A Tale of Two Teamsters Pension Plans – Not

According to a Bloomberg article:

Central States is among the approximately 130 plans that have projected they will run out of money in the next 20 years. That means the plan’s members could lose their pension benefits. The Western Conference, on the other hand, is close to fully funded and in a good position to pay out pension benefits.

They include a chart:

Both wrong and deceiving………

Just because they are not in the dirty-130 does not mean Western States is safe for the next 20 years. A blog we did here on these plans also had a comparison:

EIN. 36-6044243 is Central States which admits to being in risk category D (Critical and Declining) while the next three report their status as N (Not Endangered or Critical). Is that really the case or are they playing games with actuarial assumptions?

Excerpts from 91-6145047:

Plan Name: Western Conference of Teamsters Pension Plan
EIN/PN: 91-6123695/001
Total participants @ 12/31/16: 571,771 including:
Retirees: 188,571
Separated but entitled to benefits: 176,700
Still working: 206,500

Asset Value (Market) @ 1/1/16: $36,288,138,000
Value of liabilities using RPA rate (3.28%) @ 1/1/16: $67,081,610,000 including:
Retirees: $32,324,534,000
Separated but entitled to benefits: $8,915,217,000
Still working: $25,841,859,000

Funded ratio: 54.09%
Unfunded Liabilities as of 1/1/16: $30,793,472,000

5 responses to this post.

  1. Posted by Anonymous on August 6, 2018 at 12:44 pm

    One foot in the grave and the other on a banana peel.

    I don’t “follow” the financial pages, but is there another elephant in the room?
    I have a modest IRA, and in the year after D. Trump was elected, it grew by about ten percent (balanced portfolio, stocks, bond, cash… similar to CalPERS allocation.) Yay!

    In the last six months? Nada. Balance on Aug. 1 is same as balance on Jan. 1.

    What will the MEP and public pension funds look like at year end?

    Reply

  2. Posted by Stephen Douglas on August 6, 2018 at 1:57 pm

    “You give your life to a company and then in the end you get shafted.”

    Not an MEP. Not a public plan. Not even in this country. Maybe that’s why they call it the Global Pension Crisis.

    And, to some, the government (taxpayers) is always the answer.

    “Some retirees believe the federal government should step in to help. ”

    “I don’t know what you have to do to get the government to listen,” said Gail McClelland of Calgary, who worked for Sears for 33 years. “There has to be something done to protect pensioners.”

    http://www.cbc.ca/news/business/sears-canada-pension-retirees-1.4773283

    Reply

  3. Posted by Stephen Douglas on August 6, 2018 at 2:17 pm

    It’s true that a lot of plans that are not critical today may become so tomorrow if (when) another recession hits. But funded status is not the only criteria.

    The Bloomberg article mentions 4 differences between the two plans that may save Western Conference of Teamsters…

    Trucking deregulation hit Central States harder. (Lost 90% of contributing employers.)

    Central States has higher ratio of inactive to active employees.

    “In down markets, (e.g. 2008) Western Conference generates sufficient revenue from their contribution base, but Central States has to eat into its assets in order to make all the benefit payments,” 

    “The Western Conference had an advantage in its funding policy that gave it the flexibility to adjust benefit accrual rates to adapt to changing financial conditions.”

    Reply

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