Central States Model for America

There are many Multiemployer (Union) plans that are as badly funded as your typical government plan (when valued honestly) since, even though union plans have rules, they have some ‘flexibility’ that allows them to keep using 7.5% interest rates for funding and, since 2014, cut benefits when they deem appropriate which is exactly what the Teamsters Central States Pension Plan is doing.

A little perspective:

As I predicted last June a government official (Kenneth Feinberg) is deciding how much participants get of whatever money remains and, though the participants get to vote, their vote only counts if is for the cuts:

Even if a majority votes no….the law requires the Treasury Department to impose the changes, once it approves them, because the Central States fund is so large that it qualifies as “systemically important.” That means that if it collapsed, it could take down the multiemployer wing of the Pension Benefit Guaranty Corporation, jeopardizing the retirees who currently get their pensions through the program.

So much for legislated democracy.

Checking out the plan’s 5500 filing for 2013* here are the important numbers as of 12/31/13:

  • Trust assets: $18,740,758,554
  • Number of retirees: 206,081
  • Benefit Payouts during 2013: $2,822,507,812
  • Average annual payout: $13,696
  • Contributions for 2013: $571,103,756
  • Plan funded ratio as of 1/1/13: 47.6%

That last number – 47.6% – is based on a 7.5% interest rate and is still higher than any plan Illinois sponsors.

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* For those loath to look through all 424 pages here are the pertinent excerpts.  The 2014 5500 should be on the internet next week and we will update these numbers.

44 responses to this post.

  1. Posted by Anonymous on October 8, 2015 at 8:54 am

    Happy Halloween, P&B reform – Trick OR Treat! Testing, testing, 1, 2, 3!

    Reply

  2. Posted by anon on October 8, 2015 at 10:15 am

    2.8 billion in contributions a year? Yeah, definitely could take out the PBGC.

    Reply

  3. Here is something for someone to research.

    New York and New Jersey face a transportation crisis, with no money to maintain, let alone expand and improve, their infrastructure.

    Part of this is the result of debt — borrowing for mere maintenance for 20 years, leaving all the transportation “trust fund” money going to bonds, not transportation. Tax cuts and low NJ gas taxes get some of that blame.

    But part of that is exploding costs. Why are costs exploding?

    I believe that tri-state public infrastructure spending is being raided to bail out the multi-employer pension funds of metro area (or statewide or Northeast or who knows?) construction companies/unions.

    Like the public sector, the unions and companies cut deals to retroactively increase pensions and cut contributions. But they can’t force private developers to pay for this — they go non-union, increasingly. So instead they are making the government pay, back door, through inflated bids on capital projects. Over and above the cost of the consultants, lawyers, mafia and various hangers on. Even as benefits and wages for new construction workers are cut.

    So, am I right? Which multi-employer pension funds serve the companies/unions that work on public capital projects in NY and NJ, and what is their funded status? Why isn’t this issue out in the open?

    Reply

  4. Posted by dentss dunnigan on October 8, 2015 at 10:52 am

    What is the cash value of the average reciently retiree now ? 2 million ,3 million ? how is this anywhere near sustainably ,If not reduced soon those paying into the system will see zero ….how is this fair to their fellow worker ?

    Reply

    • Posted by Anonymous on October 8, 2015 at 11:53 am

      Your probably on the high side but why speculate.

      John, what’s the average retirement age, pension amount, and life expectancy for PERS and TPAF.

      COLA not a factor. Only pension variable unaccounted for is survivor’s benefits when retiree takes a reduced amount under a jla.

      Reply

    • Posted by anonymous on October 8, 2015 at 12:41 pm

      That’s absurdly high. Even with no discounting, they’d need to receive 36 years of the average benefit to get to half a million dollars. Being generous, a 30 year period on average for payout of the benefits, At a 2% discount rate, you could get that up to a around three hundred thousand present value. Using their 7.5%, it would be under two hundred thousand present value. You’d actually use mortality and interest, but these approximations should make clear it’s not true.

      Even if the recent retirees are double the amount of the total average, seems unlikely that they’d hit a million even with NO discounting for interest.

