For those of you who have a lot riding on the passage of legislation to preserve and protect multiemployer pension plans, especially those plans deemed to be in “critical and declining” status, whispers out of Washington DC should be alarming. It appears that the Butch Lewis Act legislation will undergo “significant” change before a final bill is formed. Regrettably, I’ve been told that benefit cuts are on the table as part of the negotiation. This is incredibly unfortunate and truly UNNECESSARY!
Anyone who has read a previous KCS blog post knows that the actuarial team from Cheiron did yeoman’s work to test and retest the solvency of C&D plans that receive loans from the US Treasury through the potential formation of the Pension Rehabilitation Administration (PRA). Of the 114 plans reviewed, all but 3 were able to maintain solvency while meeting existing promises and at a projected return on asset assumption of only 6.5%, which is much lower than most plans are forecasting today. The three plans that need PBGC assistance need only about 1/3 of the amount needed to protect and preserve these C&D plans should they be allowed to fail.
So we ask: why the benefit cuts? Doesn’t the Joint Select Committee understand and appreciate that the benefit payments to these retirees stimulate economic growth primarily in the local economies where they reside? The cumulative economic impact from all of these retirees is substantial. Furthermore, the average benefit payments to these individuals are very modest, and should these plans fail, PBGC support will provide benefits which equate to only pennies on the dollar for the recipients.
There has been a tremendous grassroots effort to protect and preserve these pension systems and their promised benefits, but more absolutely needs to be done at this stage. There is no need to punish the retirees because of the failure of the system to protect and preserve these pension plans. The US government enjoys the benefits of having a fiat currency to use as it sees fit. There is no excuse to get penny wise, but pound foolish at this time.
One last thought. The US Federal Reserve’s balance sheet earns more money from interest in one year than it would take to fund all of these critical and declining plans with LOANS (not bailouts). Let’s dedicate 2019’s interest to finally solving this crisis unless you really want millions of Americans to suffer the consequences of inaction or worse, foolish decisions.
All our teamsters have worked hard all these years to secure a good pension for themselves and their family! Now when some have major health problems and are not able to work,the percent they want to cut is ridiculous,they will have the government putting them in a position to need assistance they shouldn’t have to ask for!! Shame on the ones that were in charge of our pensions but doesn’t affect theirs! Wife of a Yellow Freight Road Driver of 36 years!
It is so short-sighted on the part of our government officials to discount the positive impact of economic activity that is generated by these monthly benefit checks. Furthermore, how do they not see that a significant reduction in benefits won’t lead to a massive increase in government support for all those impacted?
Thank you Russ!!
I can’t believe all the unnecessary stuff the government spends money on that they wouldn’t do something to save a lot of retirees livelihood. Surely they have to realize that this will hurt a lot of companies !
THIS IS WHY WE NEED YOUR HELP MR. KAMP…WE know the NCCMP has plans for their Big Corp Clientele Agenda that have WANTS of their own, BUT THE DEVASTATION OF THE PENSIONERS “NEEDS” WILL NOT BE SO EASILY DISMISSED… Another Story of Survival Today…https://www.facebook.com/TeamPenCrisis/posts/2120485841533526?__xts__%5B0%5D=68.ARBYvVknAiX4Stkl3_r9h3rHRZMulyhLcC8TDCogt1jKjMycGedCO0ls99104_lAZyE2ghypbleniEJRXoLNeiNffLaabBhRAayrKo3HQn8k6JzLaFW44g8HxORwDX7iJ9e8kXagjvo-&__tn__=-R
Teamsters Pension Crisis Quick Reference Chart of ECONOMIC DEVASTATION..
95% NOT ABLE TO WORK..
72% PRIMARY CARE RESPONSIBILITIES FOR AILING LOVED ONES..
65% UNABLE TO MAINTAIN HEALTH CARE INSURANCE..
60% LOSS OF HOME..
19% RETURNING CHILDREN OR ASSISTING SCHOOLING..
80+% LIVING CHECK TO CHECK.
100% PBGC MAXIMUMS INADEQUATE..
WE appreciate you reposting Carol’s Story, it speaks to the not only economic & financial destruction but also the Emotional destruction all must face with so many, over 80% living Check to Monthly Benefit Check. We learned early on when CSPF CUTS letters came out that one around the Kansas City area had committed Suicide, there is rumor of another in CS, then we get stories with so much desperation expressed that any more actual bad news could irreparably damage more’s Hope of Survival. How can Congress be so opinionated not to use the “BLA” to be the answer ?? Politicians can’t pronounce Actuarial Science that it won’t work… Unless on the payroll of NCCMP… If that’s the case they need to have all Actuaries pro & con gathered for a debate in DC ..
In your expert opinion, what would be the benefit of a loan program that requires cuts, If this is the ‘whisper’ being considered, to what end does it benefit all ?? The NCCMP Discussion Draft, mentions on page 6 or 7 that loan proceeds under their plan ARE NOT TO BE USED TO SECURE BENEFITS.. Is this NCCMP agenda what is confounding any reasonable FIX, such as the BLA. WE feel that with you on board they can not just throw the term BAIL OUT on the BLA and have any credibility… Is this , in your opinion a case of Corp WANTS over the NEEDs of the needs of the pensioner. Something strange is going on in regard to CSPF’s part in all this and WE feel that Trustee Thomas Nyhan’s conflict of interest being on the NCCMPs steering committee making the BLA difficult to pass. They were against it, then for it, now against it again. But the NCCMP has their hands in every aspect of legislation and Congressional influence. Research shows not only the GROW ACT which would provide a way forward after this Crisis is solved but no talk of how to settle, then we find 117 pages of answers to Congressional JSC Appointee questions, which is their Constitutional right to do even though they don’t constitute a “WE the People” type, but rather an Anthropomorphic concept of their Entity. Then all the other social media out reaches that speak of BLA not being able to go forward, like Ingram group, POWER, and other groups… the Ingram group out of TN has connections to Sen Alexander and JSC Rep Roe …being noted that “R” side politics are very anti union, with around 50% of Voting pensions being “R”, how can they have their voices heard ?? They can’t politics it seems takes precedence over Humanity…the NCCMP for what ever reasons should not setermine our futures because of Congress reliance on them as the Go To Experts.. Our Voices need to be heard too and acted upon. I’ll just be blunt, “IS THE NCCMP the MAJOR FACTOR PREVENTING THE BLA ??? YES OR NO… IS DESTRUCTION OF COLLECTIVE BARGAINING THRU UNIONS THE REASON FOR “R” SIDE OPPOSITION TO WORKING FOLKS”?? YES OR NO, just your opinion… WE have to know and fully understand the involvement of Politics and Big Corp in all this…
Good afternoon, John. I know of no reason why the loans should be provided only with the provision that there be reductions in benefits, too. In the analysis that was done by Cheiron (actuary) 111 of the 114 plans were able to repay the loan, provide promised benefits, and not need PBGC assistance, while only having to achieve a 6.5% annual return on assets assumption. Republicans claim to want smaller government and more fiscally sound budgets, but they must realize that the reduction in benefits will impact the government’s social safety net and the broader economic environment. I could understand the R point of view (from their hymnal) if these were in fact bailouts, but it has been demonstrated that they aren’t. Furthermore, the US enjoys the benefits of possessing a fiat currency and as such, will always have the ability to meet future obligations. Tell them to study MMT to learn more about how the US monetary system truly functions. Last point: if they dont want to create a new agency within the Treasury, they could just use <1 year of the proceeds from the interest payments received by the Federal Reserve's balance sheet (roughly $90 billion).