Seven years ago I set up KCS with the mission to preserve and protect defined benefit plans, despite the rapid unwinding of their use in the private sector. During most of the last 7 years, I have struggled to attract opportunities that would provide KCS and my team members the opportunity to pursue this mission. We knew that there were going to be profoundly negative social and economic implications from our failure to preserve these critically important benefits (promises). But, I don’t think that we truly understood the magnitude. That is until we had the opportunity to assist the team responsible for crafting the Butch Lewis Act legislation. It has been incredibly eye-opening!
Once we got involved in that effort, it became crystal clear why we undertook this task. We tried to educate as many people as we could on the benefits of the Butch Lewis Act and the use of cash flow matching strategies to extend the life of these critically important plans that are on life support (114 plans designated as “critical and declining”). Our effort to provide our insights has lead to us speaking with and exchanging ideas with many wonderful folks around the country. Many of whom will be negatively impacted by our government’s failure to tackle this pension crisis now! One such story that was shared with us concerns Carol. The following words are Carol’s and the depth of her despair should awaken everyone out of their lethargy regarding this issue.
“CAROL PODESTA SMALLEN’s STORY”…
“I was offered an early retirement in 2001 from Teamsters local 805 while working for Panasonic. The offer was “25 and out”, I had 26 years in so my papers state that I will collect $2,600.00 a month “for life”.
I received a letter from the Teamsters in March stating their intention to cut my pension from $2,600.00 a month to $1,022.00 a month….that’s 61%. It is supposed to happen in January 2019. If they get away with this, I will lose my house. I am a 64-year old widow who can hardly afford to pay my mortgage without the cut. In fact, my pension had everything to do with my decision to buy…it pays my mortgage which is $2,300.00 a month. Anyone between 70 and 79 will have minor cuts, they are not touching anyone 80 yrs old and up, nor are they touching anyone on disability or their beneficiaries.
* I feel paralyzed. I don’t know what is going to happen to me. I have nowhere to go.
In 2015 when I had to leave my job as a para for children with autism, I didn’t worry, because I had my wonderful pension. to see me through.
*I have been under doctor’s care for the past 18 years for depression and anxiety, and I was doing fine until 2 years ago. I was forced to give up my prescription plan because I could no longer afford it, so I weaned myself off. I have since had my prescription plan renewed. I pay $1,400.00 a month for medical and $2,300.00 for the mortgage, not including any other house bills. I take in $2,600.00 Teamster’s pension, $387.00 from a small school pension and $1,600.00 death benefit/husband’s SS.
*After paying just those 2 essential bills, I’m left with $887.00 a month to pay PSE&G, Cable, car payment, car insurance, sewer, water, food, medical copay’s, etc. This is all before they decided to strip me of my “for life” pension.
* Whenever I think of it I feel like I can’t breathe.
I wrote a letter to the secretary of the treasury because the teamster’s letter states their application for the cuts is in the Treasurer’s office. But I never mailed it, because of fear that he would ignore it. I was totally alone in this until one night out of desperation, I just googled ‘HELP…the teamsters are cutting my pension and as a result, I will lose my home!’ and hit enter. A website popped up which gave me the opportunity to tell my story. I did, and the next day I was contacted by the Pension Rights Center.
*Bottom line, I am being forced to get out of my house, only I don’t have anywhere to go.
*I have no immediate family and the only savings I have is my small retirement (401 k) I earned while working at Panasonic…
*It isn’t enough to live on by itself, but I knew I would always have my pension to help me stay above water.
*I am so scared of ending up in a shelter. I am not good at legal issues.
*Every time I think of it, I shudder inside…I don’t know what to do.
On advice from Karen Ferguson of the Pension Rights Center, I watched the hearing this morning. It gave me a shadow of hope that I may not be living out on the streets and for that I am grateful.
*Since I got that letter from Local 805 back in March, my health is slipping away.
*I don’t really care about much…I have put on 11 pounds from stress eating, and my doctor put me on Lexapro for depression and anxiety.
*I have become a shell of a person who lives in fear, not knowing if I will have a bed to sleep in after January.
Thank you for giving me the opportunity to tell you my story. Sincerely, Carol Podesta-Smallen