Federal Officials Reject Cuts in Teamster Pensions
May 6, 2016
By: Tom Jackson, Sandusky Register
May 6, 2016
Federal officials have rejected planned deep cuts in pensions paid to retired Teamsters members in the Central States Pension Fund, leaving undetermined what will be done to make the fund solvent.
The decision by Kenneth R. Feinberg, the special master named to decide the question, was announced Friday.
The trustees for the Central States Pension Fund, which had urged the cuts to keep the pension fund solvent, said they were disappointed by the Department of the Treasury's decision.
"The Central States Pension Fund Trustees will carefully consider the most appropriate next steps, based on this denial and the final guidance issued by Treasury on April 26," the trustees said in a statement issued Friday.
The trustees urged Congress to take action to save the pension fund.
The Sandusky Register reported in December that many retired truck drivers in the Sandusky area were among those facing huge pension cuts on July 1.
According to figures supplied by U.S. Sen. Sherrod Brown's office, Ohio has 25,746 Central States retirees, with another 7,960 people who are paying into the fund with expectations of getting a pension. There are about 401,000 regional participants.
The Register article cited the cases of two local truck drivers, Dave Kilbride, Berlin Heights, and Mike Kennedy of Clyde. Under the plan that the Central States trustees had asked government officials to approve, Kilbride's pension would have dropped from $2,900 a month to about $1,178, chopping out more than half of his payment. Kennedy's would have fallen from $2,464 a month to $1,404.
Changes in the trucking business have left the pension fund in trouble.
Thomas Nyhan, executive director of the fund, told a committee of Congress in 2013 that workers depending on the pension would be in trouble if action wasn't taken.
Nyhan explained that as a result of deregulation of the trucking industry, many companies no longer participate in the pension fund or have gone out of business.
"In 1980, there was one retiree or inactive employee for every four active employees in the Pension Fund. Today, that ratio has been completely reversed – now there are nearly five retirees and inactive employees for each active employee," Nyhan told the lawmakers.
In a statement, Brown praised the decision but emphasized that action must still be taken to save the pension payments.
“Thousands of Teamsters from Ohio and across the country stood at the Capitol last month and told Treasury to stop these cuts. Today we learned that Treasury heard that message loud and clear,” said Brown. “I’m pleased the Treasury Department heard our repeated calls and rejected Central States’ application. While we celebrate today’s decision, we must also look toward a comprehensive solution that will save Central States and keep the promises made to our retirees.”
U.S. Rep. Marcy Kaptur, D-Toledo, said she also is pleased by the decision.
“Treasury’s rejection is an opportunity for Congress to correct the law that set all this in motion, the Multiemployer Pension Reform Act. Congress cannot duck its responsibility to hold hearings on how this happened, who is responsible, and to consider balanced proposals, such as my legislation, to fix this mess,” she said
“Imagine if Congress were to cut monthly Social Security checks for the nearly 40 million retirees currently collecting benefits by up to two-thirds. There would be riots in the streets,” Kaptur said.