Will Teamsters' pensions be saved?
Mike Walden came to Independence on Thursday to deliver a ray of hope to a room full of retired Teamsters facing big cuts to their pensions.
He said he has gotten “hints” that the Central States Pension Fund’s plan to slash their monthly checks, many by half or more, will be rejected next week.
The U.S. Treasury faces a deadline next week to decide whether the proposed cuts are legal under a controversial 2014 law that makes the action possible.
The decision will affect about 400,000 people, retired and otherwise, who are covered by the failing pension fund. Central States sought government approval to cut benefits to avoid its own collapse and an end to all benefit checks in about a decade.
A decision to reject the proposal would protect current benefits from cuts set to take effect July 1.
“I’m not going to tell you that’s a fact,” Walden said of his prediction the plan would be rejected.
Walden is among those with a pension at stake. He’s a retired Teamster from Ohio who has spent a lot of time in Washington attending hearings, working with various agencies and lobbying lawmakers to block the proposed cuts and overturn or change the 2014 law. He was a central organizer in a pension rally recently on the Capitol lawn.
Walden said he found hints of a rejection in a conversation he had with Kenneth Feinberg.
Feinberg is the noted mediator who handled the September 11th Victim Compensation Fund and has been appointed by the U.S. Treasury to decide whether Central States’ application complies with the law.
Walden said the hints came in questions that Feinberg posed during the talk and in smiles Feinberg gave at key points of the conversation.
“I’m not the only one,” Walden said, noting others have spoken with Feinberg. “They have told me they also are getting something of a hint that he’s going to deny the application.
“Naturally, we’re all hoping Feinberg will deny the application.”
Feinberg could not be reached Thursday.
In an email, a Treasury spokesman said the agency “has until May 7th to approve or deny this application and we cannot comment on our ongoing review.”
Feinberg has lent thousands of retired Teamsters his ear through a series of town hall meetings, including one in Kansas City earlier this year. He also has made clear that his only job is to decide whether the Central States proposal meets the terms of law.
If Feinberg accepts the proposal as legal, those covered by the fund vote on the proposed cuts. The U.S. Treasury said it would be required to override a collective “no” vote if it found Central States is systemically important.
Many expect a failure at Central States to lead to a failure of the portion of the Pension Benefits Guaranty Corp. that covers pension plan benefits.
Central States Pension Fund said it expects to go broke in about a decade unless benefit cuts are made immediately or unless it could gain about $11 billion in new funding. The fund held about $16 billion at the end of last year.
Walden, while offering hope about next week, reminded his audience that stopping the proposed cuts won’t solve their pension fund’s looming financial problems. He said even the proposal to save the fund through benefit cuts and investment gains won’t work.
“We have to get creative and come up with other solutions,” Walden said.