NY Teamsters Pension Becomes First To Run Out Of Money As Expert Warns “Pension Tsunami” Is Coming
This is the first of what looks like many pension defaults, as the reality hits that promises were made that could never be kept. Pensions have been underfunded for years, as promised payments reached astronomical heights. Now, those pensioners who are seeing their pensions cut drastically will be very unhappy, and will go through very difficult times.
Union pension funds of all sorts, from Teamsters to Public Employees, are in trouble. Promises will not be kept. That is the new reality. – Shorty Dawkins
This article comes from ZeroHedge.com
The New York Teamsters Road Carriers Local 707 Pension Fund has won the unfortunate award for “First Pension to Officially Run Out of Money.” According to the New York Daily News, and a host of angry former truck drivers who’ve had their pension benefits slashed, the Pension Benefit Guaranty Corp. (PBGC) has officially been forced to step in and take over payments to retirees of the Local 707, albeit at a much lower rate.
Teamsters Local 707’s pension fund is the first to officially bottom out financially — which happened this month.
“I had a union job for 30 years,” Chmil said. “We had collectively bargained contracts that promised us a pension. I paid into it with every paycheck. Everyone told us, ‘Don’t worry, you have a union job, your pension is guaranteed.’ Well, so much for that.”
“It’s a nightmare, it has just devastated all of our lives. I’ve gone from having $48,000 a year to less than half that,” said Chmil, one of five Local 707 retirees who agreed to share their stories with the Daily News last week.
“I don’t want other people to have to go through this. We need everyone to wake up and do something; that’s why we’re talking,” said Ray Narvaez.
Of course, the Teamsters 707 and other Teamster pension boards attempted to submit plans that would have cut benefits in order to prolong payments to retirees but those plans were universally rejected by the Obama administration…better that the pensions just run out of cash completely. Per Pensions & Investments:
The Obama administration is in denial about the necessity of cutting pension benefits under the Multiemployer Pension Reform Act of 2014 to try to put distressed multiemployer plans on sounder financial footings and make them more sustainable. It must face reality and order the Treasury Department to stop blocking action.
So far the department, required under the act to approve proposed reductions, has rejected proposals by the Teamsters Central States, Southeast & Southwest Areas Pension Plan and the Road Carriers Local 707 Pension Fund.
Ten plans total have applied for cuts, including the New York State Teamsters Conference Pension and Retirement Fund, Syracuse, whose Aug. 31 application is too new to be listed on the Treasury’s website.