September 12, 2016
Equitable doesn’t mean Equal
The Trustees acknowledged that active participants who were subject to PPA (Pension Protection Act) cuts from 2011 to present have experienced approximately 11% in cuts so far. Therefore simply tacking on another 20% will match retiree cuts of 31%. This is a gross over-simplification of the entire MPRA law.
THE LAW SAYS EQUITABLE, NOT EQUAL
MPRA is very complex legislation. Numerous considerations are granted to trustees to consider when making cuts. Some examples would be:
- Past contribution levels, How high and how low.
- Danger of employers/employees losing support for the Plan if cuts are too steep and not sustainable. (UPS employees are no longer interested in participating in the NY Teamsters Pension Fund)
- Orphan or distressed employer status.
When submitting the application to treasury, Trustees will need to explain why they haven’t followed the guidelines and factors contained in § 432(e)(9)(D)(vi)(I) through (XI).
- Based on the flawed approach in which the trustees applied for cuts, some UPS workers will be seeing reductions of 42% or higher. UPS employees which have had $400,000 plus contributed on their behalf with 30 plus years of service, should not be seeing these levels of cuts.
- A current Full-time UPS employee with 10 years of service and 20 remaining years will receive approximately a $3200.00 a month pension. Adjusted for inflation, this is about $800.00 per month in today’s dollars.
- Over $1,000,000 will be contributed on this workers behalf over his/her career including all new future full-time employees. It is unclear how UPS as a corporation will be able to afford or tolerate this program of contributions.
It can be suggested, that the The Trustees are encouraging UPS to withdraw from the pension fund in the next collective bargaining agreement (2018) since workers and the corporation can longer absorb the unfunded burden of the entire Fund.
Why is NYSTPF nearing insolvency?
There are several reasons.
- Primarily the 2008 stock market meltdown and subsequent “great recession.” Our Fund lost nearly 36% of its asset base in 2008. This loss requires a 60% gain in following years to just break even. This has been challenging with volatile markets in the following years. It is easier for a 401k or retirement account to recover. But pension plans are much more difficult since there is a continual draw-down of benefits. Our Fund sees an approximate 200 million operating deficit per year.
- Orphaned and distressed employers which are no longer contributing to the Fund. A recent update of NYSTPF showed 139 orphaned companies. YRC freight represents the Funds largest distressed employer. Contributions received from this company is only 1/5 of what it should be. A YRC retiree’s pension check is second highest to a UPS retiree. This corporation must pay its obligations to its workers and the NY Fund. Pension Funds cannot afford to offer discounted pension payments as a means to bail out corporations!
- Trustees adoption of Alternative Investment strategy since 2005 which has under-performed global and US equity markets due to illiquid nature of investments.
Albany and Hudson Valley Teamsters meet to discuss MPRA 2014 Pension legislation. As pension cuts are looming, Teamsters raise money to challenge legislation and propose new solutions to solve the crisis.
Rally held June 6th, Albany – NY
Retirees in New York Sate march at Leo O'Brian federal building in Albany to fight MPRA 2014 legislation.
Pension Cuts for New Yorkers – see video
Car Haulers Local 449 Buffalo covered under CSPF
Teamsters applaud Bernie Sanders s. 1631 Bill -Albany, NY
April 9th, 2016
Verizon (formally known as NY Tel, Bell Tel and others) is pursuing legal against fiduciary conflict rule and practices of their pension fund’s investments. Will this come into play with the New York Teamsters Plan?
These Verizon retirees have scored a key ally in their Supreme Court case.
Pension Rights Center files Amicus Brief.
Keller Rohrback files Amicus Brief.