Teamsters Mount Grassroots Campaign to Block Pension Cuts

After a middle-of-the-night Congressional vote opened the door to slash the incomes of both current and future retirees—anyone under 80—activists are battling the trustees of their own Central States Pension Fund. Photo: Teamsters for a Democratic Union.

Teamsters are up in arms over looming pension cuts that could slash the incomes of both current and future retirees—anyone under 80.

They’re battling trustees of the enormous Central States Pension Fund, which has said that cuts of up to 30 percent may be necessary, as soon as possible, to keep from running out of money. Those trustees represent both management and their international union.

At the same time, worker and retiree activists are also battling corporations bent on eliminating pensions altogether. The latest political blow came in December when Congress passed a bill, in the middle of the night, to allow cuts to certain already-earned pensions.

Bob Amsden drove a truck in Wisconsin for 33 years, over the road and local. He said he got involved because he “couldn’t believe they would do something like this to the people who built this country.

“We don’t contribute to their pockets, so they went after retirees. If they can beat us down, the rest will fall like putty.”

Ten Million Pensioners

The Central States Pension Fund includes 25 states in the South and Midwest, from Florida to North Dakota, covering 65,000 working Teamsters, 180,000 retirees, and 30,000 surviving spouses. Central States was the most active lobbyist for the Multiemployer Pension Reform Act of 2014, which made the cuts legal.

Most multiemployer plans are secure, but union members in funds designated “critical and declining” could now see cuts. There are 1,400 multi-employer pension plans in the U.S., with about 10 million participants, including many Teamsters and construction, hotel, and grocery workers.

A dozen meetings around the Midwest and South over the last month have attracted 100 to 200 angry members apiece, as activists and local retiree clubs learn their benefits are in danger. The meetings are likely to grow in size and number: Central States has just sent out notices to every member warning that cuts are coming.

Committees have formed in Cleveland, Columbus, the Twin Cities, Milwaukee, Cincinnati, St. Louis, Memphis, and North Carolina. Activists are scheduling meetings with their Congresspeople and writing them letters, leafleting and raising questions at local union meetings and Teamster retiree clubs, and pestering the Teamsters International to do something.

An April 8 rally near Chicago, outside a meeting called by Central States officials to inform Teamster local officers, drew 150 members from eight states, including as far away as Georgia.

Amsden says the average Central States pension is $1,230 a month ($14,760 a year). “You take 30 percent of that away and what will they have to live on?” he asks.

Politicians say they don't want to pay for a “bailout” of the fund, but Amsden predicts, “They are going to bail us out one way or another. People who never expected any government assistance in their life, they’re going to have to go for food stamps.”

For those with decent pensions—some make $36,000 a year—the cuts could be as high as 65 percent, said Mike Walden, a 31-year Roadway driver who founded the northeast Ohio group.

Sue Cole, wife of a retired carhauler and a founder of the Teamsters Local 604 Pension Protection Committee in St. Louis, said, “They act like 30 or 40 percent is no big deal. Our feeling is that we worked for it. They mismanaged it, we didn’t. Why should we lose any portion of our pension?”

CAN THEY DO THAT?

Pensioners have counted on the fact that it was illegal to cut benefits for the already retired, thanks to the 1974 ERISA law. But last December Congress passed the Multiemployer Pension Reform Act—after heavy lobbying by Central States, which became the poster child for troubled pension funds.

The act was tacked onto the “Cromnibus” appropriations bill (which kept certain government functions from shutting down) to avoid debate and so that no Congresspeople had to take clear responsibility for it.

It created a new category of multi-employer pension fund: “critical and declining.” If a fund is projected to run out of money in 15 to 20 years, its trustees now have the right to cut benefits, after a vote of the beneficiaries.

Anti-cuts activists point out that, because the stock market is doing well, the Fund is actually richer now than it was at the end of 2008, after the financial meltdown. It has $18 billion in assets, versus $17.3 billion then. Such gains aren’t likely in the future, but the Fund’s current relative health is reason enough, they say, to slow down and take a look at other possible solutions.

Walden spoke scornfully of Thomas Nyhan, who, he points out, made $662,000 in 2013 as executive director of Central States: “In his letter to people April 8 he said he’s sorry he can’t find an easier solution. I agree, there’s nothing easier than just cutting our pensions. Don’t do anything that might require thinking.”

The committees are gathering petitions demanding that the Fund seek a “second opinion,” an independent audit of its actuarial and financial status.

“We know it’s in trouble and will run out if no steps are taken,” says Ken Paff of Teamsters for a Democratic Union, which is backing the retirees’ movement. “But how did they determine that it has 11 years till it runs out? I used their figures and I got 17. Let the members see behind the curtain.”

The Teamsters pension movement has joined the Pension Rights Center, the AARP, and some unions to support a soon-to-be-introduced bill to delay or repeal the cuts and back up troubled plans.

