More than a million current and retired truck drivers,
construction workers and other union employees could see their pension benefits
cut now that Congress has passed a controversial new measure. By allowing
the plans to cut benefits now, lawmakers say it will help keep around 150
pension funds from running out of money. But retirees aren't exactly seeing it
that way. Many gave up years of pay increases and contributed thousands of
dollars from their salaries each year toward their promised pensions. As a
result, many have little savings outside of their pension benefits and Social
Security checks and are not sure how they'll make ends meet if the cuts go
through.
Central States lobbied heavily for the new pension-cutting
measure, which has led many of its retirees to speculate that it will be one of
the first plans to reduce benefits. However, any cuts would ultimately require
government approval and will only be allowed at those plans like Central States
that are projected to become insolvent in the next 10 to 20 years.
Benefits also cannot be cut for those with disability
pensions or those who are 80 years and older, while cuts must be less severe
for those between 75 and 80. Central States did not respond to a request for
comment. But on its website, it says that "given the complexity of the
process, it is likely that it would take up to a year before modifications, if
any, take effect" and that retirees would receive "advance written
notice of any proposal to modify benefits."
The fund, which paid out $2.1 billion more than it received
in contributions in 2012 alone, is projected to be insolvent in the next 10 to
15 years. So officials have argued that retirees will ultimately see major cuts
either way. That's because if a multiemployer plan goes insolvent, a retiree is
guaranteed less than $13,000 a year from the Pension Benefit Guaranty Corp. In
contrast, a retiree in a single employer plan that goes bust is insured for up
to $60,000.
In the meantime, the fund's retirees and others are in
another waiting game, wondering when -- and by how much -- their checks
could be cut. Scheidt, who has mobilized with other retired Teamsters to oppose
the cuts, said he's heard from retirees across the country about the new law.
Some, he says, have broken down in tears.
Retired trucking industry worker Kirby Cabrera, 62, is
trying to stay positive. But with 20 years of mortgage payments, he too is
worried that he could face foreclosure if his current roughly $36,000 annual
pension is cut too deep.
He already faces thousands of dollars in medical bills each
year as he battles injuries from his years of working on the truck loading
docks. Two years ago, he had one knee replaced. In a few weeks, he's going in
to have the other one replaced.
Plus, he's worried that current Central State rules limiting
employment options for pensioners could hurt his ability to go back to work and
make up for any lost income. For now though, Cabrera said he is trying to stay
hopeful that any cuts won't be as deep as he is fearing,
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