But even as Democratic Sen. Sherrod Brown and Republican Sen. Rob Portman hailed Feinberg’s decision, lawmakers and union members will have to devise a long-term solution to prop up the plan – known as the Central States Pension Fund — which could be out of money within a decade.
Thomas Nyhan, executive director of Central States, said the trustees are “disappointed” with the administration’s decision “as we believe the rescue plan provided the only realistic solution to avoiding insolvency.”
Saying that Central States “remains in critical and declining status,” Nyhan said “absent legislative action or an approved rescue plan, Central States participants could see their pension benefits reduced to virtually nothing.”
Central States, a multi-employer fund that serves mostly trucking companies represented by the Teamsters and covers more than 400,000 people, has liabilities of $35 billion but only $17.8 billion in assets.
To keep the plan alive, trustees proposed an average pension cut of 22 percent, although some retirees faced reductions of as high as 70 percent. But their proposal – which needed to be approved by the Treasury Department — provoked outrage on Capitol Hill and among the Teamsters, including a rally last month by scores of retirees on Capitol Hill.
“While we celebrate today’s decision, we must also look toward a comprehensive solution that will save Central States and keep the promises made to our retirees,” Brown said.
Portman said while the “decision is a victory” for retirees, he acknowledged that the decision should “give all parties the opportunity to re-engage on a more thoughtful plan to address the Central States pension crisis.”
James Hoffa, general president of the Teamsters, said “there won’t be any cuts to retirees’ pensions this July or the foreseeable future. We will find a solution to this problem that will allow members and retirees to continue to retire with dignity.”
Bu in a pointed dig at Congress and the Teamsters, Nyhan said because lawmakers “have been vocal in calling for” the administration to reject their plan, Congress needs “to pass legislation that protects the pension benefits … something Congress and the White House did not do when we previously proposed a remedy in 2009 and 2010.”
Brown has co-sponsored a bill introduced last year by Democratic presidential candidate Bernie Sanders that would prop up the plan by closing loopholes on the estate tax and ending a tax break on the sale of art. The bill has little chance of winning congressional approval.
Portman has introduced a bill, which is co-sponsored by Brown, to require that any pension reduction be approved by the workers and retirees.
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