Treasury Department Rejects Teamsters’ Remedial Pension Plan

The Treasury Department’s Special Master, Kenneth Feinberg, rejected the remedial application of the Teamsters Central States’ pension plan to cut benefits in order to save the plan from even greater cuts due under the Pension Benefit Guaranty Corporation insolvency status.

Feinberg said the remedial plan actuarial and participant age assumptions were unreasonable, the benefits cuts were not distributed equitably across all participant categories and the explanation of the remedial plan did not meet the “understandability” criteria of the Pension Reform Act.

Reacting to the Treasury Department’s action, the Partnership for Retirement Security (sponsored by MCAA, the National Coordinating Committee for Multiemployer Plans and other signatory groups), said,

“While today’s decision by the U.S. Department of the Treasury to deny Central States Pension Fund’s rescue plan will temporarily spare many from cuts to their hard-earned benefits in the short-term, it also sentences participants to an insecure retirement where massive benefits cuts are inevitable. By their decision today, Treasury is gambling that Congress, which has flatly refused to assist these plans or the PBGC in the past, will now appropriate more than $100 billion required to rescue, not just Central States, but the entire system. It is a big bet. Unfortunately, rather than those who made the decision, it will be the pensioners who pay the price if it is lost.”

The NCCMP alternate plan design proposal – composite plans – which is designed to avoid the Central States type problem, will be at the top of the agenda for the Quality Construction Alliance National Issues Conference, which takes place in Washington, D.C. May 10-12.