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  1. #1
    I Am Rocking Now

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    Default Central States Pension Fund Warns of Insolvency



    May 27, 2010

    Central States Pension Fund Warns of Insolvency

    by William B. Cassidy

    Teamster fund could collapse unless ‘orphaned’ retirees are ‘partitioned’, director warns


    The Teamsters union’s Central States pension fund faces insolvency within 10 to 15 years unless Congress acts to stabilize the fund, its executive director said today.

    Responsibility for benefits paid to employees of failed companies should be transferred to the federal Pension Benefit Guaranty Corp., Thomas C. Nyhan told a Senate committee.

    “I urge Congress to enact the ‘qualified partition’ proposal this year,” Nyhan said at a hearing held by the Senate Health, Education, Labor and Pensions Committee.

    The Pension Benefit Guaranty Board is already taking action. Today it approved the division of the Chicago Truck Drivers, Helpers & Warehouse Workers Union (Independent) Pension Fund into two plans — one for retirees of bankrupt firms and one for those of companies still in business.

    The Central States fund is one of the largest multiemployer plans in the country, covering nearly 342,000 retirees and their survivors and 81,000 active employees.

    The fund faces an “unprecedented financial crisis” caused by consolidation in the trucking industry and the worst recession in decades, Nyhan said.

    More than 40 percent of the fund’s benefits are paid to “orphaned” employees of defunct companies, he said, and responsibility for those benefits rests with surviving companies.

    That is putting stress on companies such as YRC Worldwide, he said, that must support the benefits of thousands of retirees who never worked for its businesses.

    “When an employer with an underfunded corporate plan goes out of business, the PBGC (Pension Benefit Guaranty Corp.) assumes the obligations,” Nyhan said.

    “When a company in a multiemployer plan goes out of business without paying its share of the liabilities, it is the surviving employers … that assume the liabilities.”

    An increase in contributions as the number of retirees grows could force more and more of those surviving employers out of business, leaving the fund insolvent, Nyhan said.

    More than 600 trucking companies that contributed to the fund in 1980 are gone, he said, noting that of the top 50 employers in the fund in 1980, only four are still in business.

    continued

  2. #2
    Resistance is futile.

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    Default Re: Central States Pension Fund Warns of Insolvency

    Something must be done for sure.

  3. #3
    I Am Rocking Now

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    Default Re: Central States Pension Fund Warns of Insolvency

    I wonder why it is that they never address the reasons why the pension funds are so grossly undrfunded?

    Why was it that the most successful company in the shipping business, UPS underfunded the CSPF $6 billion dollars? Ya that billion with a b. They had the money in the bank and didn't have any problem paying up when they were ready to withdraw.

    Why is it that UPS, Yellow, CF, Roadway, New Penn, ABF, Carolina, St. Johnsbury, Holland, Red Star etc etc etc etc made record profits back in the day but were allowed to under pay the pension contributions that they were contractually obligated to make into our funds?

    We did the work and they reaped the profits but didn't live up to their obligations. If it was legal and the Feds wrote the law then the Feds should step up and make things right.

  4. #4
    "the real boss"

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    Default Re: Central States Pension Fund Warns of Insolvency

    Quote Originally Posted by 2631 View Post
    I wonder why it is that they never address the reasons why the pension funds are so grossly undrfunded?

    Why was it that the most successful company in the shipping business, UPS underfunded the CSPF $6 billion dollars? Ya that billion with a b. They had the money in the bank and didn't have any problem paying up when they were ready to withdraw.

    Why is it that UPS, Yellow, CF, Roadway, New Penn, ABF, Carolina, St. Johnsbury, Holland, Red Star etc etc etc etc made record profits back in the day but were allowed to under pay the pension contributions that they were contractually obligated to make into our funds?

    We did the work and they reaped the profits but didn't live up to their obligations. If it was legal and the Feds wrote the law then the Feds should step up and make things right.
    COMPLETELY right, not just pennies on the dollar.

  5. #5
    I Am Rocking Now

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    Default Re: Central States Pension Fund Warns of Insolvency

    Quote Originally Posted by NikDiesel View Post
    More than 40 percent of the fund’s benefits are paid to “orphaned” employees of defunct companies, he said, and responsibility for those benefits rests with surviving companies.
    1 of the best things about working for a union company was the fact that they offered a payed pension plan. I don't ever remember anyone telling us that it would be a great pension only if the companies stay in busness long after we retired.

    How in hell can the CSPF or any fund tell a man who retired from CF or Spector 30 years ago that he is now an "orphan" and the PBGC will only pay him 35% of his $1,000 a month pension?

  6. #6
    I Am Rocking Now

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    Default Re: Central States Pension Fund Warns of Insolvency

    I've lost my faith in Pensions. Between that and SS I fear I will be a very poor man.

  7. #7
    On A Mission

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    Default Re: Central States Pension Fund Warns of Insolvency

    Well it seems to me that we have one last hope and she has been appointed to the board of directors of YRC by the Teamsters.....She has been pretty vocal about getting rid of 401 K's and getting back to pensions. Who knows if she is onto something...I know alot of people took hits with some of their personal retirement plans and it really screwed up their retirement plans.
    Last edited by slavenomore; 05-28-2010 at 07:40 PM.

  8. #8
    Self-exile

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    Default Re: Central States Pension Fund Warns of Insolvency

    Quote Originally Posted by NikDiesel View Post





    More than 600 trucking companies that contributed to the fund in 1980 are gone, he said, noting that of the top 50 employers in the fund in 1980, only four are still in business.

    continued
    Are we ever going to have a day when there are decent paying jobs with benefits and pensions for everyone? In 1980 we had double digit unemployment and a recession. But we had companies that were surviving and we had a hope for a job.

    Today we have the same economic problems. The few companies that are making money pay low wages and no benefits to workers who are afraid to fight for more, because they may loose their only chance for a job. The people in favor of total government deregulation and free trade to promote capitalism, are forcing us all into a socialist society. A society of total government control, where everyone depends on the government to guarantee us an income and medical care. We flood the country with immigrants so there will be plenty of workers to do the low paying jobs in case someone tries to fight for more. And all the politicians see are more voters, dependent on the government to survive.

    And now we are waiting for the same politicians who put us into this situation to save our Union pension funds? I would rather see us increase the number of Union companies, increase the number of Union workers. Then we are going to have to increase what we and the companies pay into the pension. The plan of letting fund managers gamble the pension in the stock market, to make up for not collecting enough funds is not working. We need better management of the funds we have.

    If we can not do this ourselves, the government will own us. And I don't believe they want us to succeed and prosper.

  9. #9
    Teamster2008
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    Default Re: Central States Pension Fund Warns of Insolvency

    Multi employer pension funds are a thing of the past. The law must be changed and if the republicans succeed in blocking Bob Casey's bill. Then the multi employer pensions will go belly up, and everyone who is in one will have their benefits cut by 2/3 or more.

  10. #10
    I Am Rocking Now

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    Default Re: Central States Pension Fund Warns of Insolvency

    Quote Originally Posted by strapdrager View Post
    I've lost my faith in Pensions. Between that and SS I fear I will be a very poor man.
    strapdrager, I still have faith in my government. Congress raided the fat Social Security Trust Fund and used those moneys for other purposes. I am confident that they will refund it and that my government will not let it fail.

    I am also confident that my government, in spite of Republican opposition, will do the right thing and update the pension laws to protect our funds. They corrected flaws in the Taft Hartley law by creating ERISA & PPA. So it makes sense that they will pass the PB&J & Sen. Casey's bill in some form.

 

 
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