Teamsters General President Jim Hoffa praised Feinberg and Treasury for the decision, saying it protected thousands of retired workers from “massive cuts that would destroy so many lives….”
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The Treasury Department has denied a request from the Central States Pension Fund to cut their benefits.
Kenneth Feinberg, who has duties as “special master” for the Treasury, said Friday in a news conference that ultimately a decision was made on the submission of the application and a careful reading of the law itself.
In Kline-Miller, Congress established an unprecedented process for some multi-employer pension plans to propose temporary or permanent cuts to pension checks of existing retirees. It also remains to be seen, he said, how Feinberg’s decision will affect other pension funds across the US that are presently “in the red”.
The Teamsters, meanwhile, called Friday’s news a win for pensioners nationwide. From 1989 to 1994, he worked in Washington as a reporter for the Journal of Commerce, covering the aviation and trucking industries, the Department of Transportation, Congress and the U.S. Supreme Court.
“We at Treasury do not believe that the plan as submitted will reasonably avoid insolvency”, Feinberg said.
“We notified the plan that its application to reduce benefits to hundreds of thousands of retirees was denied because the application did not meet the requirement of federal law”, he said.
If approved, the cuts would have been allowed under a 2014 federal law meant to prevent the collapse of financially troubled plans and a Pension Benefit Guaranty Corp. insurance program that guarantees a portion of participants’ promised but unfunded benefits.
Retirees, ranging from truck drivers to construction and service workers, are not happy since about ten million employees are covered by similar multi-employer plans with about one-third of those plans critically underfunded.
Central States trustees said the plan is necessary to make sure that workers and retirees don’t stop receiving benefits altogether. “We still have a huge war to fight”, said Judy Weeks, whose husband, Terry, worked for Eagle Foods for 30 years. “The cuts proposed by Central States will not take place”. Its failure could threaten the solvency of the Pension Benefit Guarantee Corporation, should it be forced to cover the Central States pension obligations. Additionally, 46 U.S. Senators signed on to a letter sent to Sec. of Treasury Jacob Lew on April 15, calling on him to carefully consider the impact the cuts could have on the CSPF retirees and ensure that all criteria are thoroughly considered before making a decision on the application. Another bill introduced this week would require pension executives to face pay cuts proportional to any reductions being proposed for retirees.
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Further, he said, the proposal did not spread the cuts fairly among participants, and Central States’ notices to them could not be understood by the average recipient, as required.
