Schumer pushes bill to restore cuts to Teamsters’ pensions

SYRACUSE — U.S. Senate Minority Leader Charles Schumer (D–N.Y.) on Nov. 22 told members of Teamsters Local 317 that he’s working to get a bill approved that would restore cuts made to their pension plans. 

Syracuse–area Teamsters, who have already suffered pension-benefits cuts, are at “significant risk” of losing even more of what they earned and saved over a lifetime of work, according to Schumer’s office.

The Democrat spoke to Teamsters members at the local headquarters at 566 Spencer St. in Syracuse. 

“This issue does not just affect Central New York. It affects all of New York state, Downstate, Upstate, all the Teamsters in all parts of the state,” said Schumer.

In response, he and his Democratic colleagues in the U.S. Senate, are pushing new legislation that would ensure local Syracuse–area Teamsters (and thousands of other Upstate Teamsters) can avoid cuts in the future — and perhaps reverse past cuts. 

Schumer contended that this “must-pass legislation is necessary” to put Syracuse workers’ hard-earned pension plans back “on solid footing.”

Background

After the 2008 financial crisis, the Great Recession, and “tectonic” shifts in the economy, many pension plans, including the New York State Teamster Conference Pension and Retirement Fund, absorbed “major” financial losses and now they’re “in danger of not meeting their full obligations to retirees,” Schumer’s office said. 

That pension and retirement fund has more than 34,000 participants, according to Schumer’s office.

Trustees and members of the Teamster Fund earlier this year faced a “tough choice” as the plan was 46 percent funded with $1.46 billion in assets and $3.14 billion in liabilities. Ultimately, the Teamsters went through a process to keep the plan solvent in the short term that included a 30 percent cut to benefits. 

Schumer said the New York State Teamster Conference Pension and Retirement Fund is “vital” to more than 34,000 members, including 16,000 retirees and some 18,000 active members. Thousands of Syracuse–area Teamsters from Local 317 are part of this fund, including 7,000 retirees and 5,000 active members. 

If pension plans are allowed to fail, not only will employers no longer be able to pay promised benefits, but taxpayers would be at risk of having to pay billions when the Pension Benefit Guarantee Corporation (PBGC), the government-sponsored insurance company for multiemployer pensions, cannot afford to cover losses and becomes insolvent.

“The PBGC is supposed to be on the hook … that’s a federal-government agency that promised to back up the pensions should they run into trouble, but the PBGC doesn’t have all the funding it needs and that’s why people here have suffered a cut in their pensions, unfairly and through no fault of their own,” Schumer said to those gathered at the Teamsters Local 317 headquarters on Spencer Street.

Butch Lewis Act

Schumer wants Congress to “immediately” pass the Butch Lewis Act. The bill, introduced by Sen. Sherrod Brown (D–Ohio), would work to “ensure that no American loses the pension benefits that they deserve.” 

“Butch Lewis was a Teamster activist and he died fighting to … rectify this injustice,” Schumer said in his remarks.

For the members of the New York State Teamster Conference Pension and Retirement Fund, this bill would help the plan avoid cuts in the future and even help reverse past cuts. 

Without this bill’s protections, further future cuts “are still possible,” Schumer contends. 

“If this bill passes, then there will be no more cuts and there’s a very good chance some of the previous cuts can be restored, depending on the individual pension plan,” Schumer told the gathering. 

Creating the PRA

The “Butch Lewis Act” would create a new office within the U.S. Treasury Department, which would be called the Pension Rehabilitation Administration (PRA), Schumer explained. 

The PRA would allow pension plans to borrow the money they need to “remain solvent and continue providing retirement security for retirees and workers for decades to come.” 

The money for the loans and the cost of running the PRA would come from the sale of Treasury-issued bonds to financial institutions. The PRA would sell Treasury-issued bonds in the open market to large investors such as banks. The PRA would then lend the money from the sale of the bonds to the financially troubled pension plans, according to Schumer.

To ensure that the pension plans can afford to repay the loans, the PRA would lend them money for 30 years at low-interest rates — about 3 percent. “The 30-year loans would buy time for the pension plans, so they can focus on investing for the long-term health of the plan, while the loans pay benefits owed to current retirees,” according to Schumer’s office.

 In addition to prohibiting the borrowed funds from being used to make “risky investments,” the bill also requires plans that borrow money to submit reports to the PRA every three years to demonstrate that the plans are on track to getting back on “solid footing.” 

Pension plans may borrow as much money as they need, as long as they can demonstrate the ability to repay the loan, the legislation stipulates.

The interest will be comparable to that of a 30-year Treasury bond. The rate may be slightly higher in order to cover operating costs for the PRA. During the first 29 years of the 30-year loans, the pension plans will pay only fixed interest rates on the money they’ve borrowed. 

In the last year, the pension plans will pay interest on the loans and repay all the money they borrowed — since the money comes from the sale of Treasury-issued bonds to financial institutions, according to Schumer’s office. 

These PRA bonds will be fully backed by the Treasury. Schumer contends the PRA “will not have trouble raising the money because investors want long-term bonds that carry little risk.”           

