UPS Receives Reprieve From Threatened Pension Cuts
Teamsters Union members, including thousands of UPS retirees, received a reprieve from threatened cuts to their pensions, when the U.S. Treasury late Friday rejected a bailout plan proposed by the Central States Pension Fund. The Fund’s plan would have meant reductions to checks of up to 90% in some cases to these union workers. Biltmore Capital applauds the decision by the U.S. Treasury which supports United Parcel Service.
But the victory hailed by labor unions could be short-lived. Kenneth Feinberg, the mediator who issued the decision rejecting the plan, cited several problems, notably that the proposed cuts would be unevenly applied. Feinberg said that under the proposal that some UPS workers had their benefits reduced more than others, noting that the law requires such cuts “be equitably distributed.” A UPS spokesman told the Wall Street Journal, “UPS appreciates the thorough review by Treasury,” adding that Central States Fund’s future is not clear.
Fund administrators say that without the asked-for reductions, the plan faces a shortfall that could leave it insolvent in a decade. The pension plan has suffered from investment losses from the 2008 financial crisis and a decline in membership due to deregulation of the trucking industry. Administrators say it has half the money the plan needs to meet future obligations.