Retired Teamsters take their case to Washington to fight draconian pension cuts

Retired and veteran Teamsters still employed in the trucking industry, in what union insiders say is the “biggest rebellion within the union” since the election of Ron Carey as reform-minded Teamsters union president in 1997, are staking their economic future on stopping what they call are draconian pension cuts to nearly a half-million retired union members.
 
More than 410,000 Teamsters and retirees in 25 states are threatened with pension cuts under a little-known law passed largely in secret in the final days of the last congressional session. Many veteran Teamsters say they will lose half or more of their pensions. They are not taking it quietly. A crowd of a couple of thousand rallied on the west front of the U.S. Capitol here on April 14 to rally their cause.
 
“It’s becoming a force to reckon with,” says Ken Paff, organizer of the Detroit-based Teamsters for a Democratic Union, the dissident wing of the 1.4 million-member Teamsters.
 
TDU calls the amendment that possibly could cut current retirees’ pensions by more than 50 percent a “sneak attack,” and has been coordinating protests nationwide against the cuts.
 
Besides demonstrating at state capitols in Minnesota and elsewhere in a coordinated day of action on March 31, Teamsters took their case to Washington on in a raucous but peaceful demonstration at the foot of the U.S. Capitol.
 
Many retired Teamsters say they feel betrayed because they worked 30 or more years and now all they are receiving are some broken promises with the appearance that’s OK from Washington power brokers.
 
The issue has ramification beyond trucking. In the words of the Kansas City Star, the Central States pension cuts are the test case for “making the problems of America’s festering pension systems into a personal crisis for individual pensioners.”
   
Most immediately, the Teamsters economic fates are in the hands of Kenneth Feinberg, the 70-year-old “super negotiator” and federal mediator who has handled claims for relatives of those killed in the 9/11 terrorist attacks, BP’s Deepwater Horizon oil spill as well as numerous high-profile airline and other disasters. Feinberg is due to make his recommendations by May 7.
 
Mike Walden, 66, chairman of Northeast Ohio Committee to Protect Pensions who worked 31 years for now-defunct Roadway Express and retired 2010, lives in Cuyahoga Falls, Ohio. He says his pension would be cut from around $2,900 a month to around $1,450, unless the Central States plan to cut benefits is derailed. He is optimistic those cuts will be delayed, if not deferred indefinitely.
 
“I’m pretty optimistic that Mr. Feinberg will not approve the (Central States) application because of some deceit shown and some projections that are unrealistic,” Walden told LM. “I’m optimistic because of potential lawsuits that could be filed no matter which way he goes. We also have a good group in Congress that is looking for a solution. I have spoken to many representatives and not one has said he or she disagrees with out positions.”
 
Of course, there is no way of knowing for sure how Feinberg would rule. But Teamsters were buoyed by his recent public comments on the issue.
 
“You cannot help but be affected by retiree after retiree after retiree,” Feinberg, who has attended town halls in eight states to discuss the Central States plan, recently told Bloomberg News. “On the other hand, there is a law that was passed and we have to enforce the law.”
 
The law is the Kline-Miller Multiemployer Pension Reform Act of 2014. That was a last-minute amendment to an omnibus budget bill passed last December just before the Christmas recess.

The bill was designed to cut payouts at ailing pension funds serving multiple employers to ensure their survival, but current and retired Teamsters say it’s an ill-conceived power grab that hurt the economic fortunes of millions of middle-class Americans.

Pension activists are making their voices heard even at the highest level of American politics. Democratic presidential candidate Sen. Bernie Sanders, I-Vt., and Rep. Marcy Kaptur, D-Ohio, have co-sponsored the Keep Our Pension Promises Act (KOPPA). And former president Bill Clinton has called on the Treasury Department to reject the Central States pension cuts plan.
 
“Essentially, the Treasury Department should turn down the Central States pension fund proposal,” Clinton told KSMU Ozarks Public Radio during a March 11 interview. “We don’t need any 50 percent cuts to people’s pensions that they worked their whole lives to get. And we can fix it.”
 
At issue is declining union membership in the trucking industry, which is 95 percent non-union. Central States, the largest of more than a dozen Teamsters pension plans, currently pays out $3.46 in benefits for every $1 it takes in. Central States internal documents show at current payouts, the plan will be insolvent by 2026.
 
Internal Central States financial documents show the plan had assets of $15.9 billion at the end of 2015, down from $26.8 billion in 2007. That was the year UPS, the nation’s largest transportation company, paid $6.1 billion to the Teamsters union to exit the plan. As a result, Central States’ assets fell by $9.4 the following year, 2008.
 
Teamsters are questioning whether Central States has explored all other alternatives to the proposed cuts. They also question whether the proposed cuts are equitable, and whether they even will help preserve the fund. All are open questions.
 
Walden, the retired Roadway worker from northeast Ohio, says he received a notice from Central States saying his pension would be cut, effective July 1, from $3,120.04 to $1,560.02. He says that is draconian and would cause severe financial hardship on him and his family.
 
Central States had earlier indicated that it was seeking average proposed pension cuts of approximately 22 percent. But many rank-and-file retirees say their actual cuts would be more than double that—in the 50 to 60 percent range.
 
“To me, their summary is very misleading,” Walden said.