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Hoffa: Central States Shouldn’t Cut Pensions
By Teamsters General President James P. Hoffa
Published in the Detroit News, October 14, 2015
Michigan workers and retirees should be allowed to live comfortably in their golden years. But increasingly, nest eggs that everyday people contributed to are being threatened. And retirement security is being taken away.
The latest example is the Central States Pension Fund which serves hundreds of thousands of Teamsters in the Midwest, including thousands of Michiganians. Trustees with the pension plan filed a petition with the U.S. Treasury Department late last month that would cut the pensions of workers and retirees by as much as 60 percent.
As I wrote last week in a letter sent to Fund Executive Director Thomas Nyhan, these cuts are simply outrageous. Trying to prop up Central States by proposing Draconian pension cuts that will impose significant hardships on the very people the fund is supposed to serve makes no sense.
The benefits these workers and retirees earned were the result of their own hard work as well as that of their fellow Teamsters. Wiping it out in order to balance the books is tantamount to highway robbery. Thankfully, there are others who feel the same way. Sen. Debbie Stabenow, D-Michigan, took a stand for Central States beneficiaries last week when she said workers who contributed to pensions shouldn’t be facing an uncertain retirement, even if those pension funds are in a troubled state. “A pension is a promise that’s earned and workers should be able to count on it when they retire,” she said
The Teamsters wholeheartedly agree. That’s why both Sen. Stabenow and the union support legislation offered by Sen. Bernie Sanders, I-Vt., and Rep. Marcy Kaptur, D-Ohio, that would bolster multi-employer plans at the center of the dispute.
The “Keep Our Pension Promises Act” (KOPPA) would protect workers and retirees from cuts to their earned retirement benefits. The legislation would roll back provisions that were slipped into the fiscal 2015 spending bill approved by Congress last year that made earned pension benefits vulnerable to cuts.
KOPPA would restore anti-cutback rules so that retirees in financially troubled multi-employer pension plans would be protected from having their earned benefits cut. It ensures that the safety net system supported mostly by employers does not shift to one funded entirely by taxpayers.
In order to shore up the long-term sustainability of the existing federal pension insurance program, KOPPA creates a $30 billion legacy fund over 10 years, paid for by closing two tax loopholes used almost exclusively by the super-rich to avoid paying taxes.
But KOPPA isn’t the only other bill that would address the matter. New legislation by Sen. Rob Portman, R-Ohio, would guarantee thousands of retirees and workers threatened by deep cuts to their pensions a meaningful voice in deciding their own future. The Pension Accountability Act shows that lawmakers across the political spectrum recognize a fix is needed. While the Teamsters prefer the Sanders-Kaptur measure as a solution to the problem, Sen. Portman’s bill would be a start.
Either way, however, Congress is unlikely to take action unless it hears from constituents. This is where the hardworking people of Michigan can make a difference. The Teamsters are asking workers to contact their elected officials and ask them to support both legislative bills.
Central States should pull its horrific pension proposal. But if it doesn’t, this union is not backing down. And everyday Michiganians shouldn’t either.