One of the Teamsters’ largest pension funds, the decades-old Central States Pension Fund, has told more than 400,000 workers and retirees that it must slash their benefits, in some cases by 50 percent or more.

Central States has faced financial troubles for years, if not decades, but the decision to cut benefits came late in October after the fund filed for reorganization under a new federal law that allows payments to current retirees to be decreased when a multi-employer pension plan is headed toward insolvency.

About 220,000 of the affected workers are already retired and receiving benefits, while the rest are eligible to receive pensions later.

The fund’s board feared that if current benefit payouts were not cut, the $18 billion fund, which as of January 2014 faced $35 billion in liabilities, would become insolvent. It has been paying out $3.46 in retiree pension benefits for every dollar it receives in employer contributions.

Retirees who are 80 or older will not see any reduction in their pensions while those ages 75 to 79 will be cut, but less so than younger retirees.

The benefit-cutting plan was filed on Oct. 15 with the Treasury Department, which has 225 days to approve or deny it.

Milwaukee Journal Sentinel, Oct. 19
The Toledo Blade, Oct. 15