Friday, July 22, 2016
Losses under Goldman, Northern Trust accelerated Teamsters cuts
And when the global financial markets crash struck in 2008, an astonishing $11.8 billion—or 40% of the plan’s total investments—disappeared that year alone. What remained and was recovered afterward couldn’t cover the fund’s long-term obligations.
Today, the Treasury Department is weighing Central States’ application to cut the retirement benefits of two-thirds of the plan’s more than 400,000 American workers, retirees, dependents and survivors who’ve have waited a lifetime for them.
The pain unfolding at the Central States fund is a cautionary tale for all Americans because it underscores the reality that no social safety net is secure.
Pension administrators in Rosemont, Illinois, made the benefits-slashing proposal under a law they themselves helped get Congress to pass. Norman Stein, a senior policy advisor at the Pension Rights Center in Washington, says House legislation authorizing the reductions was passed with “no committee vote or debate” in December 2014, as part of a much larger funding bill, and that any Senate amendment “would have resulted in a closure of the federal government.” In a letter to Treasury Secretary Jacob Lew opposing the plan, Stein argues “it is unlikely” the measure “could have survived any open and transparent legislative process.”