Western Pennsylvania Teamsters and Employers Pension Fund, Pittsburgh, was approved Tuesday by the Treasury Department to reduce benefits to remain solvent, under the Kline-Miller Multiemployer Pension Reform Act of 2014.
The approval was conditioned on having a participant vote. Unless a majority of eligible participants vote against the plan, it will go into effect.
The pension fund is seeking to reduce benefits by 30% across the board, except for older retirees protected by the MPRA.
As of Jan. 1, 2017, the pension fund had $718 million in assets and $2.2 billion in liabilities, for a 33% funding ratio, according to its most recent Form 5500; it is projected to be insolvent by 2029.
According to its Sept. 28 MPRA application, United Parcel Service Inc. employees make up 29% of the pension fund's active population and UPS represents 58% of total employer contributions to the plan.
Along with investment losses after 2000 and 2008 that forced pension fund officials to draw down assets, retirees now outnumber active workers by 3 to 1, and several employers have withdrawn because of the plan's critical and declining status, in some cases with their employees' approval.
Financial troubles experienced by the pension fund's second-largest employer, YRC Worldwide Inc., in 2009 stopped or reduced that company's contributions for several years, and another large contributor, Giant Eagle Inc., withdrew from the plan in 2016, in part because of repeated contribution increases, the trustees said in the application.
To date, the Treasury Department has denied five MPRA applications for benefit suspensions and approved 13, not counting Western Pennsylvania Teamsters and Employers Pension Fund. There is one application under review, according to the Treasury website.