Teamster members dodged deep pension cuts thanks to a Friday decision, but they remain no closer to a solution for the severely underfunded Central States Pension Fund.
The U.S. Treasury Department on Friday rejected the benefit cuts that the fund requested, handing a victory to hundreds of thousands of retired and working Teamsters who had protested the plan for months. It was the first test of a controversial law that gives trustees of distressed plans much broader authority to cut earned retirement benefits.
The $16.1 billion fund holds retirement money for more than 400,000 trucking industry workers and retirees across the country, including 22,000 in Minnesota.
Retired trucker Les Spencer of East Bethel gave a sigh of relief after he heard the news, but acknowledged that it's a stopgap. "I feel good, but let's get Congress to do something intelligent on this," said Spencer, whose pension was set to drop from $3,000 per month to $1,450.
What looms for Spencer and others is a potential combination of benefit cuts and legislative moves that make cuts more palatable.
The Rosemont, Ill.-based Central States fund faces insolvency in 10 years. It collects payments from one active worker for every three workers it pays.
Some say its only hope is a federal bailout.
Kenneth Feinberg, the administrator appointed by Treasury to implement the 2014 Multiemployer Pension Reform Act, said Friday that he rejected the Central States rescue plan because it wouldn't save the private pension fund from collapsing.