Never heard of this plan. But a couple key points in the article need to echo in the minds of my fellow teamsters.
- The Central States pension needs to make an 11% return on its investments just to break even. Back in 2005 it was 8% just to break even. And that was before the UPS 6.1 billion dollar one-time contribution. So they hired two big name investment banks, paid them many millions in fees and are much worse off now versus then.
- Not unlike our fisical reality as a country, our liabilities far exceed our assets. In this current investment enviroment where risk is not being rewarded with return, (10 year U.S. Treasury Bond pays around 2%) earning a return of you money not on your money becomes the single most important issue. Counting on making a 11% in this enviroment is the most outlandish expectation I have heard in my 12 years as a teamster. If we have as the article says 83% of our assets in the stock market, and the market declines only slightly, we are toast. Can anyone find me a legitmate investor that is forcasting a 6 to 10- year bull run on the stock market? If so, please post.
- A Haircut is coming. Any solution will effect those currently retired and those currently paying into the pension. The longer we take to get a solution, the smaller the pie will be to fund that solution. Get to solution now so we can grow teamster jobs and pension in the future!
