NORTHWEST LABOR PRESS | May 20, 2016 | PAGE 7
Treasury rejects Teamster pension cuts
The proposed pension cuts to
300,000 retirees are unfair and
confusing — and not deep
enough to prevent insolvency.
The U.S. Treasury Department
has rejected a plan by the Team-
sters Central States Pension
Fund to reduce retiree pension
benefits in order to save the plan
itself from insolvency.
Until last year, no union-
sponsored multi-employer pen-
sion plan was allowed to reduce
benefits for workers who had al-
ready retired and were collect-
ing pension benefits. If a pen-
sion fund was headed for
insolvency, it was required to
spend down its assets, at which
point the Pension Benefit Guar-
anty Corporation (PBGC) — a
federal government insurance
program — would step in with
resources to pay a reduced ben-
efit. But pension investment
losses in the 2008 financial mar-
ket meltdown created a crisis,
particularly in funds in declining
industries that had more retirees
than active members, and that
crisis threatened to make PBGC
itself insolvent. Rather than bail
out the PBGC with taxpayer
dollars like it bailed out the
banks, Congress passed a law in
December 2014 that allowed
pension trustees to trim some re-
tiree benefits — if that could
prevent the funds themselves
from failing.
The law, the Kline-Miller
Multi-employer Pension Re-
form Act, was tacked onto an
omnibus spending bill and
passed without a hearing and
with less than seven minutes of
debate. The way the law works,
pension funds can’t cut benefits
for those over 85, and they can’t
cut below the benefit level
PBGC would have provided,
but they also have to cut benefits
enough to save the fund. The
cuts have to be approved by the
Treasury Department, and then
pension plan participants also
get a chance to reject it through
a vote.
The Central States Pension
Fund — covering Teamsters in
an area stretching from New
York to Texas — is by far the
biggest failing pension plan,
with 411,000 participants. It has
$16.1 billion in assets, but it’s
spending $2 billion a year more
on benefits than it takes in from
active employers, so it’s on track
to run out of money in 10 years
or less. It was the first to seek to
use the new legal authority to
cut benefits. Its proposal would
have cut benefits for about
270,000 people. Cuts would
have averaged about 23 percent,
but some retirees receiving over
$2,700 a month were slated to
lose as much as $1,500 a month.
But on May 6, Treasury Spe-
cial Master Kenneth Feinberg,
who was appointed to review
proposed benefits cuts under the
new law, rejected the Central
States trustees’ cuts proposal.
Feinberg cited three reasons for
rejecting the application: The
cuts weren’t equitably distrib-
uted; the notices sent to partici-
pants weren’t comprehensible to
an average person; and the pro-
posal used unreasonably high
assumptions about future invest-
ment returns (7.5 percent a
year), so that the cuts would not
guarantee the plan’s long-term
survival.
The rejection was cause for
celebration among affected
Teamster retirees. Retired Team-
sters throughout the country had
formed more than 60 regional
committees to oppose the pro-
posed cuts, and to urge Con-
gress and the Treasury Depart-
ment to prevent the cuts.
OTHER UNION PENSION
PLANS THAT HAVE
APPLIED TO CUT BENEFITS
Iron Workers Local 17 Pension
Cleveland – 2,067 participants
Teamsters Local 469 Pension
New Jersey – 1,803 participants
Road Carriers Local 707 Pension
New York – 4,664 participants
Iron Workers Local 16 Pension
Baltimore - 1,119 participants
COMMUNITY SERVICE
LETTER CARRIERS FOOD DRIVE. John Vandermosten, a retired electrician
and member of IBEW Local 48, collects food at the Gresham Post Office May
14, part of the national “Stamp Out Hunger” food drive sponsored by the
National Association of Letter Carriers, AFL-CIO. Pictured alongside him (left)
is Stephanie Nystrom of the East Suburban Democrats, which sent a group
of volunteers to help sort and load food. The Gresham Post Office collected
approximately 34,000 pounds of food. Union members from various locals
volunteered at other post offices throughout the state.
Unionists help stamp out hunger
Some 4,000 letter carriers in Ore-
gon and Southwest Washington
took part in the 24th annual Na-
tional Association of Letter Car-
riers (NALC) Stamp Out Hunger
Food Drive May 14. The food
drive is held in 10,000 cities and
towns in all 50 states, the District
of Columbia, Puerto Rico, the
Virgin Islands and Guam. Nearly
1,500 NALC branches are in-
volved, including Branch 82 in
Portland. Food collected locally
is distributed by the Oregon Food
Bank. Totals weren’t available at
press time, but Oregon typically
collects about 1.1 million pounds.
