Hundreds speak out on proposed Teamster benefit cuts

Candice Williams
The Detroit News

More than 500 people filled a public hearing Monday to speak out on proposed benefit cuts to one of the largest Teamster pension funds, which includes 30,000 members in Michigan.

Many were angry over the proposal; some were resigned but spoke out in hopes of stemming the hardship.

The Central States Pension Fund has said reductions in current and future retiree pensions, between 60 percent to 70 percent, are needed, and without them, more draconian cuts would be necessary in the future.

At least one retiree wondered who would be around for the more severe cuts.

“If they get this plan passed, who would want to join Teamsters when they just screwed 100,000 retirees?” said Fred Bora. “It’s going to have a bigger fallout. It’s really going to go down hill. We’re still going to get the short end of the stick.”

If approved, the proposal would affect 273,000 current and future retirees.

Bora, 70, of Riverview, was among the many active and retired Teamsters from all over Michigan who gathered at Wayne State University to voice their concerns over the cuts, which the Central States Pension Fund warned must be made when filing for reorganization in September. In documents government officials posted online, officials have described the fund as in critical and declining status.

Many of the retirees, mostly truck drivers, expressed their frustrations, some in tears, as they spoke of working to earn their pensions. Some also were worried about senior retirees who many not be aware of the proposed cuts.

“I worked for this. It’s ridiculous,” said Bora, 70. He retired in 2002 after 30 years as a truck driver in Local 299.

The proposal was sparked by the pension reform law in 2014. Under the Kline-Miller Multiemployer Pension Reform Act of 2014, Congress established a new process for certain multiemployer pension plans to propose a temporary or permanent reduction of pension benefits if a plan is projected to run out of money before paying all promised benefits.

If the plan goes through, Bora said, his pension would be cut from $3,000 to $1,200 monthly. He said he figures with his Social Security benefits, he’ll manage.

“We’ll make it,” he said adding, “I don’t know how.”

The Treasury Department hosted the session Monday, which followed similar meetings across the country, including stops in Peoria, Illinois; Minneapolis; and Milwaukee. The department, in consultation with the federal Pension Benefit Guaranty Corp., which insures traditional pensions in private-sector jobs, is required to review the fund’s application requesting the cuts and determine whether it meets the requirements set by Congress.

The Treasury has up to 225 days to approve or deny an application, officials said. A decision must be made by May 7.

If the plan is determined to require PBGC assistance valued at more than $1 billion if the reductions are not carried out, according to the pension fund’s application online, Kline-Miller “deems it to be a ‘systematically important plan,’ ” the documents said.

“For these large and financially troubled plans, even if a majority of the plan’s participants and beneficiaries vote against the proposed benefit reductions, the Treasury Department is required by Congress to permit the implementation of the benefit reductions or a modified version of the reductions,” the online document said.

Kenneth Feinberg, a special master for the Treasury Department’s implementation of the Kline-Miller, has worked with victims of the Sept. 11 terrorist attacks and GM’s ignition defect recall. He hosted the hearing and must make a recommendation to deny, allow or modify Central States’ request.

“There is a team at Treasury examining this thing, every page, in order to reach an appropriate decision,” Feinberg said to the standing-room-only audience Monday. “We have met with Central States early on. We will meet again with Central States.”

No representative from the pension fund spoke during the public session.

Terry Elswick said Teamsters pensioners are going to have to make a choice between medicine and food. The Detroit resident, who retired in 2011 after working 33 years for Mason-based ABF Freight, said her pension would be cut from $3,000 to $1,500. Elswick, 57, said due to health issues, she said she’s unable to return to work.

“What I’m hoping is they’ll slow things down to the point where Congress does away with this ... and starts over,” she said.

Karen Friedman, executive vice president and policy director for the Pension Rights Center in Washington, D.C., called the multiemployer pension act a “cruel and unjust law.”

“In fact, in our 40 years in existence, MPRA is one of the worse laws we’ve ever seen,” she said to applause.

She urged Feinberg to reject the pension fund’s application.

“The Central States’ application is seriously flawed and it doesn’t meet any of the conditions that were established under MPRA,” she said.

The grassroots group Teamsters for a Democratic Union said a decision to allow the cuts would be followed by a vote of all Central States participants. That vote would be conducted by the Treasury Department within 30 days of Feinberg’s recommendation.

Others also are criticizing the proposal.

U.S. Rep. Debbie Dingell last week led a bipartisan coalition of 88 representatives in sending a letter to the Treasury Department urging officials to reject the request.

“We do not believe placing an inordinate burden on middle-class workers and retirees is the only option for Central States,” said the Dearborn Democrat and her colleagues in the letter. “For these reasons and more, we urge the Treasury Department to deny this application and move forward with a more equitable solution.”

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Staff Writer Mark Hicks contributed.