Union pension fund plans 30 percent cut to retiree benefits

The New York pension fund for teamsters plans to cut benefits for 35,000 members in upstate to keep it solvent.

The board of directors for the New York State Teamsters Conference and Pension Fund approved monthly benefits cuts for retired truck drivers of 31 percent. Members still working will see cuts of 20 percent. The teamsters union represents workers at freight, construction, concrete and other companies, including drivers at UPS and ABF Freight.

“No one wants to see anything reduced but we’re in the situation if we don’t do something then the situation is going to be much worse," said John Bulgaro, the co-chair of the board of trustees that oversees the pension fund and president of the Albany area Teamsters Local Union 294.

The local chapter has about 5,300 members and represents workers at several employers,

including some at Callanan Industries, a Schenectady supplier of aggregate, asphalt and concrete, and Cranesville Block Co., a concrete maker in Albany.

The proposed cuts to benefits will be submitted to the U.S. Treasury Department for approval on Aug. 25. Members of the fund will then vote on the plan.

The New York teamsters pension is one of several grappling with the challenge of finding ways to pay for the benefits it promised members. Longer life expectancies for retirees and declining union membership have made it difficult for pensions to survive.

For employers, cuts to the troubled pension funds they've contributed to represent the loss of an attractive benefit to recruit and retain workers. Tom Eron, a lawyer with Bond Schoeneck and King in Syracuse, said he represents some employers that are part of the plan.

“The employers who are currently in the fund are concerned that their active employees and some of their retirees are going to suffer this potential benefit loss. They’re not getting the benefit that they negotiated,” he said. “Now they still have the obligation to pay that same dollar amount but their employees are going to see a 20 percent cut to the promised benefits."

Some other large pension plans have been unsuccessful in bids to use a 2014 law allowing potentially insolvent plans to reduce promised benefits to keep afloat. The treasury department in May rejected benefits cuts for 270,000 union members and retirees of the Teamsters' Central States pension fund.

If cuts to the New York pension for teamsters are approved, the reduced benefits would go into effect on July 1, 2017. There are 16,000 people currently receiving retirement benefits from the fund.

Source: Albany Business Review