Congresswoman Gwen Moore of Wisconsin wrote to the committee in her state, “I refuse to force beneficiaries to be singled out as the first to sacrifice in the reform... If you are going to take the extraordinary measure to change long-standing ERISA laws on benefit cuts, then all the reforms need to be made at once so that everyone is putting skin in the game simultaneously.”

STACKED VOTE

Under the law, both retirees and active workers get to vote on any cuts—but a failure to vote counts as a “yes,” and in a big fund like Central States, the Secretary of the Treasury can override a “no” vote and impose the cuts anyway.

The law requires arguments on both sides to appear in the ballot mailing, but with five statements in favor of swallowing the cuts and just one against.

Nonetheless, assuming the Fund opts for draconian cuts, activists will campaign hard for a “no” vote. “We call it social disruption,” Amsden said. “We’re doing a media blitz. We have 11 committees throughout the Midwest; they’re all forming Facebook pages.” In March his group made the front page of Milwaukee’s daily paper.

They expect the Fund to tell members the exact amounts of the proposed cuts this summer, and to hold a vote in early fall. “We’re going to ride the pony till it dies,” Cole said. “We are going to say no because we aren’t guaranteed they won’t come back in another year and ask for more.”

VOTING ON THE PERPS

Pensions will certainly be an issue in the 2016 election for top Teamster officers, as President James Hoffa and his officers back the cuts and challengers Tim Sylvester and Fred Zuckerman blame Hoffa for the decline of the Fund.

In the last officers’ election only 300,000 of the 1.3 million Teamsters voted, with two challengers receiving a combined 41 percent of the vote. So the 65,000 working Central States Teamsters could prove a formidable voting bloc.

The officers sometimes try to have it both ways. At the April 8 Chicago rally against the cuts, International Vice President John Murphy showed up to praise the demonstrators and claim Hoffa was on their side. Meanwhile, inside the Central States meeting, international representatives were telling local officers the cuts were mandatory.

Walden says his many calls to Teamster headquarters have gone unreturned. “As far as transparency and communication, they’re avoiding us,” he said.

The single biggest reason Central States is in trouble is that the international union allowed UPS, by far the largest employer of Teamsters, to leave the fund in 2008. The Fund’s annual income would be about double if 45,000 UPS workers in those states were still members.

But Hoffa let UPS out, in return for the company’s letting him organize 13,000 workers at a new subsidiary, UPS Freight. Those workers now have a union contract—but with an inferior pension.

Jane Slaughter is a former editor of Labor Notes.

Comments

mtnhiker | 05/27/15

This article is good for a partial story: Lets look at one of the statements. "The Teamsters pension movement has joined the Pension Rights Center, the AARP, and some unions to support a soon-to-be-introduced bill to delay or repeal the cuts and back up troubled plans.

Does anyone really think the AARP is interested in the Pensions of the Teamsters? Not a chance the AARP is interested in selling insurance and collecting dues - that is their business, if you want a company that pays their bigshots plenty then I give you the AARP.
What I find amazing here is the partial story. The author of this article seems to want 1 of 2 things. The first is to insure that the Central States Plan becomes insolvent - which means that many people who are retired get a lot less than the 30% cut, and those that are currently in the plan get almost nothing (can anyone say rehabilitation plan - something not addressed in this article) - do not be fooled it is not just the Central States plan at risk but many other Plans also.
The 2nd thing the author seems to want is a taxpayer bailout of the Central States Plan and everyone's pension to get bigger and bigger. one ahs to assume the author would like this to apply to all 1400 multi-employer plans and even those that are already insolvent While we are at it that would apply to the State of Rhode Island, the State of Illinois, Chicago, Detroit, the State of California and the list goes on and on.
Where would this end? Ask the author, that would be like asking the government to tell you what percentage of wages should be taken as taxes - or how much money a politician wants as campaign donations- they will never give you a number - they always want more.

