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Treasury Department OKs Teamsters Local’s Pension Cuts

December 1, 2018

By Steve Wishnia and Neal Tepel

WASHINGTON—The Treasury Department on Nov. 16 approved Teamsters Local 805’s application to cut pension benefits effective Jan. 1. Members of the New York-based local had voted to reject the proposed cuts by 535-296, but almost 1,100 of the plan’s participants did not vote, and under the Multiemployer Pension Reform Act of 2014, a majority of all eligible voters have to vote no for a rejection to be valid. The Local 805 fund is projected to be insolvent within six years. About 500 current participants will be protected from any reductions because they are over 80 or disabled, but the 1,500 others will face cuts averaging 40.8%. The federal Pension Benefit Guaranty Corporation will take over responsibility for “orphan participants” who worked for employers that no longer contribute to the plan, and employers who still do will put in 3% more annually. The Treasury Department has approved eight multiemployer pension plans’ applications to reduce benefits, denied five, and is currently reviewing 11. International Brotherhood of Electrical Workers Local 237 in Niagara Falls, N.Y., applied in September, saying that despite an almost fourfold increase in employer-contribution rates since 1999, its plan is projected to be insolvent by 2027.
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December 1, 2018

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