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Thousands Of Teamsters Could See Pensions Cut

Treasury Officials Meeting In Milwaukee To Get Feedback

By
Richard Hurd (CC-BY)

The U.S. Treasury Department will hold a public meeting in Milwaukee on Wednesday night on proposed cuts to a pension plan that affects many Teamsters unions, a reduction that could affect thousands of union members.

The multi-employer Central States Pension Fund has said it will go broke in about 10 years if it doesn’t start reducing pension benefits now. Central States has filed a proposed restructuring plan with the Treasury Department that would cut pensions in half for tens of thousands of former Teamsters and make smaller cuts for many more retirees.

Kenneth Feinberg, Treasury’s special master in the case, is urging people to come to a Milwaukee hearing and add to the comments he said that his agency has already received “about the financial risks involved in permitting these cuts.”

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“Believe me, I’m fully aware of how emotional and troublesome all of this is to retirees,” Feinberg added.

The issue is before Treasury Department because of a so-called Pension Reform Act passed last year that allows some multi-employer pension plans to propose a temporary or permanent reduction of pension benefits if a plan is projected to run out of money before paying all the promised dollars. Feinberg said the Treasury Department has some discretion under that law.

“As to any plan that is submitted to us, we’ll take a look at it and we will review what the plan administrator proposes,” he said. “And that’s why it is imperative we come to Milwaukee to hear exactly what retirees think about the plan, why they think it’s unjust, unfair, and we will be carefully taking into account what they say at these town hall meetings.”

Feinberg said it’s the Treasury Department’s understanding that another federal agency, the Pension Benefit Guaranty Corp., which aims to protect the retirement incomes of 40 million people in private-sector defined benefit pension plans, wouldn’t be able to pay all of Central States’ indebtedness.

Labor unions are trying to generate a large turnout at Wednesday night’s hearing. Officials with Teamsters Local 200 in Milwaukee said they will have a bus to take people to the event.

International Teamsters President James Hoffa this week wrote the Treasury Department urging the agency to reject the Central States Plan. Hoffa also wants Congress to repeal last year’s Pension Reform Act.

Treasury Department officials will decide on Central States’ plan next year.