All rights reserved. It'sreally a blessing, said Whitlow Wyatt, a retired truck driver from Washington Court House who receives a pension from Central States. More:Joe Biden's support of labor unions is historic. Check back for the latest news about the multiemployer pension crisis and our campaign to protect your pension benefits. However, experts with whom I spoke explained that this is not intended as a complete funding of all benefits due during the period, but only meant to fill in the gaps so that, added together with their current assets and future contributions, there will be enough funds to pay benefits for the next 30 years. And at the same time, these plans would be more poorly funded and therefore obliged to pay greater variable-rate premiums to the PBGC (which counts as government revenue), for another $7.2 billion. In early 2021, as part of his COVID-19 relief bill, Biden won approval of a multibillion-dollar fund to help the Pension Benefit Guaranty Corp. (PBGC), the federal government's insurer of last resort, shore up so-called multiemployer pension plans set up for union members that were under financial threat of failing. The Central States fund was due to go broke by 2025 without assistance, and many of its beneficiaries had already suffered cuts in their checks as a result of a 2014 law that allowed pension trustees to approve reductions in an effort to remain solvent. You can review the Funds latest quarterly report obtained by TDU and the latest report of the Independent Special Counsel for details on the Funds current status. Published Mar 8, 2021 The sweeping stimulus bill awaiting expected final passage by Congress sets aside $86 billion to rescue nearly 200 failing pension plans nationwide, guaranteeing full pensions for more than a million retirees and workers, including many in the Philadelphia area. "It's a backstop," said Neal, who sponsored the pension measure before it was folded into the American Rescue Plan Act. 5 min read. 6 talking about this. "The Republicans werent going to do it. A high point of this movement came in April 2016, when over two thousand retirees descended on the US Capitol to protest the draconian pension cuts of the MPRA. 'The . The Central States Pension Fund, according to the latest quarterly financial report, has $7.4 billion in assets, and continues to decline. Pension Benefit Guaranty Corporation Approves Central States' Application for Special Financial Assistance. WASHINGTON, March 6, 2021 /PRNewswire/ -- The Teamsters are elated over the Senate's approval of a $1.9 trillion COVID-19 stimulus measure containing a provision bolstering financially-troubled. At the time, they were pushing Washington to help with a less-generous loan program backed by Treasury bonds. This legislation allowed dramatic pension cuts (as much as 60 percent of benefits) for retirees enrolled in multiemployer pension plans that are financially troubled. It also gave plan trustees total control over how to allocate funds and barred retirees from being able to challenge them in court. Instead, the PBGC believed that the plain meaning of the statutory language is in fact this narrow interpretation. Flickr/cursedthing/cropped / CC BY-ND 2.0. And it ends with a yearslong campaign by his son, James P. Hoffa, to work the levers of influence in Washington to salvage the retirement money of union members. "Thought that we could really get something done and make a difference in people's lives and that . But sandwiched in the $1.9 trillion bill is significant pension relief the product of [], A journal of theory and strategy published by Jacobin, No One Should Be Able to Steal or Erode Workers Pensions, Taking Back Left Parties From the Brahmins, With Scores of Union Contracts Expiring, 2021 Can Be a Year of Mass Solidarity, The Pension-Fund Profiteers Are Making a Killing From Long-Term Care, We Need Unions to Organize Worker Fightback During the COVID-19 Crisis, The Teamster Revolt Against the Hoffa Era. House Ways and Means Committee Chairman Richard Neal, D-Mass., said during House consideration of the American Rescue Plan Act that he doesn't think of the pension provisions as a bailout. This is a BETA experience. The pension protection movement, led by our Teamster retirees, showed what grassroots lobbying could do with seven years of effort. Rank-and-file Teamsters held rallies, made hundreds of visits to elected officials, and made thousands of phone calls to ensure their pensions would be secure. About 185 plans would receive grants, according to the budget office. Instead of asking unions to address their pension liabilities through a loan program, Democrats saw an opportunity to inject tens of billions of dollars of relief into the multiemployer pensions to keep them solvent for the next few decades. The Fund filed an application on April 28 for $35.1 billion in a grant to protect Teamsters' earned pensions at least through 2051, and hopefully well beyond that. The new COVID-19 relief