The Central States, Southeast and Southwest Areas Pension Plan lost $557 million in assets during the first quarter of 2020, according to the fund’s Financial and Analytical Report.
The group Teamsters for a Democratic Union (TDU) says in a statement that data from the report “make it imperative that our union, locals, members and retirees work to win passage of federal legislation which protects the earned pensions of Teamsters and all workers. This is especially true in this crisis period of a pandemic and a deepening recession.”
The TDU points out that the fund did not lose much in the stock market crash in March because only 7% of assets are invested in stocks. “Presently, the fund has no stock holdings, with 99% in bonds. This is a defensive posture as the fund’s assets steadily decline,” the statement says.
The financial report shows there are 47,574 active participants while 198,366 retirees are drawing pensions—a ratio of more than four retirees to each active participant. In the first quarter, the fund paid out $711 million in benefits, and it took in just $156 million in employer contributions.
The Central States plan had applied to the Treasury Department for a suspension in benefits as set forth in the Multiemployer Pension Reform Act of 2014 (MPRA). However, the Treasury denied its proposal.
The TDU notes that the U.S. House of Representatives passed a stimulus bill in mid-May called the Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act which includes a proposal similar to one put forward by Senators Chuck Grassley, R-Iowa, and Lamar Alexander, R-Tennessee. The legislation includes “special partition relief” for struggling multiemployer union pensions, detailed in a section of the Heroes Act referred to as the Emergency Pension Plan Relief Act or “EPPRA.”
“More pressure from members and unions is needed to move this legislation,” the TDU says.
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