Industry
• CNN • Dec. 22
Union retirees: Don’t cut my pension
More than a million current and retired truck drivers and other union employees could see their pension benefits cut now that Congress has passed a controversial new measure. By allowing the plans to cut benefits now, lawmakers say it will help keep around 150 pension funds from running out of money.
But retirees aren’t exactly seeing it that way. Many gave up years of pay increases and contributed thousands of dollars from their salaries each year toward their promised pensions. As a result, many have little savings outside of their pension benefits and Social Security checks and are not sure how they’ll make ends meet if the cuts go through.
"It’s devastating," said 63-year-old Dave Scheidt, who retired five years ago after more than 30 years loading and unloading trucks. "We never dreamed that our pension wouldn’t be there."
In the worst case scenario, Scheidt could see his current annual benefits of around $37,000 a year reduced to as little as $15,000. He receives his checks from the Central States Southeast and Southwest Areas Pension Fund, one of the multiemployer plans that is now qualified to cut benefits under the law.
Central States lobbied heavily for the new pension-cutting measure, which has led many of its retirees to speculate that it will be one of the first plans to reduce benefits. The fund, which paid out $2.1 billion more than it received in contributions in 2012 alone, is projected to be insolvent in the next 10 to 15 years. So officials have argued that retirees will ultimately see major cuts either way. That’s because if a multiemployer plan goes insolvent, a retiree is guaranteed less than $13,000 a year from the Pension Benefit Guaranty Corp. In contrast, a retiree in a single employer plan that goes bust is insured for up to $60,000.
In the meantime, the fund’s retirees and others are in another waiting game, wondering when – and by how much – their checks could be cut. Scheidt, who has mobilized with other retired Teamsters to oppose the cuts, said he’s heard from retirees across the country about the new law. Some, he says, have broken down in tears.
"Many will lose homes and cars and trucks because of this," he said. "These guys are scared to death."