bill will save the pensions of over one million workers, including four hundred thousand Teamsters. What is Teamster Rank & File Education and Legal Defense Foundation (TRF)? . Despite lacking clear statutory authority, the . The application is organized by the items specified in Revenue Procedure 2015-34 . Titolo says that the hire was rather to effect an expansion into Europe). Thanks to this development, Central States Pension Fund benefits are secure both now, and long into the future. For a complete list of SFA applications received to date and summary information for each, you may download the List of Applications [.xls] file. "The economic drag on plans, employersand workers is profound.". (Teamsters for a Democratic Union / Facebook). At the same time, its not as if the pending insolvencies, up until now, had been enough of a motivator to get both sides to come to an agreement, either. At the same time, the bill would give single-employer, corporate pensions funding relief, that is, reduce the contributions they are required to pay into their funds. "I'm over the moon with pensions getting settled," said Mike Walden,a retired truck driver who is president of the National United Committee to Protect Pensions and a member of the Central States fund. Chicago, IL 60601. It begins with one Hoffa, the late Teamsters chief James R. Hoffa, and the Central States pension fund he started. Is the plan to require contributions at the same level as these troubled plans are currently paying in, or more, or less? "At the Black Leadership Conference, I was inspired by the dedication of TDU members who've been fighting for years. Rather, the $86 billion is . However, this legislation adds in a bit of a quirk; whatever an individual plan might use for its usual valuation interest rate, it is reduced down to a cap thats set at a level 200 basis points (2 percentage points) above the corporate bond rate, or, as the law puts it, the rate specified in section 303(h)(2)(C)(iii)(disregarding modifications made under clause (iv) for such section) which is actually how the corporate bond rate is defined for single-employer plans in the comprehensive pension funding law ERISA (p. 137). It looks like Congress has finally come to therescue of troubled pension plans that provide benefits to more than 1 million truck drivers, grocery store workers, construction workersand other union jobs. "He was very well aware of it.". I'm learning a lot from my TDU brothers and sisters. For retirees, it's a welcomeday after years of lobbying Congress to do something. Multiemployer pension plans benefits are often modest and a lifeline for retirees. Central States Pension Fund. February 23, 2023. The stress took a toll: On New Years Eve 2015, he died of a massive stroke. To what extent would those contributions be used to build assets for future accruals, vs. being spent on already-accrued benefits by being included in the calculations of federal bailout funds, as offsetting money? More than 40,000 of those are in Ohio. And, honestly, Im not so sure this is a disaster either way; most pension plans, even poorly funded enough to be eligible for bailout money, have a certain amount of assets even so, and most pension plans have a practice of diversifying their investments into stocks and bonds, so that a greater proportion of the plans own assets could be shifted to stocks to make up for the mandatory bond investments of the bailout funds. "It's not going to happen, the cuts are not gong to occur," Biden said. Biden, who framed much of his campaign around rebuilding unions as a path to strengthening the middle class, was on board. Collectively, these plans hold about $496 billion in assets but face $1.2 trillion in liabilities for a net liability of $672 billion. Murphy was so glued to his television screen during overnight Senate votes on March 5 and 6 that his wife told him he needed to "get a hobby" that didn't involve tracking procedural maneuvers in the wee hours. Democrats stepped in this month with the proposal to pump money into the troubled pensions. But labor. In 2018, a joint select committee was formed by members of Congress to develop a plan for legislation and recommendations to improve the issue. Check out the recording of the UPS Teamsters United webinar, Yellow has filed updated change of operations documents to consolidate Holland and New Penn into Yellow across the Midwest, East and South. What is Teamster Rank & File Education and Legal Defense Foundation (TRF)? In the narrowest interpretation, this means that a plan otherwise forecast to become insolvent soon enough to be eligible for this bailout, would be insolvent, instead, in 2051. I write about retirement policy from an actuary's perspective. As always, youre invited to comment at JaneTheActuary.com! Not a single Republican in either the House or the Senate has supported the legislation. WASHINGTON Tucked in the Democrats' massive coronavirus stimulus package was a long-awaited