Treasury Department Rejects Teamsters’ Central States Proposal to Cut Retiree Benefits
Proposed cuts would have slashed members’ income by 50% or more ..http://www.wsj.com/articles/treasury-department-rejects-teamsters-central-states-proposal-to-cut-retiree-benefits-1462558028
By Timothy W. Martin
May 6, 2016 2:07 p.m. ET
The Treasury Department on Friday rejected a proposal by the Teamsters’ Central States Pension Fund to cut pension checks for 200,000 retirees, according to people familiar with the matter.
It is extremely rare for retirees to ever see reductions in their pension benefit. The proposed cuts would have slashed some members’ income by 50% or more.
Central States represents about 400,000 truckers, construction and other types of service workers. Central States only has about half of the money it needs to meet future obligations, with $17.8 billion in assets versus liabilities of $35 billion.
The decision was made by Kenneth Feinberg, the star mediator, who judged whether Central States’ application to avoid insolvency followed the law and made reasonable assumptions about investment returns and membership contributions.
Write to Timothy W. Martin at firstname.lastname@example.org
It would also be very nice to one day read how "Douglas J. McCarron was blindsided by his ouster as general president!"
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Treasury rejects plan to cut Teamsters' pensions
Milwaukee Journal Sentinel 5:03 p.m. CDT May 6, 2016
(Photo: Roy Henderson, Getty Images/iStockphoto)
The U.S. Treasury Department rejected a plan Friday that would have slashed pensions promised to more than 200,000 Teamsters.
The decision deals a victory to retired truck drivers, dockworkers and others who furiously battled against the cuts, which, in many cases, would have sliced promised pensions by more than half.
"I am so proud of these retirees for standing up for themselves," said Mary Packett, executive director of the Iowa-Nebraska Committee to Protect Pensions. "I am so proud of these people who never should have had to have this fight in the first place. Somebody listened."
In Iowa, 6,700 retirees would have faced cuts proposed by the Central States Pension Fund. The fund has $17.3 billion in net assets and covers more than 250 local union shops. But it has been paying out about $3.50 for every $1 taken in and stands to go bankrupt within 10 to 15 years.
Packett, whose 76-year-old father in Paullina, Iowa, would have lost about one-third of his pension, said Friday's decision was just the first of many battles. Left unresolved, and looming, is the financially precarious position of the Central States Pension Fund, which is unsustainable in its current form and is headed for insolvency.
All the same, the rejection of Central States’ request to make cuts — reductions that would be unprecedented in a plan that still has money — buys time for the retirees and their allies. That offers them at least some hope of rallying support in Congress for a political fix to Central States’ dire problems.
"It's not over until the fund is fixed," Packett said. "We’ve got a long way to go. But we’re relishing the fact that we won one battle today. We've got a long way to go."
Packett has organized Teamsters in the Midwest and contacted members of Congress. In February, Sen. Chuck Grassley asked the Government Accountability Office to investigate the fund's oversight.
In Wisconsin, a group of Teamsters whooped loudly at Friday's news.
“I can’t stop crying, but that’s OK,” retiree Kenneth Stribling, who had faced a 50 percent reduction in his pension, told the Milwaukee Journal Sentinel. “Tears of joy.”
“Pretty ecstatic right now,” said Bob Amsden, a retiree who had been staring at a 55 percent cut and who emerged as a national leader in the grassroots effort to thwart the proposed cuts. “We took down big money, and we won the first battle. We know the war’s going to go on.”
Nearly 400,000 people either draw pensions from Central States or are eligible for them upon retirement. Of those, more than 200,000 faced benefit cuts.
Thousands of retirees, perhaps tens of thousands, would have seen their pensions cut in half, and it appears that the average reduction would have topped 30 percent.
The financial troubles at Central States run deep. As of January 2015, the plan’s $35 billion in liabilities was more than double the value of its assets, and the gap had grown by $3.5 billion since 2011.
Those problems helped drive a fundamental change in federal rules governing pensions.
