The Teamsters pension plan (Central States Pension Plan), widely criticized as being extremely underfunded and unable to pay a fraction of its obligations to retirees, is set to be cut in the coming weeks. The Central States Pension Plan last year became the first financially troubled pension fund to seek relief with the federal government under the Multiemployer Pension Reform Act that was passed in late 2014. The law was designed to keep multiemployer plans solvent and continue to pay retirees, but at a reduced rate. Without substantial changes, Central States will be insolvent within 10 years.
This reduced benefits amount has employees angry and threatening to “go old-school on their ass,” referring to Congress. Other suggestions from Akron-area retirees included a nationwide strike, blocking or occupying the U.S. Treasury Department building, and, as one member suggested, to “shoot them.”
Most companies I represent get out of the union defined benefit contribution plans because most of them are headed for the same fate as Central States. Workers are then free to invest in company sponsored 401k plans or some other option on their own. I feel bad for the workers who believed the union organizers that promised them a lucrative retirement if they voted for the union and paid into the union’s pension plan. Decades later, after the workers lived up to their end of the bargain, the union broke its promise.