Highlights:
Meeting in Kansas City this week was final stop of
national listening sessions
Treasury officials have until May to decide whether
proposed pension cuts can go forward
Rep. Emanuel Cleaver is among legislators seeking relief
for retired union workers
Is hard work, sacrifice and delayed gratification
rewarded anymore in America?
Don’t ask a Teamster.
In cities across the country recently, including Kansas
City this week, they’ve filled auditoriums to air their grievances over a
pending federal pension agreement that would spell hardship — and in many cases
financial disaster — for an estimated two-thirds of the 407,000 Teamsters whose
pensions are managed by the Central States Pension Fund.
Like several other so-called multiemployer pension funds,
commonly set up by unions and employers with whom they have collective
bargaining agreements, Central States is in deep trouble. It’s paying out $3.46
for every dollar taken in through employee contributions. If it fails, it could
wipe out the multiemployer fund of the federal Pension Benefit Guaranty Corp.,
which insures pensions against bankruptcy.
To avert its impending demise, Central States applied to
the Treasury Department, the PBGC and the Department of Labor for permission to
cut pension payments to the fund’s beneficiaries.
If the plan goes through, many would face cuts of up to
60 percent in the monthly retirement payment they spent their lives working
for, believing it was guaranteed. They worked for that check. They believed it
would be there to pay for mortgages, groceries, grandchildren’s schooling and
medical costs as they aged. Now they’re being told to give a big chunk of it
back.
Is that fair? Start by considering that it wasn’t even
legal until December 2014. That’s when the Multiemployer Pension Reform Act was
attached, at the last minute, to a must-pass omnibus spending bill. It allowed
pension funds facing insolvency to apply to the Treasury Department for
permission to decrease employee pension benefits.
No hearings were held. No impact studies were conducted.
No debate occurred. The lack of process is damning. Many members of Congress
didn’t realize what had been tucked into the bill before they voted on it. It
was speedily passed, and President Barack Obama signed it into law.
Now, as required under the law, the Treasury Department
is reviewing Central States’ application to slash benefits. Attorney Kenneth
Feinberg, an acclaimed federal mediator who is acting as special master in the
review, is attending town hall forums to hear out Teamsters whose pensions are
on the chopping block. In city after city, he has watched rooms fill with
hundreds of Teamsters — retired truck drivers, dockworkers, freight loaders —
many gray-haired and often assisted by canes.
The Treasury has until May to decide whether to approve
the application.
Bills have been introduced in Congress to undo the damage
— including one co-sponsored by presidential candidate Sen. Bernie Sanders that
would close tax loopholes for the rich and redirect the money to backstop
multiemployer pensions — but they have little chance of passing, given the
partisan stalemate in Washington.
Central States is a canary in the mineshaft for many
multiemployer funds. There are fewer union members paying into Central States.
Some worked for companies that went bankrupt and no longer exist. Some of those
firms quit paying into the fund when they went under.
The PBGC, too, is in danger. It guarantees pensions for
10 million workers in similar multiemployer funds.
Politicians and pundits love to blame union incompetence
and greed for such tragedies, and the Teamsters leadership has not been
faultless. But trucking industry deregulation also hobbled the fund, as did
anti-union policies that decimated membership. The Wall Street firms that were
given oversight of the fund through a consent decree in the early 1980s did a
poor job of shepherding the fund through the financial crisis and the
recession.
The causes of the debacle are complicated, and the
solution will be costly. It’s clear, however, that making rank-and-file workers
pay the price is about the least just outcome imaginable.
Since first writing of this proposed deal in late
November, I’ve heard from many affected retirees.
They speak of their loyal service to trucking firms, some
now long dissolved. They write of having been young men ready to work hard and
provide for their families. They recall agreeing to strenuous shift work and
wage concessions in exchange for the promise that their pensions would be there
when they were older.
Many are like Elmer Bowen, a retired truck driver in
Georgia, who wrote: “Our country was founded on aspects of integrity, honesty,
fairness, equality and righteousness. However, I see none of those traits in
the decision that has been made with the Multiemployer Pension Reform Act of
2014.”
He’s right. An equitable solution needs to be found, one
that does right by these American workers.
Source: The
Kansas City Star
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