Found these on the Teamster website then got a notification from the CS Rescue Plan website via email. Both letters are online
https://teamster.org/sites/teamster.org/files/092215-gptonyhan.pdf
http://www.cspensionrescue.com/wp-c...T-General-President-James-P-Hoffa-9-23-15.pdf
September 22, 2015
Thomas Nyhan
Executive Director
Central States, Southeast and Southwest Areas,
Health and Welfare and Pension Funds
9377 W. Higgins Road
Rosemont, IL 60018
Dear Mr. Nyhan:
I am writing to urge that the Central States Pension Fund Trustees not vote to file a petition with the United States Department of Treasury seeking to cut the pensions of thousands of Teamster members and retirees who earned them. While the continued viability of the Fund is a concern of all of us, I urge you to focus on the impact that benefit cuts will have on the daily lives of our members and retirees.
As you know, I opposed the Multiemployer Pension Reform Act of 2014 (MPRA). I did so because I believed it unfairly shifts the consequences of unfunded pension liabilities to retirees, participants and beneficiaries by reducing their benefits. It also creates the false illusion of participatory democracy by purporting to require a vote of retirees and other participants and beneficiaries that can then be simply ignored if a negative vote would cause significant liability to the Pension Benefit Guaranty Corporation. In other words, participants and beneficiaries get to vote, but their vote only counts if they vote to cut their own pensions. The people who conceived that cynical scheme should be ashamed.
This new law effectively destroys the bedrock principle enacted in 1974 with the passage of ERISA. Instead of protecting pension benefits from impairment, as the statute was originally designed to do, it places them at risk. It literally permits underfunded pension plans to pull the rug out from under the people the statute was originally supposed to protect. Pension fund participants and beneficiaries did not cause the problem of underfunding. They worked day in and day out to earn
their pension credits. It is monstrously unfair that they will end up holding the short end of the stick when we finally get around to looking for a solution to the fact that the assets of some pension funds, like Central States, are now inadequate to cover the pension benefits that were promised.
I can appreciate the need to help the Central States Fund avoid insolvency. But, it is nothing short of outrageous that to do so the Fund may propose draconian benefit cuts that will impose significant hardships on the very people the Fund is supposed to serve.
Of course, I know I have no authority over the operations of the Central States Funds. But as General President of the IBT, it is incumbent on me to speak out on behalf of our retirees, and other participants and beneficiaries of the Pension Fund. The benefits they have earned were the result of the hard work of members of this Union. Simply to wipe out those earned benefits in order to balance the books is tantamount to highway robbery.
On September 10, 2015, I stood with Senator Bernie Sanders and Congresswoman Marcy Kaptur to promote the “Keep Our Pension Promises Act” (KOPPA). I believe this legislation, and other legislation supported by the Teamsters Union, will provide a responsible and better way to deal with underfunded pension funds like Central States. Before moving forward with a proposal to implement benefit cuts, I urge you to please work with us to find fair and responsible alternatives. With this in mind, I request that you forward to my office by October 15, 2015 all financial, statistical, economic and actuarial information that the Fund is relying on to develop its “rescue plan” so that the IBT can conduct its own review of Central States’ plan.
Please join with us on Capitol Hill to pass KOPPA. With your cooperation we can find solutions to keep the promises made to Teamster members and retirees.
Very truly yours,
James P. Hoffa
General President
International Brotherhood of Teamsters
cc: Labor Trustees
September 23, 2015
Mr. James P. Hoffa
General President
International Brotherhood of Teamsters
25 Louisiana Avenue, NW
Washington, DC 20001
Dear Mr. Hoffa:
As you are aware, in 2010, the Central States Pension Fund proposed and strongly supported what became the Casey-Pomeroy legislation that would have addressed the financial crisis facing all of the multiemployer pension funds across the United States, including ours. If passed, that legislation would have allowed multiemployer pension funds to avert the dire—and growing—financial disaster that is looming without the need to reduce the pension benefits of our participants.
But, as I know you are aware, notwithstanding the support and effort of you and many others, that bill did not pass, even in a much friendlier Congress that was more amenable to helping hardworking union families. We were told in no uncertain terms “no more bailouts.”
After Casey-Pomeroy failed, we were faced with a stark reality:
• Since trucking industry deregulation became a reality in the US, over 10,000 Teamster employers have gone out of business, including some giants of the industry. Far too many of these employers left the scene without fulfilling the pension obligation to their employees. This socked the Central States Pension Fund with hundreds of millions of dollars in unpaid pension obligations that became uncollectable, despite rigorous efforts to enforce withdrawal liability.
