The U.S. Treasury Department on Wednesday announced that active and retired Teamsters across upstate New York had voted against big pension reductions by a more than 2-1 ratio.
But since most of the 34,000-plus eligible Teamsters didn’t vote — and under federal law, an unreturned ballot counts as a “yes” vote — the cuts are approved, and will take effect Oct. 1.
For most retired Teamsters, this will mean a 29 percent reduction in their pension checks. The oldest retirees and those receiving disability pensions will not see any reductions. Teamsters who are still working will see a 19 percent reduction in the pension benefits promised to them when they do retire.
The New York State Teamsters Conference Pension and Retirement Fund identified 35,173 participants and beneficiaries who were eligible to vote, and ballots were delivered to 34,636 of these individuals. (The other 537 could not be located.)
The voting period opened Aug. 16 and closed Sept. 6.
Of the ballots returned, there were 9,788 against the pension cuts and 4,081 in favor; the other 20,767 ballots that had been sent out were not returned and so became “yes” votes.
The Teamsters leadership has blamed a shrinking unionized workforce and pension law changes for their pension fund’s problems, and said reducing the amount of money paid is crucial to keeping it solvent.
Washington, D.C., attorney John Ring, counsel for the pension fund, said Wednesday that shifting demographics remain a problem but the Teamsters’ projections — accepted by the Treasury Department — show that the fund will remain solvent for at least 30 years under the cuts to be made starting Oct. 1.
He said it’s a common problem for this type of pension.
“The New York state plan is not the only multiemployer plan that’s in trouble,” he said, adding that some are in such bad shape that they won’t even be allowed to take steps to save themselves under the federal Multiemployer Pension Reform Act of 2014.
Teamsters Local 707 in New York City went insolvent after it was denied cutbacks under MPRA, for example. Pensions for more than 4,000 retirees were slashed more than 50 percent when the federal Pension Benefits Guaranty Corp. took over payments.
Ring said there are not many good long-term solutions to the pension fund’s problem, which is simple: More money being paid out than put in.
The pension fund is growing through investment in various vehicles, but that also is not enough to offset payouts, Ring said. Aside from the disastrous years of 2001 and 2008, the pension fund has performed well and averaged an 8.5 percent annual return, he added.
Tom Baum of Rotterdam, a retired UPS worker and former officer of Teamsters Local 294 in Albany, served as the retiree representative during the MPRA process. He became the focal point for criticism for a lot of union members looking at big changes to their income if not their standard of living.
On Wednesday, he repeated his criticism of MPRA, under which a non-vote is counted as a “yes” vote.
He had predicted a lot of “no” votes but nonetheless had expected a “yes” outcome due to the “rigged” rules.
But he’s glad it’s over.
“Do I like it? No. I’m just hoping that down the road there’s a better solution than the 29 percent,” Baum said.
“The numbers tell it like it is. It’s a very sad scenario. There’s a lot of people that are going to be in trouble because of it.”
Baum’s only immediate suggestion is for pensioners to consider changing their tax withholding.
“I encourage them to change their federal income tax benefit,” he said. “I did it myself.”