Trustees of the $17.8 billion Teamsters Central States, Southeast & Southwest Areas Pension Fund, Rosemont, Ill., announced Thursday that they will not resubmit a benefit reduction application to the Treasury Department, which on May 6 rejected their original application.
The pension fund applied Sept. 25 for permission to reduce benefits in order to avoid insolvency that it projected would happen by 2026. At the time of its application, it was 53% funded, with $35 billion in liabilities.
In a statement, Central States Executive Director Thomas Nyhan said that after trustees met with the pension fund's actuaries and legal advisers, “it was concluded that due to the passage of time, Central States can no longer develop and implement a new plan that complies with the final MPRA regulations issued by Treasury on April 26, 2016. Therefore, there will be no new rescue plan.” The Kline-Miller Multiemployer Pension Reform Act of 2014 created the benefit suspension process.
Mr. Nyhan said that while trustees strongly disagreed with the reasons given for the rejection, “there is little point in dissecting a decision that has already been made and cannot be changed.”
Mr. Nyhan said pension fund officials will now work toward legislative solutions to protect participants. With the Pension Benefit Guaranty Corp. multiemployer insurance program also headed toward insolvency, he said, “at this time, only government funding, either directly to our pension fund or through the PBGC, will prevent Central States participants from losing their benefits entirely.”