• Additionally, union membership has been steadily declining. In 1980, there were four Teamsters working, with employers making pension fund contributions on their behalf, for every retiree. That is now reversed. Now, there is one Teamster working to support four retirees.
• Currently, the Fund pays out $3.46 for every $1 taken in. So, that means we are annually paying out $2 BILLION more in retiree benefits than we are taking in through employer contributions.
• Without a rescue plan, the Pension Fund will run out of money over the next ten years and our retirees will face the prospect of having their pension benefit reduced to essentially zero.
That math didn’t work in 2010, and the situation has only grown more grave. As fiduciaries, we cannot stand by and allow the reserves of Central States Pension Fund to be completely depleted without taking strong action, no matter how politically unpopular.
Your proposed solution is to support the legislation proposed by Senator Bernie Sanders and Congresswoman Marcy Kaptur—The “Keep our Pension Promises Act” (KOPPA). That is indeed praiseworthy legislation. We too hope it passes. If it does, we will be the first in line to roll back any pension benefit cuts implemented through MPRA. Nobody at Central States wants to reduce benefits; so, on that issue we are in full agreement.
But we must disagree that KOPPA is a realistic option at this time. As you look at both the current composition of Congress and the political climate, it is impossible to see a scenario where a House dominated by fiscal conservatives would appropriate taxpayer dollars to support bailout legislation. Realistically, this legislation would not come close to passing in either house.
And time is quickly running out for the Pension Fund. If we invest time in pushing KOPPA without submitting a rescue plan, as our losses continue to grow, then a year from now, after the bill fails, the Pension Plan will have reached the point where it can no longer be saved---and our participants will suffer devastating losses.
The bottom-line is we can’t afford to engage in a game of “chicken” when it comes to the hard-earned benefits of our over 400,000 Central States participants. We must move forward now so that there are benefits left to pay, even if at a reduced level.
I know that you asked for some data and information. That will all be part of our comprehensive rescue plan filing to the US Department of Treasury and will be available for everyone to see online at the Treasury website before the end of October.
The numbers and facts that will be part of our filing will speak for themselves and strongly make the case that our Trustees are doing the responsible and correct thing, albeit unpopular, in pursuing a rescue plan that will save the Central States Pension Fund and allow us to pay benefits to our participants now and in the future.
Sincerely,
Thomas C. Nyhan
Executive Director
cc: Board of Trustees
https://teamster.org/sites/teamster.org/files/092215-gptonyhan.pdf
http://www.cspensionrescue.com/wp-c...T-General-President-James-P-Hoffa-9-23-15.pdf
September 22, 2015
Thomas Nyhan
Executive Director
Central States, Southeast and Southwest Areas,
Health and Welfare and Pension Funds
9377 W. Higgins Road
Rosemont, IL 60018
Dear Mr. Nyhan:
I am writing to urge that the Central States Pension Fund Trustees not vote to file a petition with the United States Department of Treasury seeking to cut the pensions of thousands of Teamster members and retirees who earned them. While the continued viability of the Fund is a concern of all of us, I urge you to focus on the impact that benefit cuts will have on the daily lives of our members and retirees.
As you know, I opposed the Multiemployer Pension Reform Act of 2014 (MPRA). I did so because I believed it unfairly shifts the consequences of unfunded pension liabilities to retirees, participants and beneficiaries by reducing their benefits. It also creates the false illusion of participatory democracy by purporting to require a vote of retirees and other participants and beneficiaries that can then be simply ignored if a negative vote would cause significant liability to the Pension Benefit Guaranty Corporation. In other words, participants and beneficiaries get to vote, but their vote only counts if they vote to cut their own pensions. The people who conceived that cynical scheme should be ashamed.
This new law effectively destroys the bedrock principle enacted in 1974 with the passage of ERISA. Instead of protecting pension benefits from impairment, as the statute was originally designed to do, it places them at risk. It literally permits underfunded pension plans to pull the rug out from under the people the statute was originally supposed to protect. Pension fund participants and beneficiaries did not cause the problem of underfunding. They worked day in and day out to earn
their pension credits. It is monstrously unfair that they will end up holding the short end of the stick when we finally get around to looking for a solution to the fact that the assets of some pension funds, like Central States, are now inadequate to cover the pension benefits that were promised.
I can appreciate the need to help the Central States Fund avoid insolvency. But, it is nothing short of outrageous that to do so the Fund may propose draconian benefit cuts that will impose significant hardships on the very people the Fund is supposed to serve.