solution for a financial ticking time bomb: private pension funds on the brink of collapse, jeopardizing the retirement plans of millions of union members. The assets of the Central States Pension Fund fell to $9.8 billion at the end of March, a drop of $573 million in the first quarter. The legislation was named after Butch Lewis, a revered Teamster and TDU activist who fought consistently for pension protection. Its finances were hurt severely, however, by deregulation of the trucking industry in the 1980s that reduced Teamsters' membership. Central States was established in 1955 to provide benefits to Teamsters in the trucking industry and grew to include other union members, including those in other industries. Get our print magazine for just $20 a year. The government always finds a way to bail out banks and corporations when theyre in trouble. Retirees have kicked open the door with this victory. These pensions guarantee workers a lifetime benefit based on their salary and years of service. The legislation attracted bipartisan support and opposition.Bradley's vote made it 13-11 for the bill, which goes to the Senate Finance Committee for more review. Quarterly results archive by KFIN Technologies Ltd. Company, including the ending of first quarter March 31, second June 30, third Sept 30 and fourth quarter Dec 31. The fund had been asking for help from the federal government and Congress for years, but those pleas largely failed until Biden an unabashed union supporter took office in 2021 and Democrats regained control of both chambers of Congress. Retirees continued to advocate for sustainable pension reform and switched to mobilizing in support of the Butch Lewis Act, which had similar measures to KOPPA. The Teamsters' Central States pension fund, covering nearly 400,000 workers and retirees, is the marquee beneficiary of pension provisions attached to the larger relief bill. Relief to Central States, in the form of an infusion of assets to cover all pensions at least through 2051, will likely come later in 2022. Additionally, the law creates a 25% investment tax credit to build chip manufacturing plants. This is wonderful news for all Central States participants. WASHINGTON, Dec. 8, 2022 /PRNewswire/ -- Nearly 350,000 Teamster retirees are celebrating today over an announcement that the Central States Pension Fund (CSPF) will be granted $36 billion by the Pension Benefit Guaranty Corporation. The fund projects forward that it will pay $2.83 billion in pension benefits this year, while taking in $651 million in employer contributions. March 7, 2021. The journey is over.'". Though UPS agreed to a $6.1 billion cash infusion on their way out, this left the fund without a key contributor that kept it . Already on our list? "If we didn't come to the support of these pensions, it would take down the Pension Benefit Guaranty Corporation, which insures pensions for Americans in the private sector.". Whether this bill is better than the alternative, remains to be seen (and is perhaps unknowable, as we will now be unable to know whether there would ultimately have been a compromise hammered out, or not). Without this new law by Congress, many multiemployer pension plans would have run out of money within years, threatening the retirement security of Michigan workers and retirees." Then, when Democrats won power in the Senate in January on the strength of a pair of run-off election victories in Georgia, the dynamics of the pension issue changed dramatically. This feverish period of activity resulted in a victory in May 2016 when the Treasury Department denied cuts to the Central States Pension Fund. (Of course, if the projection is too optimistic about the number of future workers, the opposite will be true.). Ken Stribling, President of the National United Committee to Protect Pensions and a Teamster for more than 30 years, was a leader in the lobbying efforts to rescue CSPF. Hopefully that will be by the end of this year, but the date is not yet known. Key provisions of the aid package for the multiemployerfundsare based on the Butch Lewis Actthat Sen. Sherrod Brown, D-Ohio,recently reintroduced in the Senate in case the overall bill didn't include help for the multiemployer funds. Lewiswasa retired truck driver and Teamsters leader from West Chester, near Cincinnati, who lost sleep and fretted constantly about the cuts he and his fellow Teamsters faced because of the Central States problems. Among the plans is the massive Central States Pension Fund that covers about 400,000 retireesand workers paying into the fund. Additional information is available on the Frequently Asked Questions page. Information and Activism exchange for Teamster & Other of the 1.5Million MEPP Retirees, who are facing extreme cuts from Mandated Law. Employers increasingly use defined-contribution plans like 401(k)s, which put workers in the precarious position of depending on a volatile stock market to keep their benefits safe. According to pension