
eral government that fell asleep
are
asking retirees to sign peti-
at the wheel and caused most of
tions
against the plan and to vote
the pension fund’s financial
“no”
so
they could have legal sta-
problems.
tus
to
continue
to challenge the
Congressman Rick Nolan (D-
cuts.
The
committees
also cre-
Minn.) attended the Teamster re-
ated a Teamsters Pension Protec-
tion Hotline, 1-888-979-9806, to
allow retirees and members to
urge lawmakers to pressure the
Treasury Department to reject
the Central States application.
Workers’ pension committee
members also say the Central
States trustees allowed many
employers to not make full pen-
sion contributions by creating a
“distressed employer” provision
— and they didn’t offset those
losses. The committees are call-
ing for Central States trustees to
resign — and thy want a federal
investigation into how things
got so bad.
Under a 1989 consent decree,
the government looked over
everything the Teamsters did af-
ter mob-related connections and
illegal activity were uncovered.
The consent decree was lifted
just a year ago, ending 25 years
of government supervision of
the Teamsters. Retiree commit-
tee members say the oversight
flopped. They also fault the US.
Department of Labor, the Treas-
ury Department, and the Pension
Benefit Guaranty Corporation
(PBGC) for poor oversight.
The PBGC was created in
1974 as part of the Employee
Retirement Income Security Act
(ERISA), a federal law that sets
minimum standards for most
pension and health plans in pri-
vate industry to provide protec-
tion for individuals in the plans.
PBGC is supposed to protect
pensions, but is almost insolvent
itself. The agency’s looming fi-
nancial crunch allows Central
States trustees to argue that
PBGC will be insolvent at the
same time as their pension fund
—in what the retirees call an-
other excuse for the need for
their “rescue plan.”
Just in recent U.S. history, the
federal government has bailed
out savings and loans, Fannie
Mae, Freddie Mac, the auto in-
dustry, and Wall Street (“too big
to fail”) banks. And it was the
federal government that allowed
PBGC to operate undercapital-
140
Cuts coming to some union pensions
Under the Multi-Employer Pension
Reform Act of 2014, trustees of severely
distressed multi-employer pension plans
can reduce benefits for current and future
retirees — if doing so can save the plan
from future insolvency. Plans are allowed
to cut benefits if they’re forecasted to run
out of money within 15 years (or 20 years
if they have more than twice as many
retirees as active workers). Benefits can’t
be cut at all for retirees aged 80 or over, or
who are receiving a disability pension,
and retirees ages 75 to 79 are subject to
smaller cuts than those under 75. And
trustees are required to start the cuts with
those whose employers went out of
business or otherwise withdrew from the
plan without paying all of their
ized for 40 years, jeopardizing
the retirement security of the
taxpaying American workers it
was created to protect.
“We can fix this thing,” Con-
gressman Nolan told the Local
346 retirees in Duluth. “By God,
if we found a way to fix Wall
Street when they needed it, we
can fix the pensions of those
who paid into them.”
Nolan, Kaptur and 16 other
House Democrats are urging
Treasury to reject the Central
States rescue plan. They are
pushing the Keep Our Pension
Promises Act (HR2844) to re-
peal the Multi-Employer Pen-
sion Reform Act and shore up
the PBGC by closing two tax
loopholes used almost entirely
by wealthy estates to reduce
their tax burdens.
obligations. Trustees can’t cut benefits
more than the amount needed to prevent
insolvency. And no benefits can be cut
below 110 percent of the amount
guaranteed by the Pension Benefit
Guaranty Corporation (PBGC) — its
maximum benefit is $1,072.50 a month
for a retiree with 30 years of service.
The Treasury Department has received
applications under the MPRA from Teamster
Local 469 Pension Fund in New Jersey, and
Iron Workers Local 17 Pension Fund of Ohio.
The Pension Rights Center, an advocacy
group, maintains a list of multiemployer
plans that have notified the federal govern-
ment that they are in “critical and declining”
status, and could file proposals to reduce
benefits. It currently has 52 entries.
Another bill, the Pension Ac-
countability Act (S2147,
HR4029) would restore fairness
and credibility in the voting
process for pension cuts that
may be proposed by plans.
Pat Radzak, retired secretary-
treasurer of Teamsters Local
346, said he was sick about what
was happening to their retirees.
“We told them forever to let
wage increases go and put
everything they could into their
pensions so they’d have secure
retirements,” Radzak said. “And
look what they got for it. It’s just
not right.”
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