GMCS Commentary: There is a bit of irony that the statutes driving these changes came about, in my opinion, as a result of the Teamsters Central States Pension Fund crisis.
Teamsters are up in arms over looming pension cuts that
could slash the incomes of both current and future retirees—anyone under 80.
They’re battling trustees of the enormous Central States
Pension Fund, which has said that cuts of up to 30 percent may be necessary, as
soon as possible, to keep from running out of money. Those trustees represent
both management and their international union.
At the same time, worker and retiree activists are also
battling corporations bent on eliminating pensions altogether. The latest
political blow came in December when Congress passed a bill, in the middle of
the night, to allow cuts to certain already-earned pensions.
Bob Amsden drove a truck in Wisconsin for 33 years, over
the road and local. He said he got involved because he “couldn’t believe they
would do something like this to the people who built this country.
“We don’t contribute to their pockets, so they went after
retirees. If they can beat us down, the rest will fall like putty.”
Ten Million Pensioners
The Central States Pension Fund includes 25 states in the
South and Midwest, from Florida to North Dakota, covering 65,000 working
Teamsters, 180,000 retirees, and 30,000 surviving spouses. Central States was
the most active lobbyist for the Multiemployer Pension Reform Act of 2014,
which made the cuts legal.
Most multiemployer plans are secure, but union members in
funds designated “critical and declining” could now see cuts. There are 1,400
multi-employer pension plans in the U.S., with about 10 million participants,
including many Teamsters and construction, hotel, and grocery workers.
A dozen meetings around the Midwest and South over the
last month have attracted 100 to 200 angry members apiece, as activists and
local retiree clubs learn their benefits are in danger. The meetings are likely
to grow in size and number: Central States has just sent out notices to every
member warning that cuts are coming.
Committees have formed in Cleveland, Columbus, the Twin
Cities, Milwaukee, Cincinnati, St. Louis, Memphis, and North Carolina.
Activists are scheduling meetings with their Congresspeople and writing them
letters, leafleting and raising questions at local union meetings and Teamster
retiree clubs, and pestering the Teamsters International to do something.
An April 8
rally near Chicago, outside a meeting called by Central States officials to
inform Teamster local officers, drew 150 members from eight states, including
as far away as Georgia.
Amsden says the average Central States pension is $1,230
a month ($14,760 a year). “You take 30 percent of that away and what will they
have to live on?” he asks.
Politicians say they don't want to pay for a “bailout” of
the fund, but Amsden predicts, “They are going to bail us out one way or
another. People who never expected any government assistance in their life,
they’re going to have to go for food stamps.”
For those with decent pensions—some make $36,000 a
year—the cuts could be as high as 65 percent, said Mike Walden, a 31-year
Roadway driver who founded the northeast Ohio group.
Sue Cole, wife of a retired carhauler and a founder of the
Teamsters Local 604 Pension Protection Committee in St. Louis, said, “They act
like 30 or 40 percent is no big deal. Our feeling is that we worked for it.
They mismanaged it, we didn’t. Why should we lose any portion of our pension?”
CAN THEY DO THAT?
Pensioners have counted on the fact that it was illegal
to cut benefits for the already retired, thanks to the 1974 ERISA law. But last
December Congress passed the Multiemployer Pension Reform Act—after heavy
lobbying by Central States, which became the poster child for troubled pension
funds.
The act was tacked
onto the “Cromnibus” appropriations bill (which kept certain government
functions from shutting down) to avoid debate and so that no Congresspeople had
to take clear responsibility for it.
It created a new category of multi-employer pension fund:
“critical and declining.” If a fund is projected to run out of money in 15 to
20 years, its trustees now have the right to cut benefits, after a vote of the
beneficiaries.
Anti-cuts activists point out that, because the stock
market is doing well, the Fund is actually richer now than it was at the end of
2008, after the financial meltdown. It has $18 billion in assets, versus $17.3
billion then. Such gains aren’t likely in the future, but the Fund’s current
relative health is reason enough, they say, to slow down and take a look at
other possible solutions.
Walden spoke scornfully of Thomas Nyhan, who, he points
out, made $662,000 in 2013 as executive director of Central States: “In his
letter to people April 8 he said he’s sorry he can’t find an easier solution. I
agree, there’s nothing easier than just cutting our pensions. Don’t do anything
that might require thinking.”
The committees are gathering petitions demanding that the
Fund seek a “second opinion,” an independent audit of its actuarial and
financial status.
“We know it’s in trouble and will run out if no steps are
taken,” says Ken Paff of Teamsters for a Democratic
Union, which is backing the retirees’ movement. “But how did they determine
that it has 11 years till it runs out? I used their figures and I got 17. Let
the members see
behind the curtain.”
The Teamsters pension movement has joined the Pension Rights Center, the AARP, and some
unions to support a soon-to-be-introduced bill to delay or repeal the cuts and
back up troubled plans.
Congresswoman Gwen Moore of Wisconsin wrote
to the committee in her state, “I refuse to force beneficiaries to be
singled out as the first to sacrifice in the reform... If you are going to take
the extraordinary measure to change long-standing ERISA laws on benefit cuts,
then all the reforms need to be made at once so that everyone is putting skin
in the game simultaneously.”
STACKED VOTE
Under the law, both retirees and active workers get to
vote on any cuts—but a failure to vote counts as a “yes,” and in a big fund
like Central States, the Secretary of the Treasury can override a “no” vote and
impose the cuts anyway.
The law requires arguments on both sides to appear in the
ballot mailing, but with five
statements in favor of swallowing the cuts and just one against.
Nonetheless, assuming the Fund opts for draconian cuts,
activists will campaign hard for a “no” vote. “We call it social disruption,”
Amsden said. “We’re doing a media blitz. We have 11 committees throughout the
Midwest; they’re all forming Facebook pages.” In March his group made the front
page of Milwaukee’s daily paper.
They expect the Fund to tell members the exact amounts of
the proposed cuts this summer, and to hold a vote in early fall. “We’re going
to ride the pony till it dies,” Cole said. “We are going to say no because we
aren’t guaranteed they won’t come back in another year and ask for more.”
VOTING ON THE PERPS
Pensions will certainly be an issue in the
2016 election for top Teamster officers, as President James Hoffa and his
officers back the cuts and challengers Tim Sylvester and Fred Zuckerman blame
Hoffa for the decline of the Fund.
In the last officers’ election only 300,000 of the 1.3
million Teamsters voted, with two challengers receiving a combined 41 percent
of the vote. So the 65,000 working Central States Teamsters could prove a
formidable voting bloc.
The officers sometimes try to have it both ways. At the
April 8 Chicago rally against the cuts, International Vice President John
Murphy showed up to praise the demonstrators and claim Hoffa was on their side.
Meanwhile, inside the Central States meeting, international representatives
were telling local officers the cuts were mandatory.
Walden says his many calls to Teamster headquarters have
gone unreturned. “As far as transparency and communication, they’re avoiding
us,” he said.
The single biggest reason Central States is in trouble is
that the international union allowed UPS, by far the largest employer of
Teamsters, to leave the fund in 2008. The Fund’s annual income would be about
double if 45,000 UPS workers in those states were still members.
But Hoffa let UPS out, in return for the company’s
letting him organize 13,000 workers at a new subsidiary, UPS Freight. Those
workers now have a union contract—but with an inferior pension.
Source: LaborNotes
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