Over the past few months, we have covered the unfolding saga (here and here) of the Central States Pension Fund, which handles retirement benefits for current and former Teamster union truck drivers across various states including Texas, Michigan, Wisconsin, Missouri, New York, and Minnesota, and is one of the largest pension funds in the nation, all the way through Kenneth Feinberg’s rejection of the proposal to cut benefits on behalf of the Treasury.
When the proposal was rejected, we said that the final resolution will be in the form of an inevitable taxpayer-funded bailout
If the Treasury won’t allow any pension cuts, and the government created safety net won’t be there to keep the benefits flowing, how will the cash continue to flow to members? With the precedent now set by the Treasury that no cuts will be allowed, the answer will likely come in the form of a massive bailout.
As it turns out, that is precisely what fund director Thomas Nyhan believes as well. Nyhan said the rejection means the CSPF likely won’t be able to offer another proposed fix without getting funding from Congress, either directly or through the Pension Benefit Guaranty Corp.
However with the PBGC also on its way to insolvency, and unable to shoulder the additional burden in world of zero and negative rates, that leaves us with… drum roll please… the US taxpayers, aka Congress, footing the bill.
“There are only two solutions. Either the plan receives more money or has to have fewer benefits. I’m hopeful that come probably 2017, we can actually all get to work on something that can provide a solution. If there is no legislation at any time, we’re going to end up going to insolvency.” Nyhan said.
The full-court press is now on, as now everyone involved is calling on congress to step in. Visitors toCSPF’s website this morning were greeed with a banner directing to a rescue plan website.
Before you could enter the rescue site a pop-up message is shown, simply saying that since congress effectively shut down the proposal, they can now stand up and pass legislation to bail the fund out.
“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”
With the Treasury denying the possibility of pension cuts, the ball is now in Congress’ court to initiate a bailout.
When it does, because it will, the flood gates will be open for the rest of the insolvent funds to come knocking with their hands out, and we can formally welcome the arrival of helicopter money – whether Yellen wants it or not – in the United States.
What follows is Tom Nyhan testifying before congress back in 2013, laying it out in very plain terms that without funding, or significant benefit cuts, the game is over.
“Unless the fund substantially reduces its liabilities, or receives a large influx of assets, it’s projected become insolvent within ten or fifteen years, and at this point our options are very limited.”
Nobody listened, and now – in this bold new age of pension fund crushing zero and negative interest rates – it is game over.
Crooks.
Pay the top officials less than half of what they receive. They should be fired for mis-management (good luck on that).
Unions pay their employees (and thugs) far better than those they “represent”.
Screw the unions, they all suck.
Well before had the great misfortune of being a member of UFCW, they really liked me until I was canned, then they simply said “sorry, nothing we can do”, I despised unions.
There was still a contract.between the Union and the workers.
Now the Union wants out of the contract.
The workers will not let the Union out of its side of the contract, so the Union runs to the politicians that the union bought to get them out of the contract.
The government caused this problem. They took over the pension fund in 1982 & gave it to Morgan Stanley to be managed for the “benefit of the members”. Then they gave it to Goldman Sachs & the real screwing began. Before 1982 the Mafia ran it & because there was so much money they paid out 13 checks a year. The government wouldn’t let them bank it for a rainy day. Like I said, the government caused this problem let the a–holes figure out how to get it back. They just fined Goldman a huge fine. Take it from those pr#@ks. Go to Market Watch.com for more gory details.
When the government fines a bank, where does the money go?
Is there any evidence that the bank wrote the check. This country would be better served if it was run by the Mafia.
Oh wait. All the Mafia family’s are not Italian. They are Jewish.
So, the socialists in the unions want yet another break courtesy of the American taxpayer? I’ll take kiss my ass for $500, Alex.