The U.S. Treasury Department on Friday rejected the Central States Pension Fund’s proposal to cut member benefits by as much as 50 percent.
Renowned mediator Kenneth Feinberg made the decision.
Here’s why Fienberg rejected the plan, according to the Kansas City Star:
In a 10-page letter to the pension fund, Feinberg said it failed on three tests.
The proposal failed to reasonably show it would avoid the pension fund’s looming insolvency, it failed to distribute the benefits cuts equitably and notices to those covered by Central States were not written in a way that they would be understood by the average participant in the fund.
“We will not accept it. We cannot accept it,” Feinberg said during a conference call with reporters. “No benefit cuts are permitted pursuant to this law.”
Central States has about 400,000 members.
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