Type to search

Union Retirees Fear Dramatic Pension Cuts Under New Federal Law

Economy Tribune News Service

Union Retirees Fear Dramatic Pension Cuts Under New Federal Law

Share

By Jim Mackinnon, Akron Beacon Journal (TNS)

AKRON, Ohio — Bill Hendershot and his wife live on his union pension and Social Security. Hendershot, a retired long-distance truck driver, gets around now in a 12-year-old Toyota Corolla. The couple still pay a mortgage on their home.

And he’s among a huge group of union retirees nationwide who could see their monthly private pension payments cut as much as 60 percent under a national reform measure signed into law in December by President Barack Obama.

“I could lose two-thirds of my pension,” Hendershot said. “You ask, how could I live? You talk about drastic reductions. … We don’t live big now.”

The new law, the Multiemployer Pension Reform Act of 2014, was a bipartisan effort backed by some unions. It is intended to save severely underfunded, private-sector, multiemployer pensions in which different companies pay money into one pension fund.

For numerous reasons, including bankrupt employers and increasing numbers of retirees, multiemployer funds make up a large percentage of the nation’s least financially stable pensions. The act also is aimed at reducing the strain on the Pension Benefit Guaranty Corp., or PBGC, the privately funded federal backstop for pension funds.

But under the new law, keeping the financially troubled multiemployer funds solvent so they at least continue to pay out some money could mean dramatically lower benefit checks for a million or more retirees across the nation, experts say.

That has Hendershot, who retired in 2002 when his former employer went out of business, and others worried about their own well-being. Hendershot’s Teamsters pension plan is among the most sickly.

He and others suspect a lot of people don’t know about the new law and will be blindsided if their pensions are cut.

Under the law, retirees ages 80 and older would not get their benefits cut. Retirees 75 and older could get smaller cuts. Retirees younger than 75 could get their pensions reduced by the maximum amount, subject to a vote by active and retired workers. Cuts also need plan trustee approval.

“It’s a struggle to get by as it is,” said Joe Mardula, 62, another former trucker. He said someone like him who gets a $3,000-a-month pension could see it cut to as low as $1,200.

“My (ex-wife) and I would have to split that, too,” Mardula said. “How are you going to live on that between two people?”

Karen Friedman, executive vice president and policy director at the nonprofit Pension Rights Center in Washington, is highly critical of the new law while acknowledging that pension reforms are needed.

“We are not saying don’t fix multiemployer (plans),” Friedman said.

But an act that allows plans to cut retiree pensions is “such a departure from current law,” she said. “It’s just such a buzz saw on retiree pensions.” As many as 150 pension plans nationally may be impacted by the new act, Friedman said. The U.S. Department of Labor keeps a list of “critical status” multiemployer pension plans.

The Pension Rights Center created a Multiemployer Retiree Cutback Calculator for its website, www.pensionrights.org, that allows people to get an idea of how much their pension could be cut under the law.

As many as “1.5 million people are affected by the new law, and a small percent know it has been passed,” Friedman said.

The Pension Rights Center is committed to appealing the cutback provisions of the bill, she said.

“We’re committed to organizing retirees around the country,” she said.

She noted that union workers gave up wages so companies would put money into pension plans.

“There is a question about whether there is a social contract anymore,” Friedman said. “You are cutting something that was inviolable. Can anyone trust anything? … The highest principle is to keep promises to people.”

Mike Walden, a retired union worker, heads the Northeast Ohio Committee to Protect Pensions. The group, made up of retired Teamsters in the Akron area, organized to oppose the passage of the Multiemployer Pension Reform Act as it worked its way through Congress.

“We’d been fighting this for a year,” he said.

Now members are working to get at least part of the act repealed, Walden said. He has been traveling around the nation to speak to Teamster retirees about the act.

When he speaks to groups, Walden said he tells them, “It’s about your pension, your lifestyle, your future.”

Walden said one goal is to have a rally in Washington later this year.

The ultimate aim is to either have the act repealed followed by new hearings to draft revised legislation, or to get part of the act repealed that cuts retiree pensions, Walden said. There are other solutions out there that can shore up failing pension plans before taking away retiree money, he said.

“All of this is falling on the shoulders of retirees,” he said. “We just want a fair shake.”

Walden said it could take a year to figure out the complexities of the legislation and longer than that before plans try to cut retiree benefits. He expects there will be significant challenges to the law.

Thomas Morneweck, executive secretary-treasurer of the Tri-County Labor Council in Akron, noted that the law affects more than Teamsters. Machinists, electricians and others face possible cuts in their multiemployer plans as do the Teamsters, he said.

“Allowing cuts to pensions would be unprecedented,” he said.

“We get the big picture” on the financial state of pensions, Morneweck said. “The cut is what’s devastating to people living on a fixed income. … You don’t want to start down that road. It’s a slippery slope. The cuts keep coming. There’s no stopping them.”

Bill Foshee, 73, says he’s tried to keep busy in the 15 years since he retired. The Teamster retiree volunteers and also works part time while drawing a union pension.

“The whole concept is, we worked hard for this,” he said of the pension.

Foshee said he is among the union retirees keeping a close eye on multiemployer pension reform.

“We really want people around here to know we’re watching it,” he said. “I’m at a point now where everything has leveled off and I want to keep it that way, my bills and stuff. … If they don’t cut us too much, I’ll be all right.”

Tony Popio, 81, a retired Teamster, said he disagreed with the new law.

“We’re pawns to make money for somebody else,” he said.

Photo: Retiree Tony Popio, 81, shares his thoughts on the recent change in legislation that could result in pension cuts during a Retired Teamsters Fellowship Club meeting on Wednesday, Feb. 4, 2015, in Akron, Ohio. (Mike Cardew/Akron Beacon Journal/TNS)

Tags:

30 Comments

  1. Dominick Vila February 21, 2015

    Former union members retirees are not the only ones that should fear reductions in pensions, and 401k corporate contributions, all retirees are facing the same threat. The trend to reduce and, if possible, eliminate private sector pensions began in the 1980s and has continued ever since. To make matters worse, efforts are also underway to reduce Social Security benefits, and privatize SS while supporting the end of private sector pensions! At this rate the next step is likely to be a debate on euthanasia. I wonder if such proposal would enjoy bipartisan support, and what the cutoff age would be? Obviously, euthanasia would not apply to those whose financial status makes government assistance unnecessary, but the appeal of such policy for those whose priority is to buy the latest cell phone should not be discounted. Let’s face it, a cyanide pill is a heck of a lot cheaper than paying a pension for 10 or 20 years. In an age when some among us are impressed by ISIL’s atrocities anything is possible.

    Reply
    1. mike February 21, 2015

      Thanks, I needed a good laugh.

    2. Wrily February 21, 2015

      You’re right, it began in the 1980s with Reagan, and has continued nonstop since.

      I can hear advertisements for those cyanide pills, “Take one for The Gipper.”

      1. Daniel Max Ketter February 21, 2015

        Ole jellybean reegan was a national joke.

    3. Whatmeworry February 21, 2015

      The euthanasia started in 2010 with Barak’s death panels

      1. Daniel Max Ketter February 21, 2015

        As long as abortion stays legal, I’ll be happy. A woman with a fetus does have a right to choose, not churches or holy rollers.

        1. ralphkr February 22, 2015

          Unfortunately, Daniel, more and more hospitals are being taken over by sects that will not allow abortion such as Catholics who have the attitude that if the doctor has to choose between fetus or the mother he must save the baby and allow the mother to die. Many decades ago a priest explained “God’s” reasoning to me for this attitude, i.e., the mother has been baptized and has a chance for heaven while the baby has not been baptized and is doomed for all eternity.

          1. Daniel Max Ketter February 22, 2015

            Just a bunch of holy roller bs.

      2. ralphkr February 22, 2015

        Actually,Whatmeworry, the death panels were in existence long before Obama was elected. The ACA did kill off the insurance company death panels such as the one I interacted with in 1998.

        1. Whatmeworry February 22, 2015

          This now State run panels

          1. ralphkr February 22, 2015

            Sadly, Whatmeworry, that is all too true in the Republican states that turned down ACA & expanded medicaid and are busy killing off those who cannot afford health care.

          2. Whatmeworry February 22, 2015

            ACA will never be out done when it comes to pronouncing the death sentence. Hell even the VA managed to kill over 800 last year

          3. ralphkr February 22, 2015

            Well, Whatmeworry, it is always interesting to hear from the fictional universe in which you and the rest of the super conservatives reside. Have ever tried reading something other than DC comics?

          4. Whatmeworry February 22, 2015

            The only paper here is the Washington Post and its only used locally to wrap the cat fish or chicken in

          5. Daniel Max Ketter February 22, 2015

            Ha, my wife used to get that boyie magazine. Don’t know why when she had a stud like me at the homestead.

          6. Whatmeworry February 22, 2015

            Playgirl, but I just read the articles

          7. Daniel Max Ketter February 22, 2015

            Huh?? What’s the American Camp Association have to do with the va? I thought they were government or somethung?

          8. Whatmeworry February 22, 2015

            ACA will always be out done when it comes to pronouncing the death sentence. Hell even the VA managed to not kill over 8000000 last year

  2. Whatmeworry February 21, 2015

    There are other ways to fix it?? Do these union thugs think China is going to donate$$$…The piggy bank is BROKE the very union members who drove these companies out of business think there is another pot of gold laying around some where

    Reply
    1. Daniel Max Ketter February 21, 2015

      Union thugs?? Well I spend over 15 years as a steward, fighting for benefits for workers from greedy management at Ford, so the consumers can drive safe and dependable cars. I only had to quit early to get my disability and food stamps to retire. Sorry you couldn’t join a union while flipping burgers under the golden arches. GOD BLESS ALL OF OUR TRADE UNIONS and their families!

    2. Lance Koontz February 22, 2015

      You have to lay off the kool aid,,,,,,,,,,,,,,,,,,,,,

      1. Whatmeworry February 22, 2015

        I’m drunk from bourbon when I post, I get more creative

        1. Lance Koontz February 22, 2015

          Well anyway you’re right about one thing.

          Public sector unions are pretty worthless.

          especially the ones that represent rank and file police officers and federal employee unions.

          1. Whatmeworry February 22, 2015

            No, I support those unions. They are not all bad

        2. Lance Koontz February 23, 2015

          You sound like you have too much time on your hands.

          Are you collecting a retirement pension or are you collecting disability payments ?

          Do you have a place of employment?

          It’s a little late to be trolling forum sites

          and causing trouble.

          An alcoholic in denial………………..

          YIKES……..

          ( just a little off topic. )

          BTW.

          “Drinking the Kool-Aid” is a figure of speech
          commonly used in the United States that refers to a person or group
          holding an unquestioned belief, argument, or philosophy without critical
          examination. It could also refer to knowingly going along with a doomed
          or dangerous idea because of peer pressure.

          1. Whatmeworry February 23, 2015

            No pension. I only worked for 10 years, then quit so I could legally collect disability and feed off the public trough

          2. Lance Koontz February 23, 2015

            Surely you jest …….

      2. Whatmeworry February 22, 2015

        Just a realist

        1. Daniel Max Ketter February 22, 2015

          I agree you sound like a moron. Get off the whiskey and sober up.

      3. Whatmeworry February 22, 2015

        Just a idiot

Leave a Comment

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.