      Reply

      • Posted by Anonymous on October 8, 2015 at 1:06 pm

        You’re probably right, I was suggesting a guesstimated gross cash payout calculation.

        Reply

        • Posted by Pat on October 8, 2015 at 3:50 pm

          Not including health care costs, the present value of my expected retirement starting in January at the age of 54 and receiving $4K monthly for an expected 30 years….I would need to deposit $875K today. No where near $2 million! Not even $1 million!

          Reply

          • Posted by Anonymous on October 8, 2015 at 4:22 pm

            A Superior Court judge on Thursday blocked an attempt by the trustees of New Jersey’s largest pension funds to revise their suit seeking billions of dollars from the state in light of a recent state Supreme Court decision on pension payments.

            The state’s highest court in June found the state had no “legally binding, enforceable obligation” to make payments into the pension system of a state trooper’s union. The ruling had broad implications for a number of lawsuits filed by other public workers unions.

          • Posted by Anonymous on October 8, 2015 at 4:36 pm

            The judicial process mirrors the current political process, Remember In the next three Novembers!

          • Posted by dentss dunnigan on October 8, 2015 at 6:47 pm

            I’m not “way off” ..example …chief of police of town retires in Jan 2007 age 52 pension $ 98,400 rioters already 9 years collecting so far 885K he’s now 62 if he lives to 80 he’ll collect another 1,764,000K ,till 85 another 2,254,000. so if this guy lives to 85 he’ll collect over 3 million not counting health (and cola if it gets reinstated .And this is just one guy in a town of 5K people ..http://php.app.com/retireNJ/details.php?recordID=219403

          • Posted by Anonymous on October 8, 2015 at 6:57 pm

            Not questioning the accuracy of your example but AVERAGES encompass the totality of a universe (ie P&FRS, TPAF, PERS etc.) not ONE example.

          • Posted by ~The Resident Nutcase on October 8, 2015 at 10:19 pm

            By posting and singling out one high end pension is how these idiots go on their stupid rants. TL…. Included. And the rest believe this crap!! 3-4 million….. Get real.

          • Posted by Tough Love on October 8, 2015 at 11:18 pm

            Defined Benefit Public Sector pensions are TYPICALLY 3x-4x (4x-6x for Safety workers) greater in value at retirement (when properly incorporating the MUCH richer “formulas” and the MUCH more generous “provisions” such as full/unreduced retirement ages and COLA increases, now suspended in NJ) than those of comparable Private Sector workers retiring at the SAME age, with the SAME service, and the SAME years of service…….. and that relationship stands true at ALL income levels. It is true with the worker is earning 30K, 50K, 75K 100K , etc.

          • Posted by dentss dunnigan on October 9, 2015 at 4:15 pm

          • Posted by Tough Love on October 9, 2015 at 6:03 pm

            Of course it’sNOT an oddity. If NJ’s COLAs are reinstated, almost EVERY full career NJ Police Officer retires with a pension worth close to $2 Million.

  5. Posted by LAZY on October 8, 2015 at 4:22 pm

    A Superior Court judge on Thursday blocked an attempt by the trustees of New Jersey’s largest pension funds to revise their suit seeking billions of dollars from the state in light of a recent state Supreme Court decision on pension payments.

    The state’s highest court in June found the state had no “legally binding, enforceable obligation” to make payments into the pension system of a state trooper’s union. The ruling had broad implications for a number of lawsuits filed by other public workers unions.

    Reply

    • Posted by Anonymous on October 8, 2015 at 4:37 pm

      And post it again, again, and again – TL’s testing again?

      Reply

      • Posted by Lukeu on October 8, 2015 at 6:28 pm

        Off topic: Take note that the federal government is taking aim at reducing incarceration of non violent offenders which will save billions. Hopefully New Jersey will pay attention and follow suit to save taxpayers money that does not need to be spent. Why no one in the governors office or the legislature has proposed doing it yet is a mystery. christie kept saying there was no money to put into pensions. Well, as I noted before we need to reduce the prison population because it is too costly. New Jersey please do it.

