Over the last several years, we have updated you on the financial condition of the NYS Teamsters Pension Fund and the measures we have taken to restore the Fund’s financial health. Unfortunately, despite our taking every step possible, the Fund has not been able to recover from the historic market losses in 2000 and 2008, a declining active union population, and an exodus of contributing employers. Our Fund remains severely underfunded and cannot be saved unless we take additional and immediate action.
This problem is not unique to our Fund. Many pension funds like ours are in the same boat. Some are in much worse financial condition. For a number of those funds, it is too late to avoid disaster, and they can no longer be saved. As a result, participants in the Central States Pension Fund and other funds like it are facing the real possibility of having no pension benefits at all.
We are determined not to allow our Fund to deteriorate to a point where the Fund cannot be saved. After considering every possible option, we have concluded that the only way to save the Fund is to apply for benefit reductions under the Multiemployer Pension Reform Act of 2014 (MPRA). In accordance with MPRA, we submitted an application for benefit reductions to the U.S. Department of the Treasury on August 31, 2016.
Our proposed plan is called the Pension Preservation Plan (PPP). The PPP takes the action necessary to save the Fund and ensure that it remains solvent so it can pay pension benefits indefinitely. The PPP needs to be implemented now. And, we will support any legislation in Congress that could potentially address the Fund’s solvency problems. If there is a legislative fix in the future, we will withdraw our application. But, if we wait to take action, we will be forced to make even larger cuts later, and run the risk that the Fund will end up paying no pensions at all. This is a difficult decision that we do not take lightly, and we recognize the hardship these proposed benefit reductions will create.
This is one of a number of communications you will receive regarding the PPP and its proposed benefit reductions over the next few months. We have posted a summary of the PPP, which provides a description of the application process, the potential timeline, and how you will be able to participate in the application process going forward.