August 1, 2016
By Steven Wishnia and Neal Tepel
Washington, DC – The federal Government Accountability Office has agreed to investigate investments made by the Teamsters Union’s Central States Pension Fund, whose financial problems have led to threatened cuts in retirement benefits for hundreds of thousands of members.
Angry Teamsters had pushed for the probe, believing that the fund’s investment advisers, including Goldman Sachs and the Chicago-based Northern Trust Corporation, had collected massive management fees while making dubious decisions that brought the fund to the edge of insolvency. While Goldman Sachs was advising the plan, it “lost $11 billion in a 15-month period,” said Leroy Goans, a retired union truck driver from Cincinnati. “It’s astonishing to now read about how Wall Street firms hired by Central States invested retirees’ pension funds in Iraq in 2008, right in the middle of a full-scale war in Iraq… or how they sunk $1.4 billion into risky Single A-rated mortgage-backed bonds in the middle of the housing meltdown,” said Rep. Marcy Kaptur (D-Ohio), a key congressional supporter of the inquiry. “Something is simply wrong, and the GAO will get to the bottom of this.” The Central States fund, she estimates, has about $16.8 billion in assets and long-term benefit obligations of $35 billion. Read more