Teamsters retirement fund heading toward bankrupcy, more than 35,000 impacted in Kentucky and Indiana
Now that the union fund has failed, the federal government is being asked to respond.
LOUISVILLE, Ky. (WDRB) -- More than 35,000 Teamsters in Kentucky and Indiana are at risk of losing their pensions and leaders are asking lawmakers for a bailout.
They called it a rescue plan, but to Angelyne Fleming, that's not quite how it turned out.
"Disgusting," Fleming said. "That was just a disgusting plan."
She's one of the 400,000 people facing a cut from the Central States Pension Fund. The retirement she paid into for 25 years as a subcontractor to Ford now wants to send her $1,400 less each month.
"It's inevitable," said Kenneth Feinberg, Treasury Department Special Master, on CNN Money. "The plan cannot survive."
The change would have started July 1. However, last week, Feinberg rejected Central States' so-called "rescue."
"Is there a better way to maintain the viability of the plan without cutting those benefits or being less draconian in cutting the benefits, [it's] very important," Feinberg said on CNN Money.
The decision does not stop the bleeding. Deregulation of the trucking industry, two recessions and an aging population created a perfect storm, leaving Central States' Pension Fund in critical failure.
"By 2026, it will be bankrupt if no changes are made," said John Stovall, President of Teamsters Local 789. "They're paying out more than $2 billion a year over what they're taking in, and you've got four retirees for every one person working."
The pension is primarily backed by the Teamsters Union. Contractors, truck drivers, factory workers -- the heart of middle America pays into this fund.
"Oh there's a big cloud, honey, because what I'm waiting on now is what will they conjure up next," said Fleming. "Will it be worse?"
In 2014, Congress passed a little known law which allowed these multi-employer pension funds to cut benefits to survive. Central States applied first, and even with the denied proposal from Treasury, experts say this fund may be too big to fail.
"There were 59 failures last year," said Mark Lamkin, CEO of Lamkin Wealth Management. "If it was a small plan, maybe $5 billion or $10 billion, it would be no issue. It's the Teamsters, 400,000. My bet there will be a bailout and the taxpayers end up footing the bill."
Fleming penned her fears in a letter to President Obama and prayed, saying after a decade of retirement, she may be forced back to work.
"I'm not complaining about the pension fund or what happened to it, I don't care," Fleming said. "The government can bail us out like they've bailed out everything else."
Congress denied a bailout package for Central States in 2013. Leaders of the pension fund met today deciding whether to submit a revised rescue plan or or go back to Congress asking for help.
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