The U.S. Treasury on Friday rejected the Central States Pension Fund’s bid to avoid collapse by slashing thousands of retired Teamsters’ monthly checks, many by half or more.

In a highly anticipated announcement, noted mediator Kenneth Feinberg ruled that the pension fund’s proposal failed to meet legal standards set by a controversial 2014 law that makes cuts possible in severely underfunded plans.

The Treasury had appointed Feinberg — who had handled the September 11th Victim Compensation Fund — as special master in the case to rule on the proposal’s legality.

His decision means more than 200,000 retired Teamsters will continue receiving their full benefit checks each month, but their pension fund remains on a path toward insolvency in a decade or less.

Retirees welcomed the news with a mixture of relief and concern about the fund’s fate.

“Hooray. Thank God,” said John M. Cooper, a 73-year-old retired Teamster near Lawson, Mo., who was facing a 51 percent cut to his pension check.

“I’m glad it turned out the way it did so we can figure out what we’re going to do next,” said Joyce Lowe of Parkville, whose husband, Aaron, had faced a 34 percent cut to his pension checks earned over 31 years as a Teamster.

In a 10-page letter to the pension fund, Feinberg said the plan failed on three tests.

The proposal failed to reasonably show it would avoid the pension fund’s insolvency, it failed to distribute the benefit cuts equitably, and it failed to provide notices to those covered by Central States that could be easily understood by the average participant.

“We will not accept it. We cannot accept it,” Feinberg said during a conference call with reporters. “No benefit cuts are permitted pursuant to this law.”

Many experts saw the Central States proposal as a test case under the 2014 law and feared its approval would clear the path for many other shaky pension funds to cut current retiree benefits. Central States had been the first to seek approval, and others have applications pending with the U.S. Treasury.

Feinberg emphasized in his comments to reporters that his rejection of the Central States plan was not a reflection on the law. He said other proposals might be acceptable but that this one was not.

Pension advocate groups have complained about the law and have sought to change or overturn it.

Feinberg’s decision puts the Central States Pension Fund and its participants back where they started, searching for a solution to the fund’s expected insolvency. Many retirees have argued that federal involvement in the fund means the government is at least partly responsible for its financial shortfall.

U.S. Rep. Emanuel Cleaver said stopping the proposed cuts provides valuable time for further inquiry into Central States’ financial decline.

“More time is needed for the Department of Justice to investigate the management of the fund — as I have called for — and for the Government Accountability Office investigation to continue,” the Missouri Democrat said in a statement.

Central States has a long history of difficulties, including a federal intervention amid charges it was infiltrated by the mob, the collapse of many trucking companies that failed to pay the fund what they owed, and significant losses on investments during the financial crisis and Great Recession.

Central States has said its fund would need an injection of $11 billion to meet all of its promised benefits to current and future retirees.

In a statement Friday, Central States said it was disappointed by the rejection because its trustees still see the proposed cuts as the “only realistic solution to avoiding insolvency.” They also have said that it was important to approve this plan because there was no time for a “do-over” if it were rejected.

The statement also urged those who urged rejection — members of Congress, the Pension Rights Center, the International Brotherhood of Teamsters and AARP — to “take action to secure the funding needed to protect the pensions of all current and future Central States Pension Fund participants and beneficiaries.”

Central States, meanwhile, is considering its next steps.

Thousands of retired Teamsters covered by the $16 billion fund had fought for rejection of the proposal that identified more than 40,000 retirees as “orphans” and subjected them to some of the steepest cuts. Many had argued for rejection at a series of town hall sessions that Feinberg held, including one in Kansas City.

Feinberg’s decision protects their checks from the proposed cuts that would have taken effect starting July 1.

Central States covers about 400,000 pension plan participants, including about 200,000 currently receiving retirement checks each month.

Dozens of local retired Teamsters groups formed to protest the planned cuts through a series of events and rallies, including one on the Capitol lawn in Washington, D.C. The groups also have drawn attention to the 2014 law in hopes of getting it changed.