The financially strapped Teamsters Central States Pension Fund will pursue benefit cuts to retirees — including thousands in Minnesota — under a new federal law co-sponsored by Rep. John Kline, R.-Minn.
At a meeting in a Chicago suburb Wednesday, the fund’s trustees told union leaders from across the Midwest that they will pursue a “rescue plan,” said Trevor Lawrence, secretary-treasurer of Teamsters Local 638, which represents workers in Minnesota and North Dakota.
“Everybody came out thinking there will be cuts,” said Lawrence, who attended the meeting. “I don’t think anybody was happy. But the people in the room understood if you don’t do something now, the cuts will be deeper later.”
The Central States Pension Fund, which serves roughly 410,000 participants, is having trouble taking in as much in investments and member contributions as it pays out to retirees. If that situation remains unchanged, the fund’s trustees say the plan will become insolvent within roughly a decade.
The fund will send a preliminary letter to some pensioners this week describing its intentions to reduce benefits. But the size of the cuts and when those cuts will take effect depend on approval of a benefit reduction plan by union members and the U.S. Treasury Department.
Lawrence said the Central States Fund is seeking Treasury Department guidance with an eye toward making a summer proposal detailing the cuts. The cuts, he said, likely will not go into effect until 2016.
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