Teamsters Retirees Push Back Against Pension Cuts

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Lindon Laxton retired from Roadway Express in 2000 with a monthly pension of $3,300, $100 for each year he drove trucks around Memphis, Tennessee, and cross country.

He had spent 100 hours a week in an over-the-road truck as a team driver in latter years of his career. At 57, he was ready to spend more time with his wife, Sharon, three children and grandchildren while supplementing a retirement check with part-time income.

But 15 years into a comfortable but modest retirement, the Cordova resident was jolted last October by a proposal to slice his pension in half.

The Central States Pension Fund, jointly overseen by the International Brotherhood of Teamsters and employers, is warning of insolvency by 2026 unless benefits are cut now. It has proposed to reduce pensions for about 115,500 retirees, slightly more than half of current retirees.



"I feel like I've been robbed," Laxton said. "I was promised all these years that I would receive this retirement at retirement age as long as I worked the years, and now they're telling me that they have misinvested the money. I had no idea, or I'd have stayed in the truck," he said.

Laxton is among thousands of Memphis area retirees who could be affected.

Central States has nearly 5,000 retirees in five congressional districts that converge on Greater Memphis, according to the Pension Rights Center in Washington.

Mid-South retirees receive annual pension payments totaling $76.7 million from the fund, which contains $927 million for area retirees considered at risk by the Pension Rights Center.

Penny Pilgrim, leader of Tri-State Teamster Retirees, said, "You're talking about most of them losing over half their retirement. At our age, we can't afford that."

Pilgrim, 73, is retired from Yellow Freight after 30 years. She drove a truck, worked on a dock and was a dispatcher. Roadway and Yellow Freight became part of YRC Worldwide.

"It's affecting us, but it's going to affect the economy in this area, too," said Pilgrim, whose pension would go from $2,500 a month to about $1,200. "If people don't have the money, they're not going to be buying things."

Pilgrim said the public should be concerned about the retirees' plight. "If it wasn't for trucking, your food, your clothing wouldn't be delivered. It's not going to walk to the store, and a train's not going to deliver it," she said.

Laxton, Pilgrim and other retirees are fighting back by writing letters and making phone calls to regulators and lawmakers who could derail the cuts. They also are trying to spread the word to fellow retirees.

Congress opened the door to reduction of current retiree benefits with pension reforms approved in 2014. The Central States proposal is under review by the Treasury Department and is expected to be put to a vote of plan participants in coming months. Central States wants to implement the cuts this summer.

“While painful, without additional funding the fund’s proposed rescue plan is the only realistic option to save the fund from financial failure and help ensure it is able to continue to pay benefits to all participants and beneficiaries in the future,” Central States wrote in a letter to Congress earlier this year.   The letter indicated that without benefit reductions, approximately $11 billion of additional funding would be necessary to prevent the fund from becoming insolvent.

Democratic presidential candidate Sen. Bernie Sanders (I-Vt.) has introduced a bill to reverse the 2014 measure that allowed multiemployer pension plans to reduce benefits under certain circumstances. U.S. Rep. Steve Cohen (D-Memphis) is co-sponsoring the legislation.

The Central States' move has stirred anger and frustration among drivers: anger directed at fund managers, Congress and the Teamsters international, and frustration because retirees no longer have a vote on union leadership. The Teamsters and employers have equal representation on the Central States board.

Central States has been squeezed by changing demographics — it has five retirees for each worker — and trucking company failures post-deregulation. More recently, it was hammered by the recession and the loss of a major chunk of active drivers when UPS Inc. was allowed to pay $6.1 billion to pull out and form its own fund in 2008.

Willie Hardy, 73, a retired Roadway Express driver, said the local retiree group is hoping to spur people into action. A quarterly meeting of the retiree group drew about 150 people to a union hall on Brooks Road this week.

The group plans to send a busload of retirees to Washington for an April 14 rally on Capitol Hill.

"This pension thing here, if it goes through, it's going to devastate a lot of our retirees," Hardy said. His would be cut from $3,200 to $1,600.

"A lot of them, they won't be able to buy their medicine. They'll have to choose between their food and their medicine. It's going to be tough if it goes through," Hardy said.

Laxton said the threatened loss of income makes him question why he put up with the industry's hardships. And the way retirees are being treated certainly does nothing to draw young people to trucking, which suffers from chronically high turnover rates and a growing shortage of drivers.

"When you spend 100 hours a week in about a 10-foot square box, when you're not driving you're sleeping, going from Memphis to California and back, or Arizona, or New Mexico, or wherever, you can kind of grit your teeth and go on and say, 'Well, I'm doing this for my family and my future. This is what I'm going to have in my later years of life,'" Laxton said.

If the cut goes through, Laxton said he'll have to make do with what's left of his pension and Social Security and "what I can do part time, and at age 72, and I'll be 73 next month, that doesn't leave a lot of jobs for you to go to."