RichardDorrough | 04/28/15

On April 8th your protest should have been at the
Almas Shrine Temple
315 K Street, NW
Washington, DC 2000
APRIL 8,2015
This is here the real group behind the attacks on our Pensioners were meeting to discuss how to now utilize their legislation and to discuss further legislation they want to pass. That’s right. They are not done yet.
Despite all the lies and misinformation this is not legislation written or created by Miller and Kline but by Union leaders who claim to champion workers and their rights. The NCCMP, made up of Union leaders like Sean McGreavy, Edwin Hill and Hoffa are behind this entire thing. These are the people, like Laborers International President Terry O’Sullivan,who takes $630,000 a year in salary plus more from such organizations as ULLICO, will not have their pensions touched. Yes the same people behind the pensions cuts are behind ULLICO as well.
It is these International Union leaders who have seized control of the members funds people who are directly responsible for this attack on our nations retirees. They are also directly responsible for the condition of any failing funds. The United Brotherhood of Carpenters General President Douglas McCarron had a letter he wrote declaring, they must pass this legislation so retirees do not became an undue burden on taxpayers, read before congress. This same Douglas McCarron who is diverting billions in Pension funds monies to finance programs like ULLICO Separate P and Separate J and my favorite the ULLICO Infrastructure fund who is in bed with the labor and trade friendly nation of China. This same Douglas McCarron who is making $528,000 just from the Carpenters and collecting a pension as he works. The same Douglas McCarron who is guilty of stock fraud has a letter read by Congress?? The same Douglas McCarron who said nothing to warn pension funds while Carpenters Multi Employer funds took losses on the same stocks he cashed in on with ULLICO.
While the NCCMP try to hide in the shadows and claim Miller and Kline are responsible for this attack the fact is they wrote it and more is coming. This is their answer to the damage THEY have done. There is no fix in this legislation but only a means for them to continue the fleecing on funds and the lining of their pockets for as long as possible. Perhaps a congressional investigation into the Unions campaign contributions to Rep Miller is in order. Instead of destroying ERISA perhaps congress shod pass laws forcing the EBSA just to do its job which it refuses to do when it comes to investigating these Union leaders abuses of their funds. Perhaps they can remove any lawyers with conflicts of interests who sit of the ERISA legal advisory committee. The lobbyist hired by the NCCMP for this legislation was and is none other than disgraced Rep. Rob Andrews (D-New Jersey), the former ranking member on the pension subcommittee, Andrews, who faced a House ethics investigation when he stepped down has since lobbied Congress on behalf of the NCCMP.
Perhaps the first step Union retires need to take is to stop financing those that are behind this attack. The Union member has no idea they have been paying $25,000 each in dues to the NCCMP ordered by their leaders. The Unions financial statements
show the very group behind this attack is being financed by the funds and members they are attacking. Demand they stop the payments. Have a look at where their money comes form. This is a monumental war for the future of retirees in this country and a war that must be fought. But first identify your real enemies.
NCCMP MEMBERSHIP CATEGORIES AND DUES
(Membership Year: June 1 through the following May 31)
· Contributing Members—$25,000
· Sustaining Members—$25,000
· Regular Members
Membership dues for funds are based on a sliding scale by plan size determined by the number of covered participants in the group’s defined benefit pension plan (size is determined based on the plan’s most recent Form 5500). If there is no defined benefit pension plan, the group’s health and welfare plan will be used. Membership dues for local unions and employers are based on the number of employees.

Pasqual LoPresti | 04/27/15

I am a member of a facebook group out of Chicago ...City Workers Past And Present. Our membership is around 2300 but its at least double that because we have many present workers reading our site but cant formally join or communicate to us for fear of retribution on their present jobs. Our site covers all workers from all city unions (police fire teachers teamsters laborers etc etc). We have a mayor who bought his re election with the backing of the 1%ers. We have a Governor who is a 1%er and bought his way in, hes 100% anti union and fighting to already make areas right to work. This within his first 100 days. Between our healthcare cuts and our cost of living cuts we are already around 25% reduction in our net retirement checks and most of us dont qualify for soc.sec. We also have many retirees at the lower end of benifits and survivors that have to choose soon between medications or food. The difference here in we have ways to dig out of this mess that the politicians put us in, but our mayor prefers to dig us deeper into a hole to bankrupt the city so his 1%ers can buy up sanitation, water etc etc and privatize for their profit. He funds private projects like building a hotel for marriot with our money that can be used to pay some pension payments past due. Our group is very interested in any movements to correct this massive theft of what we all have earned across the country. Nobody i know of retired to become rich all we want is to live in peace in a life we all worked hard to attain. There is something very wrong in this country where the rich dictate to our goverment and its people on how to live and what THEY WILL ALLOW US. Dont you think that the ratio of earnings of a major ceo of a company is 475 to 1. Theres our number 1 problem. What in the hell will they do with that money. And they crave more. This has to be corrected by the people fast and stop believing their B/S and their buying of elections. Please keep me informed or our group ... We fight as one theres our power

bvigorda | 04/23/15

What's also very disturbing is the UPS retirees are exempt from this change in law. I'd like to know how that happened? I know there are Republicans in Congress who hate the Post Office and would like to see companies like UPS take over their work. They've already done things to weaken the Post Office. I can't help but think that has something to do with it, i.e., weaken the Post Office and bolster UPS. I wish the people behind this would play political games with their own pensions and leave ours alone.

bamsden | 04/22/15

I want to thank Jane for bringing our side of the story to the public. Sadly to many people assume that this is only going to effect the Teamsters . When in fact there are 1400 Multi Employer pension plans with Millions of Retirees who don't even know this is happening. Along with all the Facebook pages we now have a world wide website to help spread the word . It's WWW.MyCSpensionhandsoff.com from there you can click on all of the Committee's Facebook pages.Please join us in this attack on our countries Retirees to help save our Pensions.