        Reply

        • Posted by Anonymous on October 8, 2015 at 6:34 pm

          Not off topic at all, everything revolves around the almighty dollar! Wonder what accrued benefits the incarcerated fleece the taxpayers?

          Reply

  6. Posted by george on October 8, 2015 at 9:38 pm

    Western ‘states’ pension claims it is not in trouble.

    What Does the Recent Passage of the Multiemployer Pension Reform Act (MPRA) Mean for You?

    With the passage of MPRA, we have received concerns from active and retired participants about whether the new law will have any impact on the WCT Pension Plan. In short, the new law will NOT affect in any way our Plan’s ability to pay all promised pension benefits, so our retirees and other participants do not have to worry about their benefits being reduced. For more information, please see the Letter from the Union Chairman dated January 2, 2015, which answers questions about the recently-passed federal legislation.

    http://www.wctpension.org

    Reply

    • Posted by Anonymous on October 9, 2015 at 10:15 am

      OK another example not an average of the total population cited. Also it’s for TWO retiree’s not ONE as dentss is eluding to. Your point is well taken but the examples misleading!

      Reply

  7. Posted by Anonymous on October 9, 2015 at 10:32 am

    Doesn’t sound like a life threatening position yet still ALL the same benefits of the few (relative to total enlisted) in combat – Fair & Equal?

    Equal Employment Manager
    Department of the Army
    $70,192 – $91,255 a year
    Full-time, Commission
    Department of the Army
    24979 reviews
    Read what employees say about working here.
    The National Guard is the oldest component of the Armed Forces of the United States. Since the earliest American colonial days, citizens have joined together for collective defense. We have a proud tradition of coming to the aid of our friends and neighbors in times of serious emergencies. Join our National Guard team and serve your nation, your State and your community!

    FLORIDA NATIONAL GUARD

    NATIONAL GUARD MEMBERSHIP IS REQUIRED: This is an excepted position that requires membership in a compatible military assignment in the National Guard. Selectee will be required to wear the military uniform. Acceptance of an excepted position constitutes concurrence with these requirements as a condition of employment. Applicants who are not currently a member of the National Guard must be eligible for immediate membership and employment in the National Guard in the military grade listed in this announcement.

    This position is located at HRO, St Augustine, FL

    AREA
    OF CONSIDERATION : This position is in the Excepted Federal Civil Service
    “under the authority of 32 U.S.C. 709”, and is open to ON BOARD excepted military technicians within the HRO of the Florida National Guard.

    INTRODUCTION: This position is located in the Human Resources Office. The position’s purpose is to provide guidance and advice to
    the Adjutant General, senior commanders and managers on statutory requirements
    relating to the entire EEO program.

    TRAVEL REQUIRED
    Occasional Travel
    As Required RELOCATION AUTHORIZED
    No KEY REQUIREMENTS
    Must be willing to become a member of the National Guard. DUTIES: Back to top

    DUTIES & RESPONSIBILITIES: Serves as principal advisor to the Adjutant General and manages the Equal
    Employment Opportunity program to include Special Emphasis Programs, the
    Affirmative Employment Plan, Alternate Dispute Resolution, and Complaints
    Processing System for the Army and Air National Guard population of the
    state. Studies and analyzes employment laws, regulations and policies
    from National Guard Bureau Headquarters to formulate and implement the state’s
    EEO program. Reviews Human Resources policies and programs to determine barriers, if any;
    advises the Adjutant General relative to their impact on National Guard policy
    to overcome under representation of minorities and women; and recommends changes
    or new actions to the Adjutant General, Chief of Staff, and Human Resources
    Officer. Conducts meetings both on and off the National Guard installation with community
    outreach organizations in the interest of improving equal employment
    opportunity/diversity initiatives and relationships.

