Fighting for Pension Protection

April 8, 2005

Faced with a national pension crisis, more than 250 Teamsters and benefit fund trustees met last month to plan strategic and legislative initiatives that will protect and strengthen multi-employer pension plans.

“We are fighting to protect and fortify our pensions,” said Jim Hoffa, Teamsters General President. “That means getting legislative relief in Washington and taking hard stances in negotiations with employers. These are tough times for pension plans across the board. And thanks to our strong contracts, Teamsters face more secure retirements than nonunion workers.”

The unprecedented stock market decline starting in 2000, and historically low interest rates, have had a devastating impact on all pension plans. These difficulties, combined with a drop in the number of plan participants and an increase in retirees, have created the perfect storm that pension funds now are trying to weather.

Improved investment returns in the past two years have helped slightly, but many plans still face significant funding problems because assets have fallen so much. Recent gains will not be fully recognized for several years due to restrictions in pension laws.

Last year, Congress acted to bail out companies that participate in single employer pension plans, but did nothing to resolve the same problems affecting multi-employer plans that guarantee the retirement security of union members.

Under the leadership of General President Hoffa, the Teamsters Union has launched a massive national campaign to pressure Congress to pass pension protection legislation that gives multi-employer plans more flexibility to strengthen the system. The Teamsters are building a powerful coalition that includes other unions, retirees and employers. Members and retirees are signing petitions to urge Congress to pass pension protection legislation this year that will give multi-employer funds economic relief.

"Congress ultimately holds the solution to the retirement crisis facing American workers," said Mike Mathis, Teamsters Government Affairs Director. "The Bush administration doesn't care about the nine million workers in multi-employer pension plans, or the hundreds of employers that will face financial turmoil if these plans fail. The administration wants to weaken and destroy the labor movement, and views the demise of pension plans as the way to do it.”

The pension crisis is part of a larger assault on Americans' retirement security. The majority of Americans don't even have a pension. Only 44 percent have an employer-sponsored pension, while more than 70 million Americans rely completely on their savings and Social Security checks for their retirement income.

Pension plans are in danger of becoming extinct. Employers are increasingly shifting risk onto workers through 401(k) plans that do not guarantee a stable, monthly benefit for life, such as pensions and Social Security. Many employers are dumping their plans onto the government, causing massive deficits at the Pension Benefit Guaranty Corp.

“I'm calling on all Teamster members to stand together to fight for our pensions and Social Security,” Hoffa said.

Trustees are aggressively protecting Teamster pension plans and finding innovative ways to secure members' benefits. Charlie Byrnes, Trustee and Secretary-Treasurer of Local 926 in Pittsburgh, is taking on employers and asking tough questions.

Byrnes said employer trustees were being paid $600 a month to attend trustee meetings. Byrnes cut back on meetings to save money by holding them every other month. He started asking tough questions, demanding that money managers justify their costs and provide discounts.

 “Don't let them confuse you. Don't be afraid to ask questions,” Byrnes said. “It's our fund. It's our money. Without the Teamsters there wouldn't be a fund.”

 "Teamsters will do whatever it takes to protect members' pensions," said John Murphy, Eastern Region Vice President and Trustee. “We have an obligation to make sure the future of the benefit fund is there. We will take any action necessary to ensure that promise is kept. It's going to call for a lot of creative thinking.”

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