Since the Multiemployer Pension Reform Act was signed into law by President Obama, more and more union retirees are fearing cuts to their union pensions will soon be coming.
Then, in December, the Iron Workers Local 17 Pension Fund in Cleveland filed its application to cut its pension payments as well.
Now, the latest, according to Pensions & Investments is a smaller Teamsters’ pension fund in New Jersey.
Teamsters Local 469 Pension Plan, Hazlet, N.J., applied to the Treasury Department to reduce benefits for participants, including retirees.
It becomes the third multiemployer plan to make use of the Multiemployer Pension Reform Act of 2014, which allows trustees of deeply underfunded pension funds that would be insolvent within 15 years of when the application is approved to reduce benefits, even for current retirees, after they have tried all other means. Those cuts can be no lower than 110% of the Pension Benefit Guaranty Corp.’s guarantee. Disabled or older retirees have further protections.
Teamsters Local 469 Pension Plan has 1,781 total participants, 128 of them active, assets of $122.6 million and liabilities of $279.9 million for a funding status of 43.8% as of Dec. 31, 2014, according to its Form 5500 filing.
As the law allowing current pensioneers’ pensions to be cut is fairly new, with many more distressed pension plans out there, it is far more likely that there will be more plans that will be taking advantage of the new law in the future.