Retirees' worst nightmare: Federal backing of pension funds at risk
The colorful history of the Teamsters union’s largest pension fund as a piggy bank for the mob was a driving element in the Oscar-nominated film “The Irishman.” But it will take a lot more than great acting and directing to solve the fund’s current problems.
It’s projected to run out of money in 2025. Already its annual benefits payments are $2.1 billion more than it’s taking in. And the Central States, Southeast and Southwest Areas Pension Plan is committed to paying $40 billion more in benefits to 364,000 members than its dwindling assets can support.
Not coincidentally, the federal backstop to protect such plans, the Pension Benefit Guaranty Corporation, is projected to go under the same year. Its multiemployer insurance fund covers 1,400 union plans with more than 10 million members and has a balance of about $2.5 billion. A growing number of insolvencies by small pension plans will shrink that to about $1.7 billion in 2024. The Teamsters plan will wipe out the rest.
“We’ll take the PBGC down for sure, there’s no doubt about it,” said Thomas Nyhan, executive director of the Central States pension plan.
When that happens, Central States pensioners, currently receiving an average benefit of about $1,400 a month, will get an immediate 20 percent cut since the PBGC’s insurance fund pays a maximum benefit of $1,072.50 a month. Those with 30 years in as a Teamster who receive a $3,000 monthly check can expect a 60 percent cut. Once the PBGC fund balance hits zero things get even worse, as its sole source of revenue will be the $380 million in premiums coming in annually.
https://www.rollcall.com/2020/02/28/retirees-worst-nightmare-federal-backing-of-pension-funds-at-risk/
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and all the Vulture Capitalists (I'm talking to you, Mitt Romney) have been attacking it by buying up companies, driving them bankrupt and faulting on their pension plans, putting more extreme pressure on the Federal fund.
