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FUELING YOUR MIND FOR THE ADVENTURES AHEAD

Pension Cuts Looming for Many Retired Truckers

October 30, 2015 by Seth Sparks, @sethbsparks

There was a time when the Teamsters were one of the most powerful and thriving unions in the country. The number of members, those paying into the system, far exceeded the number of retirees, leaving no problems in meeting demands of pensions.

Today, that reality has turned upside down. Pension costs outpace the ability for funds like the Teamster-sponsored Central States to make good on the financial promises given to retirees, including many truck drivers, and are forcing the fund down the path of insolvency.

Until the late 1970s and early ‘80s, regulations kept the number of trucking companies to a minimum. A driver was much more likely to stick with a union such as the Teamsters for a long time and cultivate a pension that would lead to retirement income. But with legislation like the Motor Carrier Act of 1980, deregulation led to a higher number of small employers, which, in turn, led to the end of some centralized institutions that could make good on pension payments.

The current cuts also have much more recent roots, in particular a piece of legislation called the Multiemployer Pension Reform Act of 2014, which opened the door for struggling pensions to lower payouts and avoid folding completely. In September, Central States filed an application with the U.S. Department of Transportation under this legislation for a pension rescue plan. While it’s better to receive part of a pension as opposed to none of it, that doesn’t satisfy lifelong truckers who have banked on their promised pensions as a significant part of their retirement plans.

The Central States Pension Funds, which enrolls over 400,000 current and retired union workers in 37 states, says the average reduction in payment for the 115,500 retirees is about 28 percent. Central States is currently paying $3.46 to pensioned retirees for every dollar it brings in from employer contributions.

There is still some hope for retirees hoping that their funds won’t be scaled back. The Keep Our Pension Promises Act is one piece of legislation that would serve to protect those former truckers and their pension payments. Democratic presidential candidate and Vermont Senator Bernie Sanders introduced the bill for the purpose of providing government assistance for pension plans struggling to deliver payments.

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