    QUALIFICATIONS REQUIRED: Back to top

    GENERAL EXPERIENCE : Must have a dministrative, professional, investigative, technical or other types of experience which demonstrates ability to meet and deal effectively with persons of different ages, races and economic and education background; to collect and assemble pertinent facts, and preparing clear and concise written reports.
    SPECIALIZED EXPERIENCE : GS-12 must have 36 months experience, education, or training involving the administering, delivering, maintaining, advising, and adapting advanced concepts, principles, and theories of Equal Employment Opportunity (EEO) to the unique organizational, management, and mission requirements. Experience assisting in the development of Equal Employment Opportunity (EEO) policies and procedures. Experience advising management on Equal Employment Opportunity (EEO) principles and practices.
    COMPATIBILITY REQUIREMENTS : All applications will be considered regardless of Branch/AOC/FA/MOS. Incumbent will be required to be assigned to and qualify in a compatible military position. The selected individual may be required to attend formal technical school training in a military status. Compatible assignments include: AFSC: 38PX.

    NOTE #1 :
    Incumbent must possess or be able to acquire the appropriate level
    security clearance for this position.

    MILITARY GRADE : Commissioned Officer: CPT/O3 thru Lt Col/O5.
    Please include your military grade in your resume.

    Participation in direct deposit is mandatory.

    APPLICANTS SHOULD CONTACT THEIR STATE
    INCENTIVES MANAGER TO DETERMINE IF ACCEPTING THIS POSITION WILL AFFECT ANY
    BONUS RECEIVED FROM THE MILITARY.

    Permanent Change of Station (PCS) costs
    MAY be authorized. Authorization for payment of PCS expenses will be granted
    ONLY after determination is made that payment is in the best interest of the
    Florida National Guard.

    HOW YOU WILL BE EVALUATED:
    Once the application process is complete, a review of your application will be made to ensure you meet the job requirements. To determine if you are qualified for this job, a review of your resume and supporting documentation will be made and compared against your responses to the occupational questionnaire. The rating you receive is based on your responses to the questionnaire and supporting documents. If, after reviewing your resume and or supporting documentation, a determination is made that you have inflated your qualifications and or experience your rating can and will be adjusted to more accurately reflect your abilities. Please follow all instructions carefully. Errors or omissions may affect your rating. BENEFITS: Back to top
    The following Web addresses are provided for your reference to explore the major benefits offered to most Federal employees.

    Flexible Spending Accounts – The Federal Flexible Spending Accounts Program (FSAFeds) allows you to pay for certain health and dependent care expenses with pre-tax dollars. Visit: https://www.fsafeds.com/fsafeds/index.asp

    Health Insurance – The Federal Employees Health Benefits Program offers over 100 optional plans. Visit: http://www.opm.gov/insure/health/index.asp

    Leave – Most Federal employees earn both annual and sick leave. Visit: http://www.opm.gov/oca/leave/index.asp

    Life Insurance – The Federal Employees’ Group Life Insurance Program (FEGLI) offers: Basic Life Insurance plus three types of optional insurance. Visit: http://www.opm.gov/insure/life/index.asp

    Long Term Care Insurance – The Federal Long Term Care Insurance Program (FLTCIP) provides long term care insurance for Federal employees and their parents, parents-in-law, step parents, spouses, and adult children. Visit: http://www.ltcfeds.com/

    Retirement Program – Almost all new employees are automatically covered by the Federal Employees Retirement System (FERS). FERS is a three-tiered retirement plan. The three tiers are: Social Security Benefits, Basic Benefit Plan, Thrift Savings Plan. Visit: http://www.opm.gov/retire/index.asp

    This link provides an overview of the benefits currently offered to Federal employees. http://www.usajobs.gov/EI/benefits.asp

    OTHER INFORMATION:
    1. If you are a male applicant who was born after 12/31/59 and are required to register under the Military Selective Service Act, the Defense Authorization Act of 1986 requires that you be registered or you are not eligible for appointment in this agency.

    2. Please DO NOT send/fax/courier/email any applications or resumes to the National Guard Human Resource Office, you MUST apply on-line or fax your application to the fax number listed on this announcement with the prescribed Cover Letter. The Human Resource can only process materials received through USA Jobs.

