PRESS RELEASE
Teamsters Central States Pension Fund Files for Reorganization
Oct. 7, 2015 (EIRNS)—One of the largest pension funds in the United States, the Central States Teamsters Pension Fund, has filed for reorganization under a newly minted Federal law, and sent letters to more than 400,000 members warning that their benefits must be cut, Mary Walsh reports in today’s New York Times.
Any reorganization of the Teamsters Fund will be a months-long brutal battle as workers, retirees, union leaders, and employers all seek to protect what have been made competing interests. The Central States Fund is a multi-employer plan, the type of plan led jointly by a union whose members may work for a number of companies in the same industry (trucking) whose failure is a disaster, because the money owed could wipe out the Federal Pension Guaranty Corporation, which now pays the benefits of tens of thousands of retirees.
Cutting retirees’ pensions is illegal, except under the most dire circumstances, such as bankruptcy. But the executive director of the Central States fund, Thomas Nyhan, told the NYT that reducing payouts to make the money last longer is the only way to avoid a devastating collapse in the next few years. Deregulation, the collapse of production, and its trucking component, two big stock crashes, and likely bad casino investments, have created a situation in which the fund is paying out $3.46 for every dollar of employer contributions. "Orphaned" workers, whose employers have gone bankrupt, could receive a maximum payment of only $14,158/year.
The U.S. Treasury will decide whether to approve the proposed cuts by next May; if it does, the 407,000 members of the Central States Fund will vote on the plan. This is a different kind of election, however, because even if the majority votes no, the Treasury will have the authority to impose the cuts, because—you have heard this before—the Central States fund is so large it qualifies as "systemically important"—like the banks bailed out by the Treasury in 2008. In the future, all workers who remain employed will accrue lower benefits.
Union President James Hoffa touted legislation introduced by Sen. Bernie Sanders (I-VT) which would close tax loopholes and redirect the money to supporting multi-employer pension funds in financial difficulty.
As Lyndon LaRouche’s PAC told the Congress yesterday,
"There is now an acute emergency which threatens to kill millions, due immediately to the bankruptcy of Wall Street,"
and the remedy is that only activities compatible with a Glass-Steagall standard must continue; and the Federal Government must issue U.S. dollars as credit to preserve the lives of the citizens, employ the employable, and, over the slightly longer term, be used to raise the level of productivity of U.S. labor. Removing Barack Obama would be an excellent starting point, LaRouche said.
