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Courts

New York Teamsters retirees sue U.S. for approving pension cuts under MPRA

A group of retirees participating in the New York State Teamsters Conference Pension and Retirement Fund, Syracuse, sued the federal government Tuesday for approving a benefit reduction plan under the Kline-Miller Multiemployer Pension Reform Act of 2014.

The retirees are proposing to represent a class of 22,000 retirees who started receiving reduced benefits Oct. 1 after the Treasury Department approved its MPRA application and less than 50% of participants voted against the action. In addition to the three named plaintiffs, more than 70 others have signed up to be added to the class action.

At the time of approval, it was the third multiemployer fund to receive approval for benefit reductions, and is the largest to date. As of Jan. 1, 2017, the plan was 37.8% funded, with $1.28 billion in assets and $3.39 billion in liabilities.

The lawsuit was filed in the U.S. Court of Federal Claims in Washington, which hears claims of regulatory takings by the federal government. It is asking that the federal government reimburse the retirees for 29% benefit cuts.

Retirees 80 and older who were spared cuts by MPRA and the roughly 18% of plan participants who are active workers and have not started receiving any benefits would not be covered in the lawsuit, which may also ask permission to allow other class participants, including ones with lower cuts and terminated vested employees, to opt into the class action.

"The Court of Federal Claims tends to be clear-eyed and thoughtful about whether a taking occurred. The government authorized a pension plan to withhold my clients' money and to give it to people other than them. That's a taking," said Noah Messing, plaintiff counsel from Messing & Spector, in an interview.

Further action in federal district court against additional defendants is also being considered.