    Reply

    • Posted by Anonymous on October 9, 2015 at 11:16 am

      BTW, the above comment is not intended to diminish those that protect us here and abroad. But when the topic of discussion is about Fair & Equal, well nothing is sacred – including insatiably greedy upper management private sector Corporations!!!

      Reply

      • Posted by Tough Love on October 9, 2015 at 12:22 pm

        Repeating …………….

        Defined Benefit Public Sector pensions are TYPICALLY 3x-4x (4x-6x for Safety workers) greater in value at retirement (when properly incorporating the MUCH richer “formulas” and the MUCH more generous “provisions” such as very young full/unreduced retirement ages and COLA increases, now suspended in NJ) than those of comparable Private Sector workers retiring at the SAME age, with the SAME service, and the SAME years of service…….. and that relationship stands true at ALL income levels. It is true with the worker is earning 25K, 50K, 75K, 100K, 125K, 150K, etc.
        ——————————————————————————

        THAT advantage must end ….COMPLETELY.

        And that advantage has NOTHING to do with greedy CEO compensation paid for NOT by taxpayers, but voluntarily by those who freely CHOOSE to deal with the company as customers and/or investors.

        Reply

        • Posted by Anonymous on October 9, 2015 at 12:34 pm

          Repeating as well;
          Taxpayers have that same choice at the Local and State level to – move to another Municipality or State. At the Federal level your only choice is forfeit citizenship and move to another Country! Your private sector free market choice is applicable to public, just to be Fair & Equal – unless?

          Reply

        • Posted by Anonymous on October 9, 2015 at 12:51 pm

          Great sidestep deflection, guess when you’re right you’re right – very tiring indeed!

          Reply

          • Posted by Tough Love on October 9, 2015 at 1:36 pm

            Yes ….what I stated is accurate.

            What’s “tiring” is grossly OVER-COMPENSATING our Public Sector workers via their absurdly generous pensions & benefits.

          • Posted by Anonymous on October 9, 2015 at 1:40 pm

            And so to what I’ve stated is accurate!

          • Posted by S Moderation Douglas on October 10, 2015 at 3:47 am

            “OVER-COMPENSATING our Public Sector workers”

            Correction, over compensating “some” public sector workers and grossly under compensating others. There is absolutely no doubt.

          • Posted by Tough Love on October 10, 2015 at 9:29 am

            Yes, S Moderation Douglas, with (per the AEI Study) the NET IMPACT (in NJ) of OVERCOMPENSATING NJ’s PUBLIC Sector workers) by 23% of pay ….. 34% if the incremental value of the much greater Public Sector job Security is properly factored in.

            Taxpayers …… how much better would YOUR retirement be if YOU had an ADDITIONAL 23% of pay to save and invest in every year of your career … $1 Million, maybe $2 Million?

            Well, that’s what NJ’s Elected Officials are now unnecessarily, unjustly, unfairly (to you) and unaffordably promising NJ’s Pubic Sector workers.

            It’s time to FREEZE ALL of these (State AND Local) Defined Benefit pension Plans and materially reduce the “Platinum+” healthcare coverage they (but not you) now get at YOUR expense …… just as proposed by the NJ Pension Commission.

  8. Posted by S Moderation Douglas on October 9, 2015 at 10:31 pm

    http://www.troymessenger.com/2015/10/07/underfunded-state-pensions-its-a-matter-of-fairness/

    I saw this article and figured this guy must be Tough Love in real life.

    Quote: “The debate over public pensions, I think, has too often focused on secondary matters as opposed to the fundamental problem. State pensions are underfunded today because politicians for decades pushed costs onto future workers and taxpayers. And this is why we need fundamental reform. But let’s first consider some of the other issues that have gotten more press.”

    This guy has cred. He is the Charles G. Koch Professor of Economics with the Manuel H. Johnson Center for Political Economy at Troy University

    Yes, “that” Charles G. Koch!!!

    I say we give this guy the reins and let him lead us out of this pension fiasco.

    Got a problem with fairness?

    Reply

  9. […] Central States, Southeast And Southwest Areas Pension Plan […]

    Reply

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