Until then, as long as a plan had money, it had to pay the pension promised. But in December 2014, with the holidays approaching and a possible government shutdown looming, Congress passed a massive spending bill that, among other things, rewrote the rule book on pensions covering millions of Americans.
The changes, which critics say were enacted in haste and with many in Congress not fully understanding them, apply to “multiemployer” pension plans. Those, unlike the more common single-employer plans, cover more than one company’s workers under contracts with unions.
Such plans, prevalent in trucking and some other industries, provide pensions for about 10 million people across the country. But Central States, based in suburban Chicago, is one of the biggest multiemployer plans, with almost 400,000 working and retired participants.
The thinking behind the Multiemployer Pension Reform Act of 2014 was that if plans such as Central States' can’t cut payments, they’ll go broke, creating an even worse situation.
About 1.5 million people are in severely underfunded multiemployer plans. The federal Pension Benefit Guaranty Corp. insures those benefits, but only up to $12,870 a year.
Meanwhile, single-employer plans are insured up to $60,136 a year.
And the Pension Benefit Guaranty Corp. multiemployer program has a huge funding deficit. Before the 2014 legislation was passed, the agency said the program faced a 90 percent chance of going broke by 2025.
Many angry Teamsters have been blaming the investment practices of Central States, and its executives and trustees. Among the sore points: Thomas Nyhan, executive director of the pension fund and its companion health and welfare plan, got $32,000 more in compensation in 2014 — on the eve of the proposal to cut retirees’ pensions.
In an email, Nyhan said much of the increase was reimbursement for out-of-pocket expenses that was considered compensation for reporting purposes. He noted that two-thirds of his pay comes from the health plan, which is legally distinct from the pension fund and has different participants.
Nyhan’s employment agreement provides for a 3 percent cost-of-living increase, he said.
In any event, despite long-standing questions about how Central States is run, the most important reason for the pension fund’s precarious situation is the federal government’s deregulation of trucking, scholars who study the industry have said.
Until 1979, the government tightly controlled interstate trucking, restricting entry into the field and specifying where firms could operate. Deregulation opened the industry to thousands of new, nonunion carriers that drove down shipping rates and pushed many of the legacy trucking firms out of business.
As their numbers dwindled, so did those of the workers and companies contributing to Central States.
In 1980, with deregulation just beginning, Central States had four working Teamsters for every retiree. Today, the plan pays benefits to five retirees for every worker.
Register Reporter Kevin Hardy contributed to this story.
Akin to NYCDCC's 1994 Consent Decree, retirees in Central States and all other Funds across the U.S.A. participating in Multi-Employer Pension Plans; Congressional hacks & the NCCMP originators ensured that all rank & file members would have no "standing" to bring forth any charges or to file any countersuits in any Federal Court.
Given this fact; the "standing" denied card will be played to the hilt and the Central States Trustees / Fiduciaries will surely re-submit and amend their prior request to the Treasury Department and eventually, Feinberg will approve their request & the slashing of Retiree Pension Benefits will begin.
How many lawyers, accountants, congressman, big banks & their executives or Wall St. insiders are serving hard prison terms for the Great Recession thieving w/ the mortgage derivative scandals? How many too big to fail banking executives or investment firm executives who conjured up the racketeering scams are serving hard prison terms? The answer is simple - none!
The law slipped into the Omnibus spending bill which passed last December 16,2015 was the Pension Plan Trustee / Fiduciary Get of Jail Card and it is allowing crooks like McCarron & his corporate puppetmasters the wiggle room to again illegally use the LMRDA to impose trusteeships, raid benefit funds & offshore the monies prior to the plans formal filing for retiree benefit cuts. They'll rape the funds, the submit the plan for the benfit cuts & that is how the racketeering scam will work and when they do, you will not have the standing to sue anyone for any reason.
And people wonder why the so called "mob" exists?
