WASHINGTON — Thousands of Teamsters retirees, angered by looming pension cuts of 50% or more, descended on Washington April 14 to protest the reductions ahead of a May 7 deadline for a Treasury Department decision on the proposed cutbacks.
Treasury is considering a proposal from the Central States Pension Fund, the largest Teamsters pension fund, to make the cuts. The agency was told by CSPF the cuts were needed to create a long-term survival plan, since it could run out of money in as little as a decade.
The fund, with more than 220,000 Teamsters retirees, pays out $3.46 in benefits for every dollar it receives, and spent $2 billion more than it collected in 2014. In that year, Congress passed a law requiring pension funds in “critical” financial condition such as CSPF to submit rescue plans.
The demonstration’s backdrop was the U.S. Capitol building, where two measures have been introduced to undo the 2014 measure. To date, there is no sign the measures would advance.
“Congress bailed out Wall Street,” Teamsters General President Jim Hoffa told Transport Topics. “Now it’s time to give us a hand. We are concentrating on getting Treasury to shoot down the Central States proposal.”
The Keep Our Pension Promises Act, introduced in the Senate by presidential candidate Bernie Sanders and in the House by Rep. Marcy Kaptur (D-Ohio), would block the reductions from going into effect. The Pension Accountability Act from Sen. Robert Portman (R-Ohio) and Rep. David Joyce (R-Ohio) would change the process for voting on the cuts so that the tally is based on those who vote on the reduction proposal. Currently, the law bases the outcome of the vote on all fund members, whether or not they voted.
Hoffa also said the union continues to press for action on the legislation.
The rally also featured members of Congress, including Sen. Al Franken (D-Minn.), who said “we are going to make sure your voice is heard at the Treasury Department. Promises are being broken, and that is not right.”
Rep. Kevin Cramer (R-N.D.) said he will press to have the Treasury Department ruling held off until the completion of a Government Accountability Office study of the pension issue.
Tom Krekeler, a 69-year-old union member from the Cincinnati area who could receive a 53% cut after 31 years in transportation, told TT: “We have to do some serious cutting” if the cuts happen. He and his wife already have tried to cut medical and insurance bills.
At the same time, he said, “there are a hell of a lot who are worse off than we are.”
Tim Vermillion of Roanoke, Virginia, who is in line for a $600 cut, said “we have people who will lose their houses.”
Blaming Congress for creating the pension mess, Vermillion pointed to the Capitol and said, “We are out here to talk to D.C. to tell them to get it. We are going to remember this at election time.”
The Treasury Department’s ruling is just one step in the process before cuts can take place. Once Treasury has ruled, it is then put before the fund’s participants for a vote. If the version approved by the Treasury is voted down, there are provisions in the 2014 law that would impose reductions. The pensions are based on individuals’ work history and a formula covered by labor agreements.
The fund told participants in October that “a realistic rescue plan is needed now. The longer we wait to act, the larger that benefits reductions will have to be. The goal of our rescue plan is to remove both risk and doubt.”
Central States, with more than 400,000 members, includes active workers at YRC Worldwide and ArcBest Corp.’s ABF Freight unit and retirees whose fleets went bankrupt and aren’t paying into the fund.
The cuts also would affect active workers by raising the age for full retirement benefits to 65 from 62. The CSPF proposal would insulate about 90,000 retirees who are 75 or older from full or partial cuts due to age. The other 130,000 retirees’ benefits would be cut based on individual work histories.