SYRACUSE — U.S. Senate Minority Leader Charles Schumer (D–N.Y.) on Nov. 22 told members of Teamsters Local 317 that he’s working to get a bill approved that would restore cuts made to their pension plans. 

Syracuse–area Teamsters, who have already suffered pension-benefits cuts, are at “significant risk” of losing even more of what they earned and saved over a lifetime of work, according to Schumer’s office.

The Democrat spoke to Teamsters members at the local headquarters at 566 Spencer St. in Syracuse. 

“This issue does not just affect Central New York. It affects all of New York state, Downstate, Upstate, all the Teamsters in all parts of the state,” said Schumer.

In response, he and his Democratic colleagues in the U.S. Senate, are pushing new legislation that would ensure local Syracuse–area Teamsters (and thousands of other Upstate Teamsters) can avoid cuts in the future — and perhaps reverse past cuts. 

Schumer contended that this “must-pass legislation is necessary” to put Syracuse workers’ hard-earned pension plans back “on solid footing.”

Background

After the 2008 financial crisis, the Great Recession, and “tectonic” shifts in the economy, many pension plans, including the New York State Teamster Conference Pension and Retirement Fund, absorbed “major” financial losses and now they’re “in danger of not meeting their full obligations to retirees,” Schumer’s office said. 

That pension and retirement fund has more than 34,000 participants, according to Schumer’s office.

Trustees and members of the Teamster Fund earlier this year faced a “tough choice” as the plan was 46 percent funded with $1.46 billion in assets and $3.14 billion in liabilities. Ultimately, the Teamsters went through a process to keep the plan solvent in the short term that included a 30 percent cut to benefits. 

Schumer said the New York State Teamster Conference Pension and Retirement Fund is “vital” to more than 34,000 members, including 16,000 retirees and some 18,000 active members. Thousands of Syracuse–area Teamsters from Local 317 are part of this fund, including 7,000 retirees and 5,000 active members. 

If pension plans are allowed to fail, not only will employers no longer be able to pay promised benefits, but taxpayers would be at risk of having to pay billions when the Pension Benefit Guarantee Corporation (PBGC), the government-sponsored insurance company for multiemployer pensions, cannot afford to cover losses and becomes insolvent.

“The PBGC is supposed to be on the hook … that’s a federal-government agency that promised to back up the pensions should they run into trouble, but the PBGC doesn’t have all the funding it needs and that’s why people here have suffered a cut in their pensions, unfairly and through no fault of their own,” Schumer said to those gathered at the Teamsters Local 317 headquarters on Spencer Street.

Butch Lewis Act

Schumer wants Congress to “immediately” pass the Butch Lewis Act. The bill, introduced by Sen. Sherrod Brown (D–Ohio), would work to “ensure that no American loses the pension benefits that they deserve.” 

“Butch Lewis was a Teamster activist and he died fighting to … rectify this injustice,” Schumer said in his remarks.

For the members of the New York State Teamster Conference Pension and Retirement Fund, this bill would help the plan avoid cuts in the future and even help reverse past cuts. 

Without this bill’s protections, further future cuts “are still possible,” Schumer contends. 

“If this bill passes, then there will be no more cuts and there’s a very good chance some of the previous cuts can be restored, depending on the individual pension plan,” Schumer told the gathering. 

Creating the PRA

The “Butch Lewis Act” would create a new office within the U.S. Treasury Department, which would be called the Pension Rehabilitation Administration (PRA), Schumer explained. 

The PRA would allow pension plans to borrow the money they need to “remain solvent and continue providing retirement security for retirees and workers for decades to come.” 

The money for the loans and the cost of running the PRA would come from the sale of Treasury-issued bonds to financial institutions. The PRA would sell Treasury-issued bonds in the open market to large investors such as banks. The PRA would then lend the money from the sale of the bonds to the financially troubled pension plans, according to Schumer.

To ensure that the pension plans can afford to repay the loans, the PRA would lend them money for 30 years at low-interest rates — about 3 percent. “The 30-year loans would buy time for the pension plans, so they can focus on investing for the long-term health of the plan, while the loans pay benefits owed to current retirees,” according to Schumer’s office.

 In addition to prohibiting the borrowed funds from being used to make “risky investments,” the bill also requires plans that borrow money to submit reports to the PRA every three years to demonstrate that the plans are on track to getting back on “solid footing.” 

Pension plans may borrow as much money as they need, as long as they can demonstrate the ability to repay the loan, the legislation stipulates.

The interest will be comparable to that of a 30-year Treasury bond. The rate may be slightly higher in order to cover operating costs for the PRA. During the first 29 years of the 30-year loans, the pension plans will pay only fixed interest rates on the money they’ve borrowed. 

In the last year, the pension plans will pay interest on the loans and repay all the money they borrowed — since the money comes from the sale of Treasury-issued bonds to financial institutions, according to Schumer’s office. 

These PRA bonds will be fully backed by the Treasury. Schumer contends the PRA “will not have trouble raising the money because investors want long-term bonds that carry little risk.”