Central States Retirees Await Mediator’s Decision on Cuts

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On May 7th, retired members of the Central States Pension Fund will find out whether their previously ironclad pension benefits will be cut or preserved.

The cuts were proposed by the plan itself. A 2014 federal law allows multiemployer plans to propose pension cuts in order to stave off insolvency; the cuts must be approved by the Treasury Department via mediator Kenneth Feinburg.

More details from the Columbus Dispatch:

A federal mediator will decide by May 7 whether to accept a proposal from the Central States Pension Fund to slash benefits for thousands of retirees to keep the fund from going broke, according to Bloomberg.

Kenneth Feinberg, appointed by the Treasury Department to review the plan, has held town-hall style meeting with retirees in eight states to get their input into the plan, including one in Columbus in last December.

A law passed by Congress in 2014 gives struggling pension funds that serve multiple employers like Central States a way to cut benefits to help them survive. The pension fund provides benefits to retired Teamsters members, many of whom were truck drivers for several companies.

How Feinberg rules figures to be significant. Central States is the first fund to ask to cut benefits and other struggling multi-employer plans will be watching closely to see what Feinberg will do and whether they should take similar actions.

This case is interesting because it’s the first of its kind.

Feinburg previously mediated victim compensation during the BP oil spill disaster.

 

Photo by  Bob Jagendorf via FLickr CC License

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