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The Teamsters have begun informing retirees and current workers that their pension benefits may soon be cut, the final ironic twist to a lobbying campaign that saw the union spend its own members’ dollars to win the right to shrink their retirement pay.

The somber notifications began going out from the Teamsters Central States Health and Welfare Pension Fund this spring, a decision that could ultimately affect 410,000 current pension participants and a total of more than 10 million U.S. workers nationwide. Cuts could begin as early as next year.

The cuts were made possible after the lame-duck Congress late last year passed the Multiemployer Pension Reform Act (MPRA), enabling any multiemployer pension fund to cut benefits to workers and current retirees if the plan is underfunded by at least 20 percent.

Multiemployer pension funds are commonly used by big unions and are maintained by one more or more collective bargaining agreements while operating under a board of trustees.

The Teamsters pension fund has been struggling with severe shortages for years, even as the union continued to pour millions of dollars into political election efforts and Washington lobbying.

In 2014 alone, the union and its affiliates spent nearly $5.9 million on lobbying and political contributions, and one of its main legislative targets was passage of the pension reform law that finally gave it the right to start reducing benefits, according to the lobbying reports it filed with Congress.

The union has already poured another $397,000 into Washington lobbying this year.

The letters that began going out to pensioners last month painted a bleak future for the Teamsters pension fund, suggesting Washington, and not the union, was to blame.

“Like many of our nation’s multiemployer pension funds, Central States Pension Fund has become severely underfunded and is headed toward financial failure if we don’t take immediate, decisive action,” said a CSPF letter dated April 8.

“Baby Boomers are retiring in record numbers and the union workforce has been steadily declining for years. As a result, the Fund currently has more than three times as many retirees as active members — so, fewer contributions are coming in than benefits being paid out. To put this into perspective, for every $3.46 that the Fund pays out in pension benefits, only $1 is collected from contributing employers, which results in a $2 billion annual shortfall. Clearly, that math will never work,” the letter said.

President Obama signed the MPRA into law in December after a lame-duck Democrat-run Senate reached a deal to get the law through both chambers of Congress.

Under the new law, the group hardest hit by reductions likely would be current workers and retirees under the age of 75. The most vulnerable retirees over the age of 80 and those with disabilities would continue to receive full benefits, and proposed benefit reductions for those aged 75 to 80 would be done on a sliding scale.

Any rescue plan proposed by the Teamsters pension fund trustees would have to be approved by the U.S. government. If the pension fund becomes insolvent, beneficiaries would only receive fractional payouts from the government’s Pension Benefit Guaranty Corporation.

The April 8 letter blamed Congress, saying the fact that MPRA wasn’t passed until December meant there was no legal remedy in place that allowed the Teamsters pension fund “to develop a rescue plan from going broke.”

The CSPF says pension cuts are necessary to save the Fund, but that it is too early to tell how dramatic any potential cuts will be.

Congress late last year passed the Multiemployer Pension Reform Act (MPRA), enabling any multiemployer pension fund to cut benefits to workers and current retirees if the plan is underfunded by at least 20 percent.

Unions have kinda cut their own greedy throats all on their own

...the final ironic twist to a lobbying campaign that saw the union spend its own members’ dollars to win the right to shrink their retirement pay.

No, the GOP has convinced people that a decent wage with retirement and health is exorbitant. The unions are not the ones recruiting foreigners to come here to cut wages and increase profits of a company that just reported record profits.

BS...I wish I would have got out of the carpenters union long before I did. Have much better insurance, retirement, vacation etc. now. And I don't even have to pay to work.

Bullshitt

Well what are you expecting? The country right now is being led on an anti-union jihad, and union participation is shrinking, what choice do they have? The only employees in the trades with a decent retirement plan, they must be dealt with.

Bullshitt

Obama is also against unions, that should tell you something.

Elaborate?

The choice they had was not to steal from it's members. Pensions are not being shrunk because membership is down, but that union leadership thought they were like the government with the ability to print money, and stole from their membership, just like the government steals from all of us.

Unions have kinda cut their own greedy throats all on their own