Retired members of the Teamsters union in New York will have their benefits cut by around 30 percent starting in October after the 34,000 participants in the pension approved a plan aimed at extending the life of the cash-strapped fund.
Monthly pensions for retired teamsters from nine New York local unions who have 30 years' service will be cut on average to $3,550 from $5,000, according to plan trustees. Members who are working would also have benefits cut.
The vote by participants in the New York State Teamsters Conference Pension and Retirement Fund sparked an outcry on social media, in part because defeating the proposal required a majority "no" vote by eligible voters. Votes against the cuts topped votes for the cuts 9,788 to 4,081, but 20,767 eligible participants did not vote, so the cuts were approved, according to the U.S. Treasury.
"Wow, let down from the company I worked for, the union I trusted and the 20,750 brothers that didn't want to bother," wrote Daniel Keenan on the Facebook page for the Teamsters Alliance for Pension Protection.
The group was formed by Mark Greene, a driver for United Parcel Service Inc, to fight the cuts. Greene did not respond to a request for comment.
The Teamsters fund is just the third so-called multiemployer pension plan to resort to slashing benefits to prevent running out of money.
More are expected to follow. At least 100 multiemployer plans with 1.3 million participants are in danger of going broke in 20 years, according to actuarial consulting firm Cheiron Inc. The plans have been undermined by employers switching to non-union labor or liquidating in bankruptcy and retirees living longer.
Nearly 200 employers contribute to the Teamsters fund, including UPS and trucking companies ABF Freight Systems Inc and YRC Worldwide Inc. The fund benefits drivers and warehouse workers, among others.
UPS has said it is troubled by the state of the pension and is seeking solutions to the retirement crisis of its employees.
Multiemployer plans were given the opportunity to cut pensions for retirees under the Multiemployer Pension Reform Act of 2014, which was enacted in part to prevent the insolvency of the government's pension insurer, the Pension Benefit Guaranty Corp.
Benefit cuts were also approved this year by participants in two smaller multiemployer pension plans that provide benefits for iron workers in Cleveland and furniture makers in Nashville.
(Reporting by Tom Hals in Wilmington, Del.; Editing by Matthew Lewis)