The 5500 filing for 2014 for the Central States Pension Fund (CSPF) is 428 pages with 160 of those pages (12-171) being the Schedule C, a form where you report expenses being paid out of the trust which mostly go to Service Providers but for CSPF there are also several Trustees and Employees listed.
Were the Pension Benefit Guaranty Corporation (PBGC) to take over CSPF and cut benefits to the maximum allowed not only would participants take a substantial hit but these ‘Trustees’ and ‘Employees’ would be off the trust payroll entirely.
So it is that when the Treasury denied the CSPF rescue plan with its massive benefit reductions (encouraging larger reductions) the people who run the fund, on their website, fought back:
On May 6, 2016, the U.S. Department of the Treasury (Treasury) notified Central States Pension Fund that our proposed pension rescue plan has been denied. A copy of the communication from Treasury is available here.
Although the decision by our Trustees to file this application under provisions of the Multiemployer Pension Reform Act (2014) was gut wrenching, we are disappointed with Treasury’s decision, as we believe the rescue plan provided the only realistic solution to avoiding insolvency.
The Central States Pension Fund Trustees will carefully consider the most appropriate next steps, based on this denial and the final guidance issued by Treasury on April 26.
Central States Pension Fund remains in critical and declining status and is projected to run out of money within ten years, or even less. Because the Pension Benefit Guaranty Corporation (PBGC), the government’s pension insurance program, is also projected to run out of money, today’s decision means that, absent legislative action or an approved rescue plan, Central States participants could see their pension benefits reduced to virtually nothing.
Many Members of Congress, both in the Senate and House, have been vocal in calling for Treasury to reject our proposed pension rescue plan. Central States strongly urges these Members to act now to pass legislation that protects the pension benefits of the over 400,000 participants of Central States Pension Fund—something Congress and the White House did not do when we previously proposed a remedy in 2009 and 2010.
We strongly encourage all Fund participants to call their Congressional representatives to demand legislative action that protects their pension benefits. To find contact information for your U.S. Representatives and Senators:
- For U.S. Representatives, call 202-225-3121 or visit http://www.house.gov/representatives/find/
- For U.S. Senators, call 202-224-3121 or visit http://www.senate.gov/senators/contact/
The International Brotherhood of Teamsters, AARP and the Pension Rights Center, all of whom urged rejection of our proposed pension rescue plan, now must move beyond talk and take action to secure the funding needed to protect the pensions of all current and future Central States Pension Fund participants and beneficiaries.
We understand the uncertainty and anxiety that our participants and beneficiaries may be experiencing as this process continues. As always, our goal is to ensure that the Fund is able to continue to pay future benefits.
We will continue to provide updates on this website, through email for those who have registered to receive such communications, and/or by U.S. postal mail. You can also call our dedicated hotline at 1-800-323-7640 to listen to a recorded message with updated information.
Among the more obvious distortions:
- “Central States participants could see their pension benefits reduced to virtually nothing.” – No, there is PBGC protection up to a maximum limit. It is CSPF trustees and employees who could see their income reduced to nothing.
- “Central States strongly urges these Members to act now to pass legislation that protects the pension benefits” – The legislation exists as the PBGC exists.
MPRA allows benefits to be cut but not below 110% of what the PBGC would cover. If the people who run CSPF really had the welfare of their plan participants as their primary concern then they would be calling for either an increase in that 110% limit in MPRA or an increase in the underlying PBGC coverage limit. They’re not since a PBGC takeover is the last thing they want to see (and probably the last thing their negotiating partners want to see also).