“We are grateful to everyone
who participates, and the hun-
dreds of letter carriers who give
their time to make this event hap-
pen,” said Oregon Food Bank
CEO Susannah Morgan.
The food drive’s national part-
ners are the U.S. Postal Service,
the National Rural Letter Carri-
ers’ Association, United Food and
Commercial Workers, United
Way Worldwide, the AFL-CIO,
and Valassis.
retirees begin contributing to
health insurance premiums for
the first time.
To publicize the strike nation-
wide, CWA and IBEW called
for a day of action May 5, and
reported that more than 400
protests took place that day at
Verizon locations in dozens of
cities. CWA Local 7901 presi-
dent Jeannette Turner says
CWA’s international union is di-
recting each local to target a par-
ticular wireless store for picket-
ing. Portland Jobs With Justice
will be coordinating support ac-
tions in the Portland area,
Turner said. Portland Jobs With
Justice executive director Diana
Pei Wu says there will be a
picket outside the downtown
Verizon Wireless Store, 616 SW
Broadway, every Thursday from
3 to 5 p.m. CWA and IBEW are
asking people to not shop at Ver-
izon Wireless stores when pick-
ets are up, and they’re consider-
ing announcing a nationwide
boycott of Verizon Wireless.
Company health care benefits
were cut off as of May 1, but the
unions say they won’t let mem-
bers fall through the cracks.
CWA has a $441 million strike
fund built with member contri-
butions. CWA members began
receiving $200 a week after two
weeks on strike, and $300 a
week after three weeks; strike
benefits will top out at $400 a
week after the eighth week.
The unions also have a joint
fund to assist striking members
whose families have special
needs or very difficult financial
circumstances. Portland-head-
quartered IBEW Local 48 con-
tributed $5,000. Members of the
public can contribute to the fund
at StandUpToVerizon.com/soli-
darity or by sending a check to
Verizon Striking Families Soli-
darity Fund, c/o CWA, 501 3rd
Street, NW, Washington, D.C.
...Verizon strike goes national
From Page 1
ous CWA and IBEW contracts).
In a video on a company “la-
bor facts” website, Verizon chief
administrative office Marc Reed
outlines Verizon’s April 28 “last
best final offer,” but doesn’t talk
about concessions. Reed says
Verizon wants to “[position] the
business for future success,” and
emphasizes the company pro-
posal for a 7.5 percent wage in-
crease over three years. But
CWA spokesperson Candice
Johnson says the strike isn’t
about wages: The quality and
security of members’ jobs are
the most important issues.
Johnson said members are
tired of mandatory overtime and
of being forced to work far
away from their families. And
they’re concerned about Verizon
moving more jobs to overseas
call centers in the Philippines,
Mexico, and elsewhere. Verizon
is proposing to close 17 mostly
small call centers and offer
workers assistance to relocate.
Before deciding to strike,
CWA and IBEW bargained to-
gether for 10 months, well past
the Aug. 1, 2015, expiration of
their previous contracts.
Verizon’s decision to con-
tinue operating during the strike
has contributed to some boister-
ous picket lines. The company
says it trained at least 15,000 of
its 120,000 nonunion employees
to take over union member du-
ties. Verizon provided a smart-
phone app to nonunion employ-
ees that allows them to take
photos documenting time and
location for forwarding to Veri-
zon corporate security, along
with an incident report. CWA
reported that in Gaithersburg,
Maryland, a Verizon lawyer
struck two picketers with his
Porsche, and one required med-
ical attention. The company
also says that 1,000 workers
crossed the picket lines and re-
turned to work, but CWA dis-
putes that.
Nearly all the strikers are in
Verizon’s East Coast copper and
fiber landline operations, but
Verizon is probably better
known as the largest wireless
phone service provider in the
United States. The company’s
wireless side is entirely
nonunion except for Verizon
Wireless retail workers in
Brooklyn, New York, and
Everett, Massachusetts. They
voted to join CWA in 2014 but
never got a first union contract,
and are also taking part in the
strike.
The strike is the third one
since Verizon formed in 2000
out of the merger of Bell At-
lantic/NYNEX and GTE. The
most recent strike, in 2012,
lasted 13 days and ended with
concessions from union work-
ers, including no pension for
new hires, just a 401(k); and a
requirement that workers and