fund staff reports provided to the overseer, "the continuing downward pressure on fund assets is largely due to the fund's current annual operating deficit of more than $2 billion per year," with the pension fund each year paying $2 billion more in benefits than it collects in contributions, the overseer report said. This is the future the ruling class would love to bring into being if we dont stop them. The House is expected to vote Wednesday on the Senate version of the bill thatpassed Saturday. Heck, I dont know. But should this rule be finalized, and skipping over the arcane details, heres how the bailout would work: In the first place, the legislation had stated that the bailout fund would pay qualifying plans lump sums of such amount required for the plan to pay all benefits due during the period beginning on the date of payment of the special financial assistance payment under this section and ending on the last day of the plan year ending in 2051. This could be interpreted, most generously, as simply giving plans every dollar that they would otherwise spend on retirement benefits in the next 30 years. I had, last week, expressed my frustration at the complete lack of any reform provisions in this legislation; its nothing other than a doling out of money. The Central Pension Fund (CPF) is a multi-employer pension fund established in 1960 to provide retirement, disability and death benefits to members of, and individuals represented by, the International Union of Operating Engineers. Any defection could have scrapped the provision or the whole bill. More than 50 of the union's pension funds would be eligible for aid, including its Central States plan, which has 400,000 participants and beneficiaries. President of the International Brotherhood of Teamsters labor union James P. Hoffa speaks at a news conference regarding truck drivers striking against what they say are misclassification of workers at the Ports of Long Beach and Los Angeles in Long Beach, Calif., on Oct. 27, 2015. The Teamsters plan right now has to wait until April to apply for funds because the government is prioritizing processing smaller, already-insolvent union pension funds, they said. Millennial workers often joke that by the time were senior citizens there will be no such thing as retirement or pensions. Biden promises Covid relief will 'generate economic growth for the entire nation'. The Butch Lewis proposal was included in the COVID relief bill that passed the House Ways and Means Committee on Feb. 11 by a vote of 25-18. PBGC will also contact prospective applicants via email when new information is available. The $36 billion goes to the Central States Pension Fund, which provides pensions to nearly 360,000 union workers and retirees, primarily members of the International Brotherhood of. Bankruptcies during the 2008-09 recession exacerbated the issue. PBGC is a government insurance agency that guarantees pension benefits. Organized crime within the Teamsters union was the plot of . A favorable decision is all but assured, so the needed funds to protect all pensions at least through 2051 will follow. Here's what it means, "This will be by far the single largest amount of assistance to come from (the legislation)," said Gene Sperling, Biden's coordinator for the benefits doled out under what was called the American Rescue Plan. Check out the recording of the UPS Teamsters United webinar, Yellow has filed updated change of operations documents to consolidate Holland and New Penn into Yellow across the Midwest, East and South. I explained that the new plan, one component of the Covid relief reconciliation bill, was a significant disappointment insofar as it consisted wholly of plowing cash into the most-troubled plans and lacked any of the reform provisions which might provide a path for long-term financial sustainability. The $1.9 trillion pandemic relief measure included $86 billion that will be used for grants . It is an ongoing frustration to me that Congress couldnt come up with a suitable compromise in regular order, as they say, and I dont have access to the necessary information to judge whether Republicans, or Democrats, or just some specific individuals were at fault for this. Because contributions are tax-deductible, this is a backdoor way of raising revenues, to the tune of $12.6 billion during this time period. Central States' Application for Special Financial Assistance On December 8, the Pension Benefit Guaranty Corporation (PBGC) approved the Central States Pension Fund's application for Special Financial Assistance (SFA), in accordance with the provisions of the American Rescue Plan Act of 2021. Try Today I want to apply for benefits Start the process of applying for Retirement, Disability, or Survivor Benefits here. You may opt-out by. Recently some leaders of the NUCPP have twice met with Teamster President Sean OBrien to discuss a positive role for retirees going forward. 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