The fight to save workers’ pensions

By: - August 5, 2019 6:00 am

Retired Teamster Bob Amsden meets with Sen. Tammy Baldwin (D-Wis.) to discuss the Rehabilitation for Multiemployer Pensions Act of 2019. (Courtesy of Bob Amsden}

Eight years into his retirement, Bob Amsden got a letter in October 2015 that threatened to upend his life.

The lifetime retirement pension was promised to him as part of his Teamsters Union contract during his 33-year career as an over-the-road truck driver. The letter said it would be cut by more than half — 55.6%.

Amsden was floored. Fellow retirees were getting similar letters. They came from the Central States Pension Fund — the multi-employer entity responsible for his pension and those of 400,000 Teamsters members across the Midwest and South, including 23,000 active and retired members in Wisconsin.

And that was just the tip of the iceberg. The Center for Retirement Research at Boston College, in a December 2017 report, warned that the nation’s 1,400 multi-employer pension plans together have $530 billion less than what they owe the workers they cover. One in four plans could face insolvency within the next two decades.

“Everybody said, ‘there’s nothing you can do,'” Amsden told the Wisconsin Examiner. 

He and other retirees facing similarly steep cuts have been organizing anyway.

An ‘egregious injustice’

“The majority of our guys are veterans,” Amsden said. “This is the most egregious injustice I’ve seen done to the elderly in our country.”

Amsden co-chairs the Wisconsin/Milwaukee Committee to Protect Pensions along with a fellow Teamster retiree, Bernie Anderson. The group is part of the National United Committee to Protect Pensions, formed in the aftermath of the threatened cuts from the Central States fund.

Last month, they got a little closer to their goal. The House of Representatives voted 264-169 to pass the Rehabilitation for Multiemployer Pensions Act of 2019, HR 397

The measure would create a Pension Rehabilitation Trust Fund and an office in the Treasury Department to make loans to struggling multiemployer defined-benefit pension plans. 

Backers say it would allow those plans to right themselves fiscally at little to no risk to taxpayers. The Congressional Budget Office has estimated that if enacted the bill would cost about $67 billion. 

Among Wisconsin’s delegation, all three Democrats and Republican Sean Duffy voted in favor; the rest of the Republican House members voted against it.

Now the measure is in the U.S. Senate, where Wisconsin Democrat Tammy Baldwin has signed on as a cosponsor. Republican Ron Johnson hasn’t indicated yet whether he would vote for it. 

The roots of the crisis

Multiemployer plans have been struggling since the 2000 stock market downturn from the dot-com bubble burst. The 2008 crash that triggered the Great Recession exacerbated losses. 

In addition, according to the Boston College report, because of declining union membership and because some employers have pulled out of multiemployer plans, the ratio of retirees collecting benefits to active workers for whom contributions are being made has shot up: Retirees represented 17% of all plan participants in 1975 and 61% in 2014. 

The report also concluded that while companies that withdraw from multiemployer plans must pay a penalty, the penalties “are insufficient to cover the costs they leave behind.”

Retired Teamster Kenneth Stribling meets with U.S. Rep. Gwen Moore (D-Milwaukee) to discuss the Rehabilitation for Multiemployer Pensions Act of 2019.

Amsden and his fellow Central States fund beneficiaries got a temporary reprieve when the Obama administration blocked the fund from making its proposed cuts. 

Pension funds are supposed to be protected by the federal Pension Benefit Guaranty Corporation, established to provide coverage if a pension fund fails. But with the problem of struggling multiemployer plans so widespread, the PBGC itself is under threat.

“If they go bankrupt or insolvent, they would bankrupt the pension guaranty corporation,” said Kenneth Stribling, another Milwaukee area retired Teamster and a vice president in the National United Committee to Protect Pensions.

The Boston College report says the PBGC has projected its multiemployer insurance program will run out of money within a decade.

Not a bailout

Stribling said congressional opponents of the rescue legislation “look at it as a bailout, and their first argument is, they don’t want the taxpayers to be on the hook for something that they think the funds did wrong.” 

That represents a misunderstanding of the problem as well as the proposed solution, according to Stribling and Amsden. The bill calls for 30-year loans to struggling pension funds to give them time to stabilize their fiscal condition while ensuring that retirees are paid the pensions owed to them.

Workers  facing steep cuts to their guaranteed pensions s contrast their own plight with the way financial firms were treated after the 2008 crash.

“You bailed out AIG, you bailed out General Motors, you bailed out Chrysler, you bailed out the banks and Wall Street,” said Stribling. “You gave the upper 10% a tax break. So why when the working person comes to you for help can’t you do something for them?”

Steil explains his no vote

A Wisconsin Republican congressman who voted against the bill to bolster multiemployer pensions threatened with insolvency showed up at a meeting of Teamsters union members Saturday to explain his vote — and got a word of appreciation from the meeting’s organizer.

Bob Amsden, co-chair of Wisconsin/Milwaukee Committee to Protect Pensions, said Sunday that Bryan Steil (R-Janesville) was the only Wisconsin Republican who voted against the bill to sit down and talk with union retirees and members to explain the reasons for his vote. 

“He was very professional and answered everybody’s questions to the best of his ability,” Amsden told the Wisconsin Examiner. About 220 union members, including retirees, active members and some spouses, attended the Saturday meeting. 

Amsden said he was concerned the meeting might turn hostile given Steil’s vote. “Those guys are scared to death of losing their pensions,” he said. 

But the meeting was cordial and respectful, according to Amsden. Steil told union members that he voted against the bill not because he disagreed with the concept, but out of concern that it would turn out to be a temporary solution. 

 “He committed and promised to do anything he can in working with the Wisconsin committee,” Amsden said.

Steil got points from union members for showing up, despite campaigning on rolling back Medicare benefits for people who are not close to retirement age, replacing Medicare with private savings accounts and as reining in what he has characterized as runaway spending on Social Security.

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Erik Gunn
Erik Gunn

Deputy Editor Erik Gunn reports and writes on work and the economy, health policy and related subjects, for the Wisconsin Examiner. He spent 24 years as a freelance writer for Milwaukee Magazine, Isthmus, The Progressive, BNA Inc., and other publications, winning awards for investigative reporting, feature writing, beat coverage, business writing, and commentary. An East Coast native, he previously covered labor for The Milwaukee Journal after reporting for newspapers in upstate New York and northern Illinois. He's a graduate of Beloit College (English Comp.) and the Columbia School of Journalism. Off hours he is the Examiner's resident Springsteen and Jackson Browne fanboy and model railroad nerd.