So much recent news about pensions tends to be negative that we want to take an opportunity to tell you about a potential positive development for Teamster pension plans.
Here’s the background: multi-employer pension plans are in a tough spot in 2015. The reasons for this situation can be narrowed primarily to two economic developments in the past ten years. First, the economic crash in 2008 and 2009 put a gigantic hole in the investment earnings and assets of most pension plans. This hole will take years to fill. The second problem involves our aging population. As the baby boomer generation moves out of the workforce and into retirement, there are more people eligible for pension benefits than workforce employees contributing into many of these plans. The combination of these two factors has resulted in a financial crisis for many multi-employers plans.
The politicians’ solution to the financial crisis for pension plans got a lot of news coverage at the end of 2014. As you may have heard, a tax bill passed at the end of 2014 also modified rules for pension plans that are in a severe economic status. The modified rules created a requirement for certain pension plans to attempt to reduce benefits for retired Union members. Reducing retired members’ benefits was the solution that the politicians came up with. The politicians’ solution gets all the news, but what we think you ought to know as Teamster members is that your International Union, various Teamster Local Unions, and many Teamster pension plans are developing an alternative that works for participating employers.
The alternative under development, called a ‘hybrid’ plan, is designed for employers who are faced with mounting liability caused by forces outside their control. The hybrid plan would allow these employers to separate out their participating employees into a separate pool so that the employer is not burdened with costs created by other employers who default. At the present time, the pension plans are awaiting approval from the Pension Benefit Guaranty Corporation (the federal agency that monitors and insures pension benefits) for the hybrid plan. If the PBGC approves the hybrid option, the Teamsters will be able to offer an alternative that allows participating employers to remain with their Teamster pension plans.
We think you the members of Local 926 should be aware of these positive efforts being made by the International as well as many Local Unions. Even though many of the most cherished Union benefits are under attack these days, it is important to recognize that there are efforts being made on a national basis to protect and enhance your Teamster benefits.