Before the holidays, scores of retired Teamsters gathered in Washington DC to urge lawmakers to oppose a bill that threatened their retirement security.
They returned home victorious after convincing lawmakers to omit from inclusion in a must-past budget bill the Multiemployer Reform Act of 2016.
This bill, also called the Composite bill, would have allowed pension plans whose members work or worked for multiple employers to create Composite pension plans that shift investment risks onto the backs of individual workers and retirees.
“We stopped another ambush of our retirement security,” said Greg Smith, a Teamster retiree from Akron, Ohio to Teamsters for a Democratic Union, an organization of rank-and-file Teamster members building union power on the job. “(We) did a lot of hard work to make sure the Composite (bill) wouldn’t see the light of day.”
Smith, a member of National United Committees to Protect Pensions, an organization of local committees of Teamster retirees, also said that retirees who didn’t go to Washington DC made phone calls and sent e-mails.
“It’s the grassroots effort we’ve organized that’s making a big difference.” continued Smith.
Multiemployer pension plans are common in industries such as transportation, construction, and hospitality.
Until recently, these pension plans provided a modest yet secure retirement for millions of hard working people.
But some of these plans have hit on hard times. Pension plans for Teamsters have been especially hard hit. First they suffered large financial losses when Wall Street speculation caused the Great Recession and a subsequent market downturn.
As the markets recovered, the pension plans were hit by the long-term effects of political policies enacted nearly 40 years ago. One of those policies was the deregulation of the trucking industry that allowed hundreds of new non-union trucking companies to begin operating.
These non-union trucking companies didn’t contribute to the multiemployer pension funds that protected Teamsters’ retirement, and their race to the bottom wages and benefits put pressure on union trucking companies to lower labor costs, which in many cases led to insufficient pension contributions from employers.
Forty years ago, the US government also began chipping away at laws that protected workers’ rights to join a union. As a result, union organizing became more difficult, and fewer workers were able to join unions, which weakened their ability to protect pension plans like those that protect retired Teamsters.
The result is that some multiemployer pensions like those of the Teamsters are under funded.
Congress has been trying to deal with the under funding problem, but the solutions that it has considered start from two questionable assumptions: first, the interests of business always take priority over the interests of workers and second, retirees and workers must shoulder more of the risks and burdens of saving their pensions.
Two years ago, Congress enacted its first law dealing with the under funding problem. It also was named the Multiemployer Pension Reform Act. It allowed under funded multiemployer pension plans to reduce benefits.
Last year, the Teamsters’ Central States Pension Fund used this law to propose pension cuts, but a grassroots effort by retired Teamsters stopped the proposed cuts.
The Multiemployer Pension Reform Act of 2016 was Congress next effort to deal with the under funding problem. The Composite pensions that it would have authorized are a hybrid cross between traditional pensions and 401(k)-type retirement savings accounts.
Composites are a boon to employers because they make it possible for employers to lower their pension contributions, but they put workers’ retirement security at risk.
Composite plans allow workers to retire with a lifetime annuity, but the amount of that annuity depends on the health of financial markets. If markets take a big hit like they did in 2008 and 2009, the amount of annuity is subject to reduction.
There is another way to deal with the under funding problem. The Keep Our Pension Promises Act (KOPP), sponsored by Sen. Bernie Sanders and Rep. Marcy Kaptur, would allow the Pension Benefit Guaranty Corporation (PBGC) to help troubled multiemployer pension plans by paying a small portion of the plans’ benefits in order to prevent benefit cuts.
Financial assistance under KOPP would be paid for by closing two tax loopholes that benefit the very wealthy.
Unlike other proposals, KOPP puts the interest of workers and retirees first, but given the leadership of the new Congress, it is more likely that when Congress turns its attention to dealing with the under funding problem, it will pursue proposals like the Composite bill.
Members of the National United Committee to Protect Pensions are gearing up to fight any new Composite bill that may surface in Congress and to fight other threats to their pension.
“We’re going to continue what we’re doing. We’re going to step up the effort a little bit,” said Mike Walden, chairman of National United Committee to Protect Pension to Channel 26 News in Green Bay, Wisconsin. “We have to get a little more professional, which is why the national committee was formed. And, we have some power on both ends now. But, the majority of our power is still power in numbers.”