Treasury still must approve proposal from Central States Pension Fund to cut benefits
Retirees say cuts are draconian; some say benefits could decline more than 60 percent
Pension fund says without cuts, it’ll be out of money in just 10 years
Cocoa Holloway-Blankenship isn’t your typical pension rallier for the simple fact she’s not old enough to have retired.
“I’m only 36, but my back hurts like I’m 60,” she said. Holloway-Blankenship drives retired military veterans around during the day and loads UPS trucks at night in Raleigh, North Carolina. She’s also a member of the International Brotherhood of Teamsters.
Holloway-Blankenship was one of hundreds of Teamsters who rallied in front the U.S. Capitol Thursday to protest what they fear could be a decrease in their benefits if the Treasury Department approves a cut by the Teamsters’ Central State Pension Fund, under the 2014 Multiemployer Pension Reform Act.
“I wasn’t born here, my mom brought me here from West Africa, but I know you have to pay taxes to support the economy, and if you’re working, your money supports your community,” Halloway-Blankeship said. “If I’m doing something positive, you need to give me what I’m due.”
Many multiemployer pension funds, which provide retirement benefits to unionized workers employed at different companies, are covered by the reform law, but Central States is one of the first to apply to cut benefits under the law, according to the Pension Rights Center. The fund, which covers 400,000 people, of whom a little more than half are retired, is projected to run out of money in 10 years.
“I’ll lose everything,” said Pete Lomonaco, a retired Georgia truck driver and Teamster. “I’m 75 years old, and I’m going to lose my house.”
Lomonaco’s pension will be cut by 61 percent under Central State’s plan, he said. John Wilkinson, 58, said he’ll lose 43 percent. Del Viehland, a Missouri Teamster, said he knows retirees who could lose anywhere from 70 to 75 percent of their pensions. Ray Brofford, a 73-year-old retiree from Columbus, Ohio, said he’s going from getting $2,600 a month to $1289.
NOBODY WANTS TO REDUCE BENEFITS, BUT THE SIMPLE FACT IS THAT THIS RESCUE PLAN IS THE ONLY WAY TO SAVE THE FUND AND ENSURE THAT WE ARE ABLE PAY BENEFITS IN THE FUTURE.
Thomas Nyhan, the fund’s executive director
“This is devastating to me and other retirees,” Brofford said. “People can’t buy medication. They can’t afford to go to nursing homes or repairs on their house.”
Bill Jacobs, 77, a retired truck driver from Granite City, Illinois, organized two charter buses for 112 people from the St. Louis area to travel to the rally. He said if the cuts go through, he could lose $700 a month.
But he’s hopeful that won’t happen. He believed the Treasury Department will reject the Central States plan because it doesn’t meet the requirements spelled out in the law.
“Hopefully somebody’s going to explain to us how we lost the amount of money we had,” Jacobs said.
The pension fund blames many factors for the deterioration of the fund. For one, the number of companies contributing the fund has declined dramatically, according to the fund’s website. At the same time, the number of retirees is steadily rising. The fund, which currently has about $16.1 billion, claims that for every $3.46 it pays out it is collecting only a $1 in new money. At that rate, the fund will be exhausted in 10 years.
“We understand that these proposed benefit reductions are painful for our participants,” Thomas Nyhan, the fund’s executive director, said in a statement. “Nobody wants to reduce benefits, but the simple fact is that this rescue plan is the only way to save the fund and ensure that we are able pay benefits in the future.”
Retirees were told last fall that the pension fund had proposed slashing their benefits under a program that saw those who’d worked for now-bankrupt companies being hit the hardest. But few of Thursday’s ralliers were sympathetic to the fund’s problems. Many recalled days of mob influence in the Teamsters as better than the current situation.
THIS IS DEVASTATING TO ME AND OTHER RETIREES. PEOPLE CAN’T BUY MEDICATION. THEY CAN’T AFFORD TO GO TO NURSING HOMES OR REPAIRS ON THEIR HOUSE.
Ray Brofford, a Columbus, Ohio, retiree
“In the 70s, when [the pension funds] were controlled by the mob, it was 95 to 98 percent funded,” Lomonaco said.
“We just gave it from one mob to another,” said Wilkinson.
A proposed fix that provide federal funds to help shore up the fund has been introduced in Congress by Democratic presidential candidate Sen. Bernie Sanders. But the so-called KOPPA bill, “Keep Our Promises Pension Act,” faces an uncertain fate.
James Hoffa, president of the Teamsters union, told the rally that while KOPPA is important, the first step is to make certain the Treasury Department doesn’t approve Central States’ proposed cuts.
“The biggest thing is to defeat Central States’ proposal,” he said. “That’s what we have to defeat.”
Many of the retirees at the rally said they feel cheated.
“After you’ve worked for all those years, your feet are cut out from under you,” said Mike Waters, a 63-year-old Illinois retiree. “You’ve worked all your life, and your pension is your lifeboat, and they’re puncturing holes in it.”
MIKE KOZIATEK OF THE BELLEVILLE NEWS-DEMOCRAT CONTRIBUTED TO THIS ARTICLE FROM BELLEVILLE, ILLINOIS.