President's Corner

 

January 2019 Members Step Up to Protect Pensions

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President’s Corner

One of the most important responsibilities I hold as President-Business Manager is serving as a trustee on our $4 billion pension fund, which members and our families rely upon for a comfortable life after we’ve finished working. We have worked hard to return the fund to stability while attempting to foresee pitfalls and respond to political and economic crises, especially since the financial crisis of 2008 ignited the Great Recession. Today, we are finally back in the “green zone” and are awaiting the end of our fiscal year on March 31, when the status of the fund is certified for the year.

I am tremendously proud of the work that we have done to stabilize the fund over the past decade. Trustees made difficult but responsible decisions and members were educated on the inner workings of our pension plan, and agreed to make the sacrifices that have gotten us back to the “green zone.”

We’ve gotten healthy once again due to the work that we have all done together, without assistance from the federal government. If you’ve come to a General Membership Meeting in the past 10 years, you’ve heard me lament the government’s thoughtless approach to pension stability, requiring us to liquidate our reserves in 1999 only to mandate a reserve once again in 2006. The government’s intervention in our pension fund has never been a benefit to us, and frankly, set the table for disaster through its short-sighted mandates.

Well, they’re back. Today, massive funds like the Teamsters’ Central States Fund are approaching almost certain insolvency, threatening the pensions of their participants. This has given Congress the cover it needs to put its hands into the regulations that govern all multiemployer pension plans, regardless of size or health.

Over the Thanksgiving holiday, word leaked out that the Joint Select Committee on Solvency of Multiemployer Pension Plans was preparing policy recommendations to assist participants of failing funds while preventing similar failures in the future. While these would generally sound like noble goals, Congress was considering ways to pursue those goals that would be nothing short of a fatal blow to union retirement funds.

To accomplish the first goal, assisting failing funds, Congress would double the premium that our fund currently pays to the Pension Benefit Guaranty Corporation (PBGC), which pays benefits to retirees whose funds have gone under. This would cost our fund an additional $2.8 million per year, and would be coupled with a new $280,000 tax on the union. Even more bold was the effort to reduce current pension recipients’ checks by two percent, and direct all this money to increase the monthly payments to the failed funds’ retirees.

While I sympathize with workers whose pension funds go insolvent, we can hardly be held responsible for bailing them out. We’ve done the tough work of keeping our fund stable when others haven’t, and penalizing us to reward others is simply a senseless idea.

As if these gems weren’t enough, the second part of the plan – preventing future insolvencies – gets even more crazy. The committee was poised to suggest setting a government cap on the investment returns we can assume, an assumption that falls far below what we actually bring in on an annualized basis. This single move would put our fund from 80 percent funded – in the “green zone” – down into the “red zone” at 57 percent funded, and it would require us to forfeit the credit balance we’ve built over the past ten years. That’s right, the government forced us to liquidate our reserves in 1999, then ordered us to build a reserve in 2006, and is toying with the idea of eliminating reserves in 2019. Furthermore, this foolish idea would put almost every “green” plan in America into either the “yellow” or “red zone.” So in order to prevent insolvency, the committee would push every single pension plan closer to insolvency.  It is this kind of “thinking” that should make us all hesitant to let the government anywhere near our pensions.

It will come as no surprise that many of these ideas originated at the Heritage Foundation, an anti-union think-tank and lobbying organization that is extremely influential in Washington D.C.’s conservative circles and has been responsible for providing President Trump with shortlists of judicial candidates like Justices Gorsuch and Kavanaugh. The Heritage Foundation’s other ideas included banning collective bargaining over pensions for all private-sector unions in America.

I’m sure at this point you can imagine my reaction to reading these leaks over a holiday weekend, with only a week before the committee was scheduled to release formal recommendations. After speaking with the International about its lobbying strategy, I ordered that members be immediately notified and mobilized to fight this policy. We sent out postcards to all members and sent emails to every member who has provided one through My150.com, asking everyone to reach out to our Senators and Representatives and ask them to oppose any plan that would tax and penalize healthy plans to provide benefits to unhealthy ones.

The response was impressive, and what I must say was most impressive was the level of understanding that members had when they called the union to ask questions. I would not hesitate to say that Local 150 members in the field know more about the inner workings of a pension fund than most of our representatives in Congress, and while that is scary, I am also proud of this union for having such informed and active members.

Active and retired members sent more than 11,000 emails to our elected officials in 42 states on only a day or two notice, and this outreach resulted in direct responses to the union from several of our Senators and Representatives. This raised an alarm with our Congressmen and women, and coupled with the lobbying efforts of our International and that of the IBEW, a brick was placed on this committee’s work, the most deplorable ideas were shelved, and its recommendations were not released by its November 30 deadline.

While this was a very positive result, I am not certain that this issue will not reappear in the coming months, despite the upcoming changes in Congress. We will continue to monitor this committee to ensure that our pension fund is safe from interference and we will notify the membership if immediate action becomes necessary once again.

Thanks go out to all the members who answered the call last month and got active right away. Our collective voices made a big difference in this fight, and it serves as a reminder of how strong we are when we work together. On the other hand, this was a stunning reminder that despite the hard work and sacrifice we’ve undertaken over the past decade, the government still has far too much ability to interfere with our pensions.

I want to close this article by congratulating Vice President Kevin Burke on his retirement on November 30, and to thank him for his service to the members of this union, as well as for his friendship for many years. Kevin was on staff for more than 27 years, and in that time served as an organizer, business agent, my assistant, and finally as Vice President. In these years, his efforts made a difference in the lives of thousands of members. Kevin and his family have contributed so much to Local 150, and I want to wish him all the best in a well-deserved retirement!

United We Stand, Divided We Fall.