About 22,000 ballots will be mailed to pension plan participants in Western Pennsylvania for a vote on a 30% benefit cut proposed by the plan’s board.
The ballots are being authorized after the U.S. Department of Treasury approved the Western Pennsylvania Teamsters and Employers Pension Fund’s request submitted last September to cut benefits. The plan represents about 17,000 retirees and 5,000 people who are working and paying into the fund.
In a letter dated May 7, the Treasury Department sent its decision to the pension board. The pension board is working to send a roster of eligible voters to the government’s mailing vendor by May 14. By law, the voting period lasts no fewer than three weeks from the date the ballots are distributed.
The Teamsters’ fund is one of hundreds of multiemployer pension plans that cover workers who are employed by several employers in the same industry or who are represented by the same labor union. Those plans, which cover nearly 11 million retired Americans, were established by collective bargaining agreements.
As the industries that were connected to the funds declined, many multiemployer pension plans began to struggle under the weight of obligations.
The Teamsters plan’s board has presented the collective benefit cuts as absolutely necessary to save the plan from insolvency. The pension board can make cuts because of a 2014 law signed by President Barack Obama.
Pension reform in Congress has repeatedly failed. The most recent — and perhaps most promising — effort fizzled out after a special bipartisan committee adjourned in December with no deal.
For the Teamsters’ plan, the financial situation has grown steadily worse. The plan covers people who worked union jobs as freight truck drivers and mechanics; toll collectors and parking lot attendants; grocery store cashiers; staff at prisons, law offices and hospitals; garbage handlers; Pepsi bottlers; and food service staff at PNC Park.
In the last two years, the Teamster pension fund has shrunk as fewer people pay into it and more people draw benefits. The plan has been selling off $8 million in retirement fund investments each month to pay benefits, the fund’s attorney, Jason Mettley of the Downtown law firm Meyer, Unkovic & Scott LLP, said in January.
In a phone call Friday, Mr. Mettley said the ballots would spell out the specific benefit cuts for each participant. A “frequently asked questions” page will be online soon, he added, on the pension fund’s website: http://www.wpapensionfund.com.
Participants can vote “Yes” to approve the cuts or “No” to reject them. Ballots not returned are automatically counted as a “Yes,” Mr. Mettley said, which makes it a high hurdle for participants to reject the cuts.
No pension plan has ever voted down cuts proposed by a pension board.
Source: Pittsburgh Post-Gazette