Retired truck drivers and other retirees who draw a pension from an underfunded pension plan expect to find out early this fall how much their pension will be cut.
The Central States Pension Fund has told retirees that it is wrapping up work on what it calls a “necessary and fair pension rescue plan” and plans to file it with the federal government.
A law passed by Congress last year allows “multi-employer pension plans” to reduce benefits to shore up their sagging finances.
One retiree, Whitley Wyatt of Washington Court House, doesn’t know what to expect, but he anticipates the proposed cuts will be harsh.
“Everything from 15 percent to 65 percent,” he said he’s hearing. “Honestly, no one knows for sure.”
The fund has said it is spending more money than it is taking in and that it needs to cut benefits to keep the fund solvent.
“The longer we delay, the bigger the benefit reductions will need to be to save the fund,” it said on its website. “If we wait too long, even a rescue plan with benefit reductions won’t work, and the fund will run out of money to pay any benefits.”
There are about 10 million workers and retirees in 1,400 multi-employer plans, according to the Pension Rights Center in Washington.
About 150 to 200 plans covering 1.5 million workers and retirees could run out of money within the next 20 years. The measure would affect nearly 48,000 retired, inactive or active workers in Ohio.
The fund that covers Wyatt and other retired Teamsters-represented drivers and retirees is among those listed by the federal government as being in “critical and declining” status.
“There’s a lot of stress involved. There’s a lot of waiting,” said Mike Walden, chairman of the Northeast Ohio Committee to Protect Pensions.
The fund website says that retirees will get a letter explaining its proposed changes and how it will affect their benefits.
Any cut would have to be voted on by the retirees and active workers, but the way the law was drafted makes it difficult to block the reduction, opponents say.
Last week, the Treasury Department held a hearing on regulations needed to enact the law. The department will have to approve of the pension’s fund changes.
Also, new legislation has been introduced that would provide the pension fund with financial support through new taxes on high-wealth individuals, but its prospects of passing seem remote.
Walden and Wyatt said pension cuts likely would be put in place sometime next summer.
Meanwhile, retirees will continue to lobby to overturn the law, complaining of a lack of hearings before it was passed.
“We should look at all solutions before looking at devastating cuts to retirees,” Walden said.
By Mark Williams - The Columbus Dispatch, Ohio (MCT)
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