Today the U.S. Treasury rejected a proposal that would have resulted in severe pension cuts for hundreds of thousands of retired truck drivers.
Pension Plan Will Run Out Of Money In 10 Years
Teamsters Central States Pension Plan only takes in about $1 for every $3 it pays out and is expected to be financially insolvent in the next 10 years. In a desperate attempt to save the Central States Pension Plan, plans were put in place to slash benefits by as much as 70% — a move that would have proven to be devastating for the estimated 400,000 retired truckers who depend on the plan.
Treasury Sides With Retired Truckers
The Treasury found that the plan to cut benefits “failed to meet the requirement to demonstrate that the proposed benefit reductions are reasonably estimated to allow the plan to avoid insolvency.”
The Treasury also decided to reject the pension cuts because they were not equally distributed and because notices provided to the retirees about the pension reductions were not easily understandable.
The pensions are safe — for now. Legally, Central States cannot reduce pensions with the approval, but the Treasury’s decision does nothing to solve the financial insolvency issue. Central States can resubmit an altered plan, ask for help from Congress, or attempt to renegotiate benefits with retirees.
Teamsters: We Won The Battle, Not The War
A statement from the Teamsters for a Democratic Union hails the decision, but admits that there is still a long way to go toward protecting retired trucker’s pensions long term: “The grassroots campaign won this phase of the war, but more battles are on the horizon and we will need to plan our fight to maintain our earned secure retirements. The pension protection movement needs to continue to grow and play a role in finding real alternatives insuring our retirement security.”
— Teamsters (@Teamsters) May 6, 2016