Significant pension cuts loom for retirees
By Mark Williams
Sunday March 22, 2015 5:15PM
Since Whitley Wyatt retired in 2000 after 33 years as a trucker, he’s collected a pension of $3,300 a month.
Now, the 71-year-old says as much as $2,000 of his monthly check is at risk because of legislation passed by Congress last year that is meant to help underfunded multiemployer pension plans bolster their finances by giving them a way to cut benefits for some retirees.
“We definitely will have to adjust our lifestyle,” he said of him and his wife if there is a cut that big. “We have ongoing and increasing medical expenses. It could be catastrophic just from the respect of the money we contribute to charity and church (and) money we contribute to our grandkids for their future education.”
Wyatt, of Washington Court House, said he doubts many other retirees are aware of the risk to their pension as a result of the legislation passed in December as part of a spending bill meant to run the federal government through the rest of its fiscal year.
The legislation affecting the retirees was added at the last minute. It is targeted at companies that enter into pension plans with other companies.
There are about 10 million workers and retirees in 1,400 multiemployer plans, according to the Pension Rights Center in Washington.
About 150 to 200 plans covering 1.5 million workers and retirees could run out of money within the next 20 years. The measure would affect nearly 48,000 retired, inactive or active workers in Ohio.
The Central States Pension that covers Wyatt and other retired Teamsters drivers and other members is among those listed by the federal government as being in “critical and declining” status. A report from the Center of Retirement Research at Boston College found the fund could be insolvent in 12 years.
Many multiemployer funds have suffered in recent years. A big drop in union jobs, investment losses in 2001 and again in 2008, and corporate bankruptcies have left plans with more retirees and fewer workers contributing to plans.
Wyatt worked for four companies under a Teamsters contract covered by the fund, which has 65,000 active workers and 210,000 retirees and survivors. There also are about 133,000 former workers entitled to benefits in the future.
The fund has a message posted on its website, saying that it likely will take up to a year before any modifications could be put in place.
Any cut would have to be voted on by the retirees and active workers, but the way the law was drafted would make it difficult to block the reduction, opponents say.
The law is “a complex piece of legislation,” the message said. “The pension fund will need time to analyze the legislation, consult with our independent actuaries, and discuss any potential action with the board of trustees.”
But Wyatt said he knows what’s coming.
“No doubt in my mind there will be a cut,” said.
Traditionally, cutting benefits for retirees is something that wouldn’t happen, said Nancy Hwa, spokeswoman for the Pension Rights Center.
“The benefits of people who are already retired usually get the highest level of protection,” she said. “They are retired. The chance of going back to work is lower. ... A lot of them are living on fixed incomes.”
Hwa said right now, there’s no indication of which plans will cut benefits.
“It’s created a lot of fear and anxiety among retirees,” she said.
Last week, a group of about 200 area retirees met at a Columbus Teamsters hall to gather more information about the legislation and to form a committee to study ways the legislation could be changed. Similar committees have been formed in other parts of Ohio and other states.
John Brose, 63, of West Liberty, was among those frustrated about what’s happened with the legislation.
“This is money that belongs to everyone,” he said at the meeting. “We took less money for a better pension. ... That money was put in there for me.”
Fred Slaybaugh, 71, of Columbus, said it is unclear whether his entire $11,000-a-year pension is at risk given how the legislation is drafted.
Losing the whole pension would put more financial pressure on him and his wife, who have had a lot of medical bills, he said.
“I can’t go out and get another job,” he said.
Wyatt and Slaybaugh acknowledge that the pension fund is in trouble, but said no other solutions were considered that could reduce the risk to retirees, like merging funds or getting companies that participate in the fund to pay more.
“Nobody disagrees there is a problem,” Slaybaugh said. “It’s just the fact that it was rammed through overnight. It wasn’t debated. No one talked about other solutions.”
http://www.dispatch.com/content/stories/busin...irees.html
By Mark Williams
Sunday March 22, 2015 5:15PM
Since Whitley Wyatt retired in 2000 after 33 years as a trucker, he’s collected a pension of $3,300 a month.
Now, the 71-year-old says as much as $2,000 of his monthly check is at risk because of legislation passed by Congress last year that is meant to help underfunded multiemployer pension plans bolster their finances by giving them a way to cut benefits for some retirees.
“We definitely will have to adjust our lifestyle,” he said of him and his wife if there is a cut that big. “We have ongoing and increasing medical expenses. It could be catastrophic just from the respect of the money we contribute to charity and church (and) money we contribute to our grandkids for their future education.”
Wyatt, of Washington Court House, said he doubts many other retirees are aware of the risk to their pension as a result of the legislation passed in December as part of a spending bill meant to run the federal government through the rest of its fiscal year.
The legislation affecting the retirees was added at the last minute. It is targeted at companies that enter into pension plans with other companies.
There are about 10 million workers and retirees in 1,400 multiemployer plans, according to the Pension Rights Center in Washington.
About 150 to 200 plans covering 1.5 million workers and retirees could run out of money within the next 20 years. The measure would affect nearly 48,000 retired, inactive or active workers in Ohio.
The Central States Pension that covers Wyatt and other retired Teamsters drivers and other members is among those listed by the federal government as being in “critical and declining” status. A report from the Center of Retirement Research at Boston College found the fund could be insolvent in 12 years.
Many multiemployer funds have suffered in recent years. A big drop in union jobs, investment losses in 2001 and again in 2008, and corporate bankruptcies have left plans with more retirees and fewer workers contributing to plans.
Wyatt worked for four companies under a Teamsters contract covered by the fund, which has 65,000 active workers and 210,000 retirees and survivors. There also are about 133,000 former workers entitled to benefits in the future.
The fund has a message posted on its website, saying that it likely will take up to a year before any modifications could be put in place.
Any cut would have to be voted on by the retirees and active workers, but the way the law was drafted would make it difficult to block the reduction, opponents say.
The law is “a complex piece of legislation,” the message said. “The pension fund will need time to analyze the legislation, consult with our independent actuaries, and discuss any potential action with the board of trustees.”
But Wyatt said he knows what’s coming.
“No doubt in my mind there will be a cut,” said.
Traditionally, cutting benefits for retirees is something that wouldn’t happen, said Nancy Hwa, spokeswoman for the Pension Rights Center.
“The benefits of people who are already retired usually get the highest level of protection,” she said. “They are retired. The chance of going back to work is lower. ... A lot of them are living on fixed incomes.”
Hwa said right now, there’s no indication of which plans will cut benefits.
“It’s created a lot of fear and anxiety among retirees,” she said.
Last week, a group of about 200 area retirees met at a Columbus Teamsters hall to gather more information about the legislation and to form a committee to study ways the legislation could be changed. Similar committees have been formed in other parts of Ohio and other states.
John Brose, 63, of West Liberty, was among those frustrated about what’s happened with the legislation.
“This is money that belongs to everyone,” he said at the meeting. “We took less money for a better pension. ... That money was put in there for me.”
Fred Slaybaugh, 71, of Columbus, said it is unclear whether his entire $11,000-a-year pension is at risk given how the legislation is drafted.
Losing the whole pension would put more financial pressure on him and his wife, who have had a lot of medical bills, he said.
“I can’t go out and get another job,” he said.
Wyatt and Slaybaugh acknowledge that the pension fund is in trouble, but said no other solutions were considered that could reduce the risk to retirees, like merging funds or getting companies that participate in the fund to pay more.
“Nobody disagrees there is a problem,” Slaybaugh said. “It’s just the fact that it was rammed through overnight. It wasn’t debated. No one talked about other solutions.”
http://www.dispatch.com/content/stories/busin...irees.html