Of course, I know I have no authority over the operations of the Central States Funds. But as General President of the IBT, it is incumbent on me to speak out on behalf of our retirees, and other participants and beneficiaries of the Pension Fund. The benefits they have earned were the result of the hard work of members of this Union. Simply to wipe out those earned benefits in order to balance the books is tantamount to highway robbery.
On September 10, 2015, I stood with Senator Bernie Sanders and Congresswoman Marcy Kaptur to promote the “Keep Our Pension Promises Act” (KOPPA). I believe this legislation, and other legislation supported by the Teamsters Union, will provide a responsible and better way to deal with underfunded pension funds like Central States. Before moving forward with a proposal to implement benefit cuts, I urge you to please work with us to find fair and responsible alternatives. With this in mind, I request that you forward to my office by October 15, 2015 all financial, statistical, economic and actuarial information that the Fund is relying on to develop its “rescue plan” so that the IBT can conduct its own review of Central States’ plan.
Please join with us on Capitol Hill to pass KOPPA. With your cooperation we can find solutions to keep the promises made to Teamster members and retirees.
Very truly yours,
James P. Hoffa
General President
International Brotherhood of Teamsters
cc: Labor Trustees
September 23, 2015
Mr. James P. Hoffa
General President
International Brotherhood of Teamsters
25 Louisiana Avenue, NW
Washington, DC 20001
Dear Mr. Hoffa:
As you are aware, in 2010, the Central States Pension Fund proposed and strongly supported what became the Casey-Pomeroy legislation that would have addressed the financial crisis facing all of the multiemployer pension funds across the United States, including ours. If passed, that legislation would have allowed multiemployer pension funds to avert the dire—and growing—financial disaster that is looming without the need to reduce the pension benefits of our participants.
But, as I know you are aware, notwithstanding the support and effort of you and many others, that bill did not pass, even in a much friendlier Congress that was more amenable to helping hardworking union families. We were told in no uncertain terms “no more bailouts.”
After Casey-Pomeroy failed, we were faced with a stark reality:
• Since trucking industry deregulation became a reality in the US, over 10,000 Teamster employers have gone out of business, including some giants of the industry. Far too many of these employers left the scene without fulfilling the pension obligation to their employees. This socked the Central States Pension Fund with hundreds of millions of dollars in unpaid pension obligations that became uncollectable, despite rigorous efforts to enforce withdrawal liability.
• Additionally, union membership has been steadily declining. In 1980, there were four Teamsters working, with employers making pension fund contributions on their behalf, for every retiree. That is now reversed. Now, there is one Teamster working to support four retirees.
• Currently, the Fund pays out $3.46 for every $1 taken in. So, that means we are annually paying out $2 BILLION more in retiree benefits than we are taking in through employer contributions.
• Without a rescue plan, the Pension Fund will run out of money over the next ten years and our retirees will face the prospect of having their pension benefit reduced to essentially zero.
That math didn’t work in 2010, and the situation has only grown more grave. As fiduciaries, we cannot stand by and allow the reserves of Central States Pension Fund to be completely depleted without taking strong action, no matter how politically unpopular.
Your proposed solution is to support the legislation proposed by Senator Bernie Sanders and Congresswoman Marcy Kaptur—The “Keep our Pension Promises Act” (KOPPA). That is indeed praiseworthy legislation. We too hope it passes. If it does, we will be the first in line to roll back any pension benefit cuts implemented through MPRA. Nobody at Central States wants to reduce benefits; so, on that issue we are in full agreement.
But we must disagree that KOPPA is a realistic option at this time. As you look at both the current composition of Congress and the political climate, it is impossible to see a scenario where a House dominated by fiscal conservatives would appropriate taxpayer dollars to support bailout legislation. Realistically, this legislation would not come close to passing in either house.
And time is quickly running out for the Pension Fund. If we invest time in pushing KOPPA without submitting a rescue plan, as our losses continue to grow, then a year from now, after the bill fails, the Pension Plan will have reached the point where it can no longer be saved---and our participants will suffer devastating losses.
The bottom-line is we can’t afford to engage in a game of “chicken” when it comes to the hard-earned benefits of our over 400,000 Central States participants. We must move forward now so that there are benefits left to pay, even if at a reduced level.
I know that you asked for some data and information. That will all be part of our comprehensive rescue plan filing to the US Department of Treasury and will be available for everyone to see online at the Treasury website before the end of October.
The numbers and facts that will be part of our filing will speak for themselves and strongly make the case that our Trustees are doing the responsible and correct thing, albeit unpopular, in pursuing a rescue plan that will save the Central States Pension Fund and allow us to pay benefits to our participants now and in the future.
Sincerely,
Thomas C. Nyhan
Executive Director
cc: Board of Trustees