The simple fact is - when the Unions, their accountants, lawyers, benefit fund trustees & fiduciaires, the Wall St crowd, the Congress, every Federal government agency including U.S. Attorneys, Department of Justice, the FBI & the Inspector General all roll over and play dead and corrupt judges go along with the known criminal racketeering schemes; the aforementioned parties justify the mobs very existence and any & all outcome flowing therefrom - as you have simply left the people no choice but to apply other rules of society which inure to even the playing field and send a clear message to all those with deaf ears.
another article - Kansas City Star
All criminal suspects are innocent until proven guilty in a court of law; or, are they?
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NLRB rejects proposal by STAFFCO (Brooklyn, NY) to cut Nurses Pension Payments after expiration of Contract, post merger:
The Respondent is a registered New York State Professional Employer Organization. The State University
of New York (SUNY) operates SUNY Downstate Medical Center (SUNY Downstate), which is an academic
medical center. In May 2011, SUNY acquired Long Island College Hospital (LICH). In connection with its
acquisition of LICH, SUNY Downstate contracted with the Respondent to hire and employ the nonphysician staff at the LICH facilities. The Respondent recognized the Union as the collective-bargaining representative for a bargaining unit of registered nurses and nurse practitioners who worked at LICH and in LICH clinics at area schools.
Following the expiration of a collective-bargaining agreement, an employer must maintain the status quo on all mandatory subjects of bargaining until the parties either agree on a new contract or reach a good-faith impasse in negotiations. Triple A Fire Protection, Inc., 315 NLRB 409, 414 (1994), enfd. 136 F.3d 727 (11th Cir. 1998), cert. denied 525 U.S. 1067 (1999).
An employer’s obligation to maintain the status quo includes “making contributions to fringe benefit funds as specified in the expired collective-bargaining agreement.” N. D. Peters & Co., 321 NLRB 927, 928 (1996). Pension plan contributions that are required by an expired collective bargaining agreement are terms and conditions of employment that survive contract expiration, and such contributions may not be unilaterally discontinued or otherwise altered absent impasse or waiver. KBMS, Inc., 278 NLRB 826, 849 (1986).
A union may waive its right to maintenance of the status quo as to a particular term or condition so long as the waiver, like the waiver of any statutory right, is “clear and unmistakable.” Provena St. Joseph Medical Center, 350 NLRB 808, 810–812 (2007). A clear and unmistakable waiver requires “bargaining partners to unequivocally and specifically express their mutual intention to permit unilateral employer action with respect to a particular employment term, notwithstanding the statutory duty to bargain that would
otherwise apply.” Id. at 811.
(ABOVE PARAGRAPH C. SEPARATED FOR VISUAL CLARITY)
Retirees may also benefit under status quo language relative to their Health Benefits contracted for (promised upon retirement) and subsequently unilaterally (post retirement) taken away by Trustees without negotiation to impasse with the retiree(s) representative.
The Trustees of the Union and the Benefit Funds are all fiduciaries; thus negotiating with themselves is not only one sided, it does not fall under mandates of the NLRA, ERISA, SEC reg's etc. and appears to be both illogical as well as illegal under current laws particularly when said operators/trustees/fiduciaries of such Funds collected the hourly contributions for all those years and Man-Hours you worked & contributed for your current Health Benefits as well as your Retirement Health Benefits under successive Collective Bargaining Agreements (CBA's).
Just because the so called operators have mismanaged/abused/stolen/off-shored funds and/or lost their asses in whatever investment vehicles their alleged brain-trust chose to invest in; said ineptitude does not amount to your having to sacrifice bargained for rights or contracted for benefits on a "because I said so" basis - the std. UBCJA & Beneift Trust Fund modus-operandi.
Racketeering charges can & should be preferred against the so called operators/trustees/fiduciaries including their legal counsel (Raymond McGuire and or his successors) both personally and professionally in their capacity at the time of such racketeering/theft/off-shoring etc.
**ALL CRIMINAL RACKETEERS ARE GUILTY UNTIL PROVEN INNOCENT IN A CORRUPTION FREE COURT OF LAW; OR ARE THEY?
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