We have beaten the drum for years, here at the blog.
Pension security is nothing more than a math equation. Whether you’re talking about private pension plans, multiple employer pensions, or the grandadday of them, Social Security, you cannot continue to pay existing benefits without bankrupting the fund. It’s simple math.
It’s emotional, too. Especially if you’re passed your optimim working age, and have made your financial plan using the rules at hand. It’s not like you can just jump back into the workforce. This is a situation that we Baby Boomers are going to have to face, and overcome if our retirement years are anything like we desire.
And now, one of the nation’s largest private pensions is crying uncle. Uncle Sam, that is. they have applied to the US Treasury for a waiver of the rules, allowing them to reduce their pension payments. Significant reductions:
“This is going to be a national crisis for hundreds of thousands, and eventually millions, of retirees and their families,” said Karen Friedman, executive vice president of the Pension Rights Center.
It’s the math. You can argue with me all you want, but it doesn’t change the math. Time to get busy, folks. Nobody is going to do it for you.
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Filed under: business and economy | Tagged: Central States Pension Fund, PBGC, pension solvency |
no2liberals
el nuko
Robert D
Nuke's 
I’m personally familiar with Central States–my dad was a Teamster and that was the only thing allowing him to have a pension (his trucking company went out of business while he was working for them).
What’s hurting them the most is that the vast majority of traditional freight companies (by traditional I’m excluding UPS and FedEx) once were Teamster unionized but now the majority are non-union and operate their own individual plans (if they offer any at all).
PBGC is in enough trouble with all the airlines ditching their plans. If Central States goes belly-up PBGC will probably be insolvent. Which means more bailouts. Which means more FedGov borrowing from the printing press that is the Federal Reserve.
At that point there may not be ANY plan that helps anyone. Even a totally private one.
For all of the heartache that employees have endured over the years, the pension/retirement hurdle is a big, big deal. Many of the companies changed over to a cash balance plan as they terminated their traditional plans. There was a great amount of controversy about this (I remember the IBM termination), but it looks like those employees are going to be the lucky ones. Even defined contribution plans are in danger as Uncle Sam begins to eye the 6 Trillion dollars in those plans as a source of revenue.
We certainly live in interesting times.