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The Central States Pension Fund is moving forward with a plan that would cut pension checks in half for over a quarter of a million former and current Teamster truck drivers.
Retired Truckers Get Shocking News of Deep Pension Cuts
Letters sent out earlier this month contained devastating news for 115,000 retired Teamster truckers — that their pension funds would be cut by anywhere from 30% to 70% starting as early as July.
The fund also plans to cut benefit for current employees.
Older Drivers May Have To Get Back Behind the Wheel
Many older or retired truck drivers will face a financial crunch if the plan goes through. Some retired drivers admit that they would probably have to go back on the road to make ends meet, though they wonder if trucking companies would even be willing to hire drivers in their 70’s. Others have suffered illness and injury after decades behind the wheel and aren’t able to go back to driving.
The cuts are happening because the Central States Pension Fund is going broke — it only has one active worker for every 5 retirees. They also say that they pay out $3.46 for every dollar they take in from employer contributions.
Representatives from the fund say that it is better to cut pensions slowly now rather than to abruptly cut them in the future. In all, they say that they need to cut benefits for 273,000 retired and future employees to avoid financial insolvency.
Pension Cuts Blamed on Deregulation and Declining Teamster Membership
The fund covers former and current employees from over 1500 companies, also including construction workers and Disney employees. Most of the participants were truck drivers and now truckers are facing the deepest pension cuts because their companies went bankrupt after trucking was deregulated in the 1980s. The fund also blames declining Union membership and economic recession.
Not All Will Experience Pension Cuts
Some retirees are safe from pension cuts. Those over 80 won’t see cuts and pension reductions will be less severe for those over 75. Reductions will also be less severe for surviving spouses.
The pension cuts are only possible because of the controversial The Multiemployer Pension Reform Act of 2014, which allows pension plans that would be financially insolvent in the next 15 years to deeply cut pension checks in order to stay afloat. Representatives from the pension fund say that it will be bankrupt within 10 years if they don’t take drastic measures.
You can get more information about the pending pension cuts at the Central States Pension Fund Website.
You can also view a video that the Central States Pension Fund created to explain the pension cuts below: