This is it: the last, best chance to save your pension payments, Teamsters and Central State Pension Fund leaders told a crowd of retirees June 23 at the Independence Event Center.
“You don’t need an economics degree to understand the problem,” said John Murphy, the International Brotherhood of Teamsters vice president and leader on pension reform efforts.
Many pension funds across the country don’t have enough money coming in to pay retirees what they promised. Central State Pension Fund, with more than 400,000 members, will be completely broke by the end of 2025. This is not a drill, a threat or a negotiating tactic, Murphy said, and there’s no way to cut benefits or invest creatively to fix the problem.
RELATED: Failing pension fund threatens thousands of retired truckers
The only solution is for Congress to step in and save the 3½ million workers who are at risk of losing their monthly retirement checks, he said. That’s where the Butch Lewis Act comes in.
The act would create a new Pension Rehabilitation Administration within the U.S. Department of Treasury that would give pension funds 30-year, low-interest government loans. The pension funds would then reinvest those loans in highly secure bonds. The pension rehabilitation agency would have oversight on the pension plans receiving loans and how they invested the funds, and the influx of money would guarantee that 100% of retirees receive their benefits, Murphy said.
A bipartisan special committee was created in February to explore solutions to the pension crisis and is to release a report after the midterm elections. If five representatives from each side of the aisle on the committee support specific legislation, it will be hustled through Congress.
The loans would do more than just temporarily fix the problem, Murphy said. The loans would cover the retirement benefits, the biggest expense, allowing pension funds to recover by fixing their underlying cash flow issues. But if action is not taken, and the more than 130 at-risk pension funds go belly up, it would be catastrophic for the entire economy, he said.
RELATED: Teamsters leaders facing probe for accepting gifts
“Essentially, what we’re saying is pay less now or pay a hell of a lot more once the plans are insolvent,” Murphy said.
“This is not a bailout. Don’t let anybody tell you it is,” he added. The federal government has committed in the past to protecting pensions, he said, so it is its obligation to do so now.
Murphy and other speakers called for the crowd to call and visit their representatives, and to encourage others to do so. The bill has a lot of Democrats behind it, Murphy said, but will need a lot more support from Republicans.
“Congress can’t ignore this problem,” Murphy said. “Because you’re not going to let them!”
Though the speakers fought to present an optimistic message, at times it seemed to fall on jaded ears.
The event center’s capacity is 5,800, and organizers had said they expected a full house. About 500 people showed up.
“I’ve heard it all before,” said Larry Kosfeld, 70, a retired truck driver who receives $3,000 monthly from Central States. He started the job after his Army service in Vietnam and took a Teamsters deal to retire and claim his pension after 30 years.
“I’m one of the lucky ones,” Kosfeld said, because he’s always planned for the worst. He’s been careful with his money and has done some investing of his own.
“This is going to have to happen, or a lot of people are going to be on welfare,” Kosfeld said. “I’m somewhat optimistic, but it’s going to take a lot of compassion from certain politicians to get it done.”