Teamsters Activists Move To Prevent Slashing of Hundreds of Thousands of Retirees’ Pensions

With a key deadline looming early next month, pension activists in the Teamsters union are turning up the heat to head off government action that will slash the incomes of hundreds of thousands of union retirees who receive benefits from the Central States Pension Fund, and set a dangerous precedent for millions more.

The retired union members are concentrated on pressuring congressman and senators in Washington, D.C., to use their influence over the Department of the Treasury to prevent any immediate cuts. A delay in proposed cuts, the activists believe, will allow time for a legislative solution to the broader issue of chronic financial problems in Teamster pension plans, and in the pension plans of a raft of other unions.

The grassroots pensioner campaign brought about 3,000 protestors to the lawn of the Capitol building April 14—most of them bused in from Midwestern states where the danger of cuts is most acute right now. Elected officials pledging their support at the raucous protest included Sen. Elizabeth Warren (D-Mass.), Sen. Debbie Stabenow (D-Mich.), Sen. Sherrod Brown (D-Ohio), Sen. Al Franken (D-Minn.), Rep. Marcy Kaptur (D-Ohio), Rep. Debbie Dingell (D-Mich.), Rep. Gwen Moore (D-Wisc.) and Rep. Emanuel Cleaver (D-Mo.).

“More than a quarter million [people] are facing the chopping block,” in the proposed Teamster pension cuts, Warren said in her speech to the crowd, blaming the Wall Street panic of 2008 for much of the problem. “Congress jumped in to help Wall Street,” in 2008, so “Congress must reject these cuts,” to help the victims of the panic now, she said.

While the crowd enthusiastically applauded Warren, Dingell and others, it saved its warmest response for Rita Lewis, the widow of a retired Teamster truck driver from Cincinnati. Lewis’ husband Butch was a popular union activist before his unexpected death from a heart attack Jan. 1, and Rita has taken up his cause, emerging as a symbol and powerful spokeswoman for Teamsters pension rights.

“Teamster pensions are in trouble because of greed, incompetence and corruption,” Lewis told In These Times. Excessive pay to plan administrators and outlandish fees to financial advisors have drained the fund, she says, echoing Warren’s emphasis on Wall Street malfeasance, and a first step should be to clean house at the offices of Central States Pension Fund, the organization that collects and distributes pension monies for some 400,000 union members and retirees. The current executive director, Thomas C. Nyhan, should be dismissed, and a new independent audit conducted to identify where money can be clawed back, especially from advisory firms like Goldman Sachs, she says.

“We’re not asking for a handout. We’re asking for nothing more, and nothing less, than what we have earned,” through years of work by union members like her husband, she says. “I’m going to have to sell my house,” if proposed cuts to her widow’s benefit go through, she says. “It’s not the American dream, it’s not the promise of America,” that widows are forced to sell their homes because of pension fund maladministration.

The cause of pensioner rights is gaining steam in Congress, Lewis adds, as more elected officials realize that the issues raised in the Central States Pension Fund case extend well beyond a limited number of retirees in a handful of Midwestern states. The current Teamster cuts are a test case, she says, for the Multiemployer Pension Reform Act of 2014, which gave pension administrator nationwide new legal powers to slash pensioner benefits. If the Central States cuts are approved, “it will open the floodgates” for cuts at dozens, or perhaps hundreds, of other union pension funds.

“Once the floodgates open, they will come after you,” she warns.

The floodgate analogy is apt, says Fred Zuckerman, president of Teamsters Local 89 on Louisville, Ky. The Central States fund is the largest in the Teamster organization, but there are scores of other smaller funds that face similar financial difficulties, he says. If the Treasury Department approves the Central States cuts, these other funds—and distressed funds at other unions -- will rush to impose cuts, Zuckerman predicts.

“Everybody is watching Central States to see if it’s approved. After this one is done, they’ll start falling like dominoes,” he told In These Times, in specific reference to smaller Teamster pension funds in New York and New Jersey.

Eyes are especially locked on May 7, when “special master” Kenneth R. Feinberg is expected to release his recommendation to the Treasury Department on how to proceed with the proposed Central States cuts. Feinberg has conducted numerous meetings with rank-and-file pensioners over the last six months, Zuckerman said, and many union members are impressed with Feinberg’s sense of fairness. The hope among many of his own members and retirees at Local 89 is that Feinberg will recommend that a more thorough financial analysis of alternatives be conducted before the Treasury Department makes any final decisions.

Zuckerman is also a candidate for election as president of International Brotherhood of Teamsters this fall, and believes that pensions will be an important campaign issue. Although retirees are not eligible to vote, concern about pension benefits down the road is an issue for hundreds of thousands of active member who can vote, he says. The administration of current President Jim Hoffa has failed to take effective action in protecting pensions, Zuckerman charges, and that issue is expected to loom large in the campaigning for numerous union offices. (Hoffa was also among the speakers at the April 14 protest, where he endorsed a legislative solution endorsed last year by Sen. Bernie Sanders (I-Vt.) and Rep. Captur.

Progress in building support among legislators was evident the day after the Washington protest, when 46 Democratic Party senators signed a letter to Treasury Secretary Jacob Lew urging him to conduct a new review of the Central States case, reports Bob Amsden, co-chair of the grassroots Wisconsin Committee to Protect Pensions. Public support from Republican legislators remains thin, Amsden says, but has been picking up steam in recent weeks. Private meetings with Republican legislators tend to produce qualified pledges of limited support, rather than the full-throated public statements akin to Warren’s, he said. (One exception was Rep. Virginia Foxx (R-N.C.) who reportedly brushed off retirees, telling then to ‘blame your own union.’)

The Teamsters pension activists are intensely focused on Feinberg’s May 7 deadline, and the Treasury Department’s immediate response. Amsden says. Any attempt to rush through pension cuts will have to be met with an intensified campaign aimed at